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By Jesse Hitchcock
Today’s customers are highly connected, well-informed and demanding. Retailers and banks have adapted to the challenges of serving modern customers by providing cross-platform, digital experiences, which have in turn allowed them to grow their services and foster stronger relationships with their customers. Other industries, such as hospitality and personal transportation, are being forced to quickly adapt or be left behind by disruptive organizations such as AirBnB and Uber.
Software is the fastest growing spend for the Retail Industry. Source: Gartner
The utility industry has generally lagged behind the customer-focused innovation curve - relying instead on proven communication methods and a lack of competition to keep their customers satisfied. As of now, customers trust their energy providers, but utilities are missing out on opportunities to deepen their relationship with customers and expand their service offerings. This article discusses how utilities can use technology strategically to better serve modern customers before disruptive innovation fundamentally changes the role utilities play in customers’ lives.
Advanced technologies are driving significant change and creating disruptive innovation in almost every sector.
Source: Accenture Research Disruptability Index 2.0
In order to navigate this disruption -- and be positioned to benefit from it -- businesses can cultivate preparedness in four main ways:
1) Awareness and understanding of the changing technologies that have the potential to disrupt their space
2) Encouraging a resilient, innovative organizational culture
3) Exploring organizational agility by embracing new ways of working and making decisions
4) Acquiring and deploying the best people, technology and financial resources to remain competitive[1].
Deloitte completed a cross-sectoral analysis and found that 35% of companies are wholly unprepared for this disruption, and are struggling in all four areas of preparedness1. Not only is preparing for disruptive technology essential for companies to future-proof themselves, but investing in these organizational changes can also improve how a company operates today1.
Facing disruption is not a new phenomena. Several large companies have already faced disruptive technology and either flourished or floundered as a result. Companies such as Kodak, Nokia, Maritime Tel & Tel, for example, all succumbed to innovative disruption despite being dominant leaders in their respective markets.
The energy sector is not immune to disruptive innovation, and utilities are now faced with choices that will dictate whether they flourish or flounder.
The cross-platform, digital experience that is now commonplace with retailers and banks has produced a marked shift in consumer behaviour. Today’s customers are highly connected, well-informed and demanding. They’ve grown accustomed to easily accessing information and resources at their convenience, and this expectation is now being placed on their relationship with energy providers4.
In addition to satisfying evolving consumer demands, Government regulations and policy are requiring utilities to move toward greener, more efficient and flexible energy markets. Consumers are also becoming interested in taking advantage of innovative solutions such as Distributed Energy Resources, and they want guidance from their energy provider to navigate these transitions5.
Consumers believe that energy companies are the most trustworthy source of information about their energy use4. They rank their trust in utilities on this topic above governments and governmental organizations, environmental associations and academia4. This trust can be an immensely valuable asset, but building these relationships is challenging for utilities. Customer engagement may be a conceptual priority, but the execution has been lackluster. On average, consumers interact with their energy providers only four times a year, and almost a third of consumers only engage one or twice each year4.
Using data to better understand customers will create new opportunities for utilities to reach out and connect with them. By building these relationships and focusing on more than just outages and bill inquiries, utilities will set the stage to convey strategic messages and communicate new service offerings to their customer base4. These new offerings will be essential as the industry experiences rising energy costs often paired with reduced consumption4.
Starting with a base of trust and integrity is helpful, but utilities now have to ensure that they are providing services that resonate with the consumer. 82% of consumers would buy additional products and services from their utilities if those services were personalized to their needs and preferences7. This is why innovative technology is critical. Demographics, location, energy consumption, preferred communication channels can all be used to uncover customer segments, and allow energy companies to refine their programs accordingly7.
Data-driven technology enables utilities to start building these profiles and establishing relationships instantaneously, instead of relying on customers to engage on an opt-in basis. Not only do utilities provide something that consumers need -- safe and reliable energy -- technology is now giving them the opportunity to deliver something that consumers want. By fostering a deep understanding of the customer-base and their motivations, utilities can raise the bar and deliver exactly what is timely and relevant. The status-quo is no longer sufficient -- utilities who do not capitalize on these opportunities stand to lose both customer support and future profits. In contrast, utilities who prepare for and embrace disruptive innovation will undoubtedly reap the benefits of this new energy transition.
