Transforming the customer relationship

What electric utilities must do to survive the 21st century

Published In: Intelligent Utility Magazine July / August 2012

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INVESTOR-OWNED AND CONSUMER-OWNED ELECTRIC utilities need to address a new challenge in the next decade or they may become mediocre, obsolete, servant infrastructure to businesses who will take their customers away from them. The transformation of the electric customer is a new phenomenon and electric utility boards of directors and executive management cannot wait to respond, but must proactively meet this challenge head on.

Changing the customer relationship and behavior
The next big challenge for electric utilities is to change their relationship with their customers and change customer behavior, so electric utilities can keep their customers and their business. This is about survival, not new lines of business. It is about changing electric customers from passive "So what? The lights come on" consumers to actively engaged consumers who want to use energy wisely. Customer energy literacy, in a new customer paradigm, should be a top priority.

Electric customer communications need radical change and modernizing. To survive and flourish, electric utilities must become consumer coaches as well as power providers, and for some customers, they must become personal trainers, motivating customers to pick and to adhere to individualized energy plans and packages.

Electric utilities must become proactive communicators with their customers, developing multiple communication channels to interact with and serve electric consumers, by way of the Internet, the Web, texting, mobile devices, smart phones and Twitter (and even more communications channels to come).

Handheld devices are going to become the link to electric consumers for everything we do as utilities. Long gone will be the meter reader and customer service representative as we know them today. What used to be a poles, wires and power business is about to become an energy communications-customer relations industry.

Electric utilities don't want to come late to the game in crucial modern technologies like mobile, search, media and tablets. There has emerged in our society a seamless fusion of hardware, software, social networking, online shopping, data access and new forms of cyber-based social interaction. These new technologies have been embraced by all customers, in all generations, for seemingly every kind of transaction or interaction. Electric service is next in the queue for these technologies.

What is this new relationship?
Electric customers are about to be bombarded with Internet applications that promote home energy savings, and marketers will use that premise to capture other profitable services to consumers as well. Home energy audits, performance evaluations and energy usage monitoring will be combined with access to shopping for energy-saving devices, appliances and computers and data that also will be linked to lots of totally unrelated applications and things to buy over the Internet.

What will be lost is the old utility-customer relationship. Left unchecked or unchallenged, electric utilities won't have direct customers anymore; Internet, media and telecommunications companies will have the electric customer relationship as just one aspect of their relationship with the customer. The thousands of electric utilities operating today across America will be viewed as the old backbone, backwater infrastructure, like the roads, sewers and water pipes that are just there to be used up, and need to be fixed upon occasion. And electric utilities will have to be there to fix everything at their cost, so Internet companies and energy service marketers can make a profit on the relationship electric utilities used to have with their customers.

Not only do electric utilities have to act now and pre-empt the invasion of these marketers and Internet giants on their customer turf, they need to take on the things that these companies will offer, or find ways to partner with these marketers, to survive. And electric utilities will have to be proactive in Congress, state legislatures and regulatory agencies, showing federal and state officials that electric utilities can do all these things being promised, and do them better.

Changing customer behavior
The most successful and powerful way to permanently change behavior is to change social norms. When people find out that their neighbors are more successful than they are at anything, they want to know more, and want to meet or beat them. Peer pressure can be very effective. And for those couch potatoes who don't care what the neighbors do, they will probably need financial incentives to inspire significant energy consumption behavior.

 

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