Utility Executives Must Change Their Customer Service Approach
Photo courtesy of Emmanuel Huybrechts
We are in a new age of customer service where customers need more control over their utility usage. More than ever, consumers are seeking added value, personal connection and products and services that align with their lifestyles—all of which go beyond the traditional energy experience.
In order to contemplate the future, one needs to understand the converging trends that will shape the future. There are eight primary trends:
1.Technology. Investment in new technologies will grow slowly because of utility legacy issues, costs, and lack of product standardization or flexibility.
2. Regulation and Public Policy. The regulatory and legislative arena will be dominated by the impact of EPAct 2005 and the expected increase in new rate cases.
3. Customer Expectations. Changing customer expectations will be highly correlated with shifting demographics, exposure to service innovations in other industries, and concerns over higher energy prices, increasing expectations in regards to digital customer interfaces, greater choice of service offerings and new tools.
4. Financial. The utility financial environment will be under increasing pressure as interest rates rise, regulated return rates decline and fuel prices increase.
5. Fuel and Energy Prices. Escalating fuel prices, the termination of rate caps in some regions and the replacement of aging infrastructure will continue to drive up rates.
6. Load and Economic Growth. The rate of increase in load will decline, but high-growth pockets will exist in warmer regions of the country, reflecting demographic shifts.
7. Demographics. Changing population demographics will impact utility workforce composition and customer base, as well as customer service expectations.
8. Aging Infrastructure. Aging infrastructure will contribute to increased replacement costs and strain transmission and distribution systems.
Within these trends comes a serious need for customer engagement. Engaging consumers and understanding the drivers of loyalty and satisfaction are critical to ongoing success. As you will see in the study below, satisfaction and engagement decrease based on the length of time consumers interact with their providers.
In general, electricity and energy providers are not necessarily top of mind for consumers; however, many trends in the marketplace today—smart metering, value-added products and services, and energy conservation—require greater levels of consumer interaction. Based on a study by Accenture, respondents spent, on average, 9 minutes interacting with a representative of their electricity provider over the past 12 months. Highlighting the low level of interaction, 54 percent stated that they have not interacted with their electricity provider in the past 12 months
The Accenture study further concluded that the more time consumers spent interacting with representatives of their electricity provider over the past 12 months, the more their levels of satisfaction and engagement seem to decrease. If consumers have interacted with their energy provider for more than one hour in the past year, satisfaction drops by 7 percent compared to those who have not interacted at all. The drop in engagement over the same range is even more dramatic—falling a full 10 percent.
You may wonder, how can my utility company interact with customers without reducing satisfaction? One of the answers is social media.
With the increased popularity of social media, the time is now to engage with customers. Consumers in many geographies are interested in engaging with their electricity providers through social media, in particular, for service convenience. It is also worth noting that utility companies should target young consumers. Younger consumers can offer a paradox: they prefer a complex mix of high-touch interactions, self-service and social media engagement.