Customer-centricity in a Regulated Utility Industry: Is It Time to go Beyond the Myth?
As I pulled my electric car into the driveway on this happy 4th of July, I felt the car sway and then jolt, something I blamed on the car’s yet to mature ‘software enabled’ handling. Within few minutes Twitter was abuzz with news of one of the biggest earthquake tremors in Southern California in the last two decades. From being occupied with my electric car, clean energy rebate program and ‘time of use’ billing plan, I began worrying about gas and water line damage, a possible electric outage and how social media might become crucial for very different reasons this independence day in the US.
It is interesting to note that when the last earthquake of a similar magnitude hit Southern California, there was neither technology (both with the customers and the utility companies) nor any ‘customer expectations’ from utilities. Technology has established a huge presence since. It came as a surprise, therefore, that despite the technological advancement in the past few years, the J.D. Power 2018 Utility Digital Experience Study found the industry to be among the lowest-performers when rated for digital customer experience . Until recently, this could have been explained away as consumers being captive ‘ratepayers’ who pay highly regulated tariffs, with utilities having zero incentive to sell more.
In 2019, ‘customer-centricity’ can no longer be an afterthought for utilities. It turns out that my regional utilities faced electric outages, gas leaks and fire incidents that required amongst other things –analyzing social media traffic from customers, adopting latest communication channels to minimize damage and a ‘customer aware’ assessment and response strategy.
Consumers are not about to let utilities get away with a poor experience. They are demanding choice, transparency, and flexibility and utilities are increasingly realizing that the benefits of consumer-centricity are mutual. For instance, California utility encourages consumers to shift towards cleaner energy by inspiring them to learn more about their favorite car model based on fuel efficiency, about the available incentives and the total cost of ownership for that particular make, model, by year.
It might be easier to influence an environmentally conscious millennial owner of an electric car, a solar roof or an energy-efficient appliance with proactive and engaging interactions. As these consumers become ‘prosumers’ by giving energy back to the grid, engaging with them can impact demand and fulfillment planning as well as energy grid infrastructure planning for utility providers. The consumer today doesn’t shy away from buying medical supplies, baby products, or food from an enterprise that started as a bookseller, because the customer experience is consistently seamless, convenient, and trustworthy. Here is how a utility company can become a trusted partner to its consumers and help manage energy and resources demands of the 21st century.
Customer data analytics can transform a utility into a Live Enterprise
The global utility industry is increasingly becoming smart – smart meters, smart grid, and sensors all over the infrastructure. Millions of data points, through the lens of analytics, have the potential to nudge out patterns, identify areas for innovation, and locate areas for improvement around customer and the energy grid. With these insights, a utility can transform into a ‘Live Enterprise’ that is constantly listening, learning, has a single customer view and can plan for the grid before demand or emergency arrives. At a higher level, data analytics can offer utilities unbiased pointers on what consumers want and where to allocate resources and investments.
Digital readiness enables the live utility to respond to the ever-evolving consumer
The utilities and their operational systems need to readily integrate with emerging services and service providers through a digital technology layer that is agile, fast and responsive. They also need to prepare to integrate with API based services and secure digital integration of the millions of operational sensors so that new services can be provided or routed through them.
Customer-centricity can become a key differentiator in a competitive retail environment
Consumers in the US are becoming conscious of the energy they consume and are gradually shifting towards renewables. The cost of wind and solar energy has also been dropping and community grids and community farms are burgeoning. As consumers become prosumers and disengage from utilities how can utilities manage revenues and keep growing? I think the answer lies in deeper customer-centricity and the creation of new business models based on cross-selling of services, and not just revenue streams safeguarded for decades by regulation.
Without doubt, a customer-centric approach is a departure from the traditional approach adopted by utilities. But with disruption everywhere, utilities need to adopt a broader perspective that enables them to navigate the future of energy, get closer to customers, understand what motivates them, keeps them buying, and stops them from switching to the competitor.