Senior executives navigate the risks of failing to offer effective digital experiences to consumers

By Jon Sundberg, J.D. Power

For years, the utility sector has found itself in the rare position of providing necessary services to consumers with very little competition. As a result, many utility companies have placed minimal focus on developing mobile applications and digital transformation initiatives.

However, after putting an eventful 2020 behind us—a year that seemed to feature every type of disruption possible—the longstanding gap in digital offerings from utilities could prove to be increasingly problematic for utility executives. There is growing anecdotal evidence that consumers are holding executives increasingly responsible for interruptions in service caused by unexpected and sustained disruptions that are not effectively explained and communicated.

Utilities have a long tradition of viewing consumers as ratepayers who have very little choice over their providers and control over how much they pay for energy services. Customer engagement has not been a universal priority for the utilities sector. As a result, digital initiatives have not received a lot of financial resources or executive attention.

When communications with consumers do emerge as a priority, it is often in the context of a crisis. All too often, the effort to engage with consumers at this point ends poorly. Consumers end up unable to access critical information in a timely and convenient manner when these inevitable disruptions occur. Frustration and anger often follow.

The Justification Dilemma

Negative consequences from underfunding digital engagement strategies to mitigate displeased or outraged ratepayers are difficult to quantify. Consumers, after all, do not have many, if any, utility provider alternatives.

These days, however, consumers are unlikely to go gently into that good night. Ignored by their utility providers, consumers today have learned to broadcast their grievances online, voicing complaints that can capture the attention of the public—and even public officials—charged with utility industry oversight.

When this happens, the worst of the discomfort does not fall on average rank-and-file employees. The spotlight, if a mishandled disruption is harsh enough, is placed on the senior leadership team. From a risk mitigation standpoint, the biggest beneficiaries of effective community engagement and customer satisfaction turn out to be C-suite executives.

A Path Forward

Customers, in short, expect access to mobile applications and other digital resources. This is especially true during a crisis. For most large utilities meeting this need typically requires an investment in digital talent and technology that can deliver the full range of services customers expect — and that utilities want to provide. For smaller utilities — like energy cooperatives — the situation may be a little different. Many have found ways to leverage pre-built solutions that enable customers to sign up for:

  • Rapid push notifications
  • Alerts about impending disruptions
  • Mobile app-enabled renewal or service upgrades
  • Self-service options that take pressure off of contact centers and other labor-intensive operations

In these cases, utilities do not need to develop intricate in-house solutions. From a goodwill perspective, the return on investment from implementing solutions that are already on the market is very high.

Moreover, there is value to be harvested from mining customer data to make better decisions and develop new offerings. There is no shortage of data on ratepayers. Leveraging digital engagement to capture consumer behavior will provide key insight into developing new products and services. This has the potential to move notoriously tight budget margins in the right direction.

The energy landscape is shifting. As renewable energy and other cost-saving options become more widely available to ratepayers, utility providers must weigh the risks and rewards of evolving their own digital engagement.

About the Author

As Director in J.D. Power’s Digital Solutions Group, Jon manages a portfolio of digital research studies across a variety of industries, including automotive, insurance, utility, and financial services. With over 10 years of digital research experience, Jon is passionate about good digital experiences and keeping up with current digital trends. He spends much of his time translating study results into actionable insights for clients.

Along with his role at J.D. Power, Jon also teaches at local universities.

Jon earned an MBA in Management and Organizational Behavior from California Lutheran University and a Doctorate in Organizational Leadership from Pepperdine University. He enjoys spending time with his wife and two children.

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