Why Utilities Must Enhance Customer Engagement

Posted by Danny Kalish on Jan 5, 2016 10:42:23 AM

Everyone knows that the electric utility market is going through a paradigm shift, but how many have really thought about how this should change the way utilities interact with their customers?

People typically focus on technology as the key driver for a paradigm shift, however, it is the change in the consumer behavior that makes the difference. Utilities are investing billions of dollars to modernize the grid infrastructure and deploy smart meters in order to reduce gas emissions, integrate renewable energy sources, improve grid reliability and reduce operating costs, but not many utilities, at least not until now, have made the necessary investment in impacting customer behavior that would ultimately help achieve the desired benefits of the Smart Grid. Let me give you an example. Smart Meters and the new TOU (Time Of Use) pricing models provides utilities, theoretically, the ability to reduce power consumption during peak demand periods, which will save them money, prevent outages and most important, will avoid the need to build new power plants that have a negative impact on the environment. In a perfect world, consumers will reduce their energy consumption when rates and generation costs are high, and use them when surplus power is available. However, to make this perfect world a reality, utilities have to engage with their customers, educate and guide them to become smart consumers. This requires an improved customer engagement model. This can be achieved by personalized video, as described shortly.

Utilities need to explain to each and every consumer, how changing his or her consumption habits can significantly reduce their electricity bill and at the same time help save the planet from global warming.

The challenge is that every vendor or service operator wants to engage with its customers and the competition on the consumer's attention is very high. You must approach your customer in an outstanding way if you want him to notice you. Seth Godin in his TED talk 'How to get your ideas to spread' describes the difficulty of spreading new ideas and what is required to be successful. In a nut shell, he argues that in order to make an impact on consumers behavior, you have to engage with the customers in a remarkable manner, because this is the only way people are going to notice it, talk about it and spread the message to other people. 'Remarkable', according to Seth, means 'neat', but it also means worth making a remark about, like in the case of this compelling personalized video.

Approaching utility customers in a remarkable manner

Video is the most effective communication medium available to us today and in order to make it remarkable, it should be personalized, short and beneficial with outstanding animation.

The benefit of personalized video for electric utilities

The Smart Grid introduces an opportunity for utilities to maximize their revenue, as they balance between generation capacity and consumer demand, minimizing peak consumption that requires high cost fuels and god forbid, outages, that may cause penalties. Impacting consumer behavior to align with utility priorities is key. Utilities that used personalized video achieved over 70% click-to-open rate.

As the utility market is becoming more competitive, utilities want to establish their brand and increase their market share in order to increase revenue. Utilities that used personalized video, achieved NPS increase of 24 points and 79% of recipients improved brand perception.

The risk for not investing enough in customer engagement

If utilities do not invest in establishing a dialog with their customers they may face pushback from their customers to the Smart Meter which will (1) not allow them to fully recognize the investment in Smart Meters (2) increase the cost of installing the Smart Meters, and (3) will have to endure high operation costs by not being able to influence their customers to shift electricity usage to off-peak hours.

But this is just the start of it. Look at what has happened to the Telco industry that missed the internet revolution and became just dumb pipes and a communication infrastructure for OTT (Over The Top) applications like Google, Facebook and What's up. The Energy revolution is about to pick-up and bring a host of energy related applications that will dominate this market. If utilities do not engage with their customers and position themselves as an innovative market leaders, they will not be able to take a role in this evolving market, just like the mobile operators lost the OTT market and are now trying, unsuccessfully, to take a chunk of it.

Learn how PPL, the leading Utility company, transformed its customer experience through personalized videos.
PPL Case Study

Danny Kalish

Danny is CTO & Co-Founder at Idomoo. Danny is a serial entrepreneur and a man of vision. He has a strong track record in a number of successful startups, delivering value to its investors and clients.

Topics: Blogs, customer engagement, Customer Experience, Utility Customer Engagement

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