It’s time to get reacquainted with customers

by Teresa Hansen

Customer engagement can be added to the increasing list of buzzwords that come and go through the electric utility industry. Its addition to the list is legitimate. Customers are much more important to electric utilities than they used to be. Not since the introduction of electricity and then the introduction of the “all-electric home” in the late 1950s have utilities been as attentive to customers as they are now.

From the 1960s until recently, a steady stream of new electric gadgets, a swelling population and a growing economy created an environment in which electric utilities could focus on providing ample, reliable electricity to their residential customers, commonly called ratepayers. They didn’t worry much about customer engagement; they focused on providing reliable electricity to ratepayers in their service territories. That is still utilities’ basic business, but things have changed. Economic growth has slowed a lot, energy efficiency and sustainability have entered the spotlight and environmental regulations are making it difficult for some utilities to cost-effectively generate electricity. Many utilities’ margins are being squeezed, and they’re looking for new revenue sources, most of which focus on customers. Utilities have invested in technologies that allow them to create customer-centric services but many are struggling to figure out how to use the technology-generated information to develop something their customers want. They’re realizing they know little about their customers.

There was much customer engagement discussion in early May during the CS Week Conference in Tampa, Fla. I learned that a lot of utilities are at ground level when it comes to starting a dialogue and developing a basic relationship with customers. Utility customer demographics vary widely, and a one-size-fits-all approach to connecting with customers doesn’t work.

Julie Albright, managing director at the University of Southern California (USC) Energy Institute and research scientist at USC’s Information Sciences Institute, spoke at the CS Week Executive Summit. She said the digital revolution has created a digital divide in society. She talked about the differences between millennials–people younger than 29–who grew up with digital technology and will be the largest consumer group and work force segment in two years, and baby boomers–people born between 1946 and 1964–who are digital immigrants, as well as today’s largest consumer group and work force segment. This divide makes segmentation important when creating customer offerings. Utilities must engage customers through various communications channels, including social media, text message, email and even old-fashioned phone calls.

I also participated in a CS Week Exhibitor Showcase session. I presented results of a survey that Electric Light & Power and PennEnergy, PennWell’s research arm, conducted for Cognizant. Investor-owned utilities, rural electric cooperatives and municipalities participated in the survey, which centered on customer self-service. Ninety-seven percent of the respondents said self-service is key to customer satisfaction; however, only 76 percent said customer self-service is their No. 1 customer service priority. Although nearly half of utilities surveyed said social media and mobile apps are important to their customers, only 18 percent and 20 percent, respectively, offer these channels.

These statistics reinforce my observation that many utilities are struggling to make the customer connection they need to implement new business strategies. To help, the 2014 Electric Light & Power Executive Conference, which will be Jan. 27 and 28 in San Antonio, Texas, will focus on customer engagement. The conference theme is “Winning the Ratepayer-to-Consumer Revolution.” Among other things, the conference will feature a panel of investor-owned utility executives who will discuss what their companies have done to engage customers, why they chose their strategies and what is and isn’t working. Another panel of executives who work for companies outside the utility industry will discuss how their companies have adapted to changes and challenges created by the digital revolution, how they connect with customers and how they obtained high customer satisfaction ratings. Albright also will participate in this panel discussion.

The Electric Light & Power Executive Conference will be a forum for utility executives to learn what others inside and outside the industry have done to engage customers, ensure customer satisfaction and create new revenue. Visit www.elpconference.com for details and to register. Be sure to check back often for program updates. I hope to see you there.

Teresa Hansen, editor in chief

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