The recent massive ransomware attack struck industries across the globe and exposed worrisome weaknesses in the computer defenses of even the most sophisticated international corporations. While there are no reports to date of utilities being struck by the WannaCry virus, consumers’ confidence in the ability of any organization to keep its system safe has been badly shaken.
Cybersecurity has long been on utility officials’ mind: The sniper attack at an electric substation and a holiday cyber-attack scare on an electric utility are a couple of events that keep cybersecurity on the forefront. So, the WannaCry incident serves not so much as a wake-up call as it is a confirmation of the urgency of guarding against cyber threats. But it’s also an opportunity to communicate with customers about what you are doing to protect against and prepare for such an attack. Continue reading →
As a consequence of waning trust in the financial services industry, affluent investors appear to be retrenching, consolidating their investment accounts and concentrating more of their assets with a single distributor firm. While this is positive for primary distributors, it’s imperative that they increase customer loyalty of affluent investors to retain these new assets.
According to Investor Brandscape, investors report an average of 2.03 distributor relationships this year, down from 2.31 in 2015. Concurrently, the average percentage of assets that investors direct to their primary distributor, the firm with which an investor holds the largest proportion of his or her portfolio, has significantly increased to 81% from 70% in 2015.
Interestingly, the trend toward asset consolidation is driven by Millennials, Gen Xers and 2nd Wave Boomers, as these investors report holding a larger proportion of their portfolios with their primary distributor this year. Yet there is an inverse relationship between number of distributor relationships and age. Boomer and Silent Generation investors generally have fewer distributor relationships compared with Millennial and Gen X investors. Continue reading →
Want to create more opportunities for women in energy? “Will and determination is all you need,” says Bjarni Bjarnason, CEO of Reykjavik Energy.
Ernst & Young’s 2016 “Women in Power and Utilities Index” reveals that women constitute only 23% of North American utility non-executive directors and 21% of senior management. While this leads the world (Europe comes in second at 23% and 12%, respectively), it is still nowhere near the 51% proportion of women in the overall population. Ernst & Young’s report also highlights why gender diversity is more than a moral imperative – they found that the 20 most gender-diverse utilities outperformed the bottom 20 by 1.07% in return on equity.
The utility industry has made significant strides in reducing its environmental impact. According to the Edison Electric Institute, in 2015 utility CO2 emissions were 21% below 2005 levels, driven largely by a switch to natural gas from coal and increasing deployment of renewable resources such as wind and solar. Additionally, utility energy-efficiency (EE) programs nationwide save enough electricity to power nearly 12 million homes each year.
Despite this tremendous progress in environmental stewardship, customers do not perceive their utilities as environmental stewards. As we discovered in our 2016 Environmental Champions awards, customer perception of environmental dedication greatly lags other brand trust factors. Continue reading →
Recent media coverage surrounding the Department of Labor’s fiduciary rule and the market upheaval following the Brexit vote prompted us to consider just how many US consumers trust their current financial services providers. How many of us trust the promises being made by the same firms we pay to help manage our investment accounts, protect our savings or insure our cars and homes? We were surprised to discover in our recent survey that 31 percent of American households feel obliged to do business with at least one financial services company they distrust. Such a marketplace is highly attractive to disruptors and therefore represents a very significant risk to traditional companies relying on high renewal rates to sustain profitability.
Market Strategies’ national omnibus study explored trust in a variety of financial services product categories, including banking, credit cards, home mortgage, investment services, auto, home and life insurance. Additionally, trust levels among consumers for numerous services outside of the financial category (healthcare, electric utility, religious institutions, courts, police, federal government, neighbors and strangers) were also included in the study to provide a broad perspective on trust among American households in companies, individuals and institutions they deal with every day.
I recently sat down with Dr. Fridrik Larsen, chairman of Charge, the world’s first energy branding conference being held in Iceland this September, to discuss how energy companies can increase their brand equity, transforming from a utility to an energy brand. Both Fridrik and I will present at Charge. Register now or learn more.
When you think about utility brands globally, what stands out to you as particularly effective? What’s ineffective?
Fridrik: In the competitive energy market, the traditional utility is dead. The utilities in those markets are no longer hooking the customer up to a service that the consumer needs. A consumer no longer needs the utility for electricity—a utility needs the consumer to stay in business. The most effective and most ineffective initiatives revolve around the smart buzz. The effective ones know how to bundle the possibilities of smart technology with their brand and their message and are able to frame it in an engaging way. The ineffective ones think that it is enough to be smart without really exploring the possibilities; they don’t know the customer or how the customer might find it beneficial.
Following several years of improving impressions, this year mutual fund brand favorability ratings have plateaued. In fact, relatively few firms see changes in their scores, with the exception of two firms that suffered high-profile portfolio manager turnover, and the handful of providers that were well-positioned to benefit at the firms’ expense.
Following this turbulent period, there has been a significant shake-up in the branding elements that drive consideration. Trust is now the most important attribute for mutual fund managers to convey, followed by providing information that guides advisors’ investment decisions. Continue reading →
As utilities continue to pursue stronger customer relationships, they tend to focus on one-size-fits-all operational improvements. Who would not want mobile access or an app, energy efficiency rebates, proactive outage alerts, electronic bills or online energy management tools? The answer is White households, which have lower demand for these offerings. In fact, all of those product offerings have high demand overall, but if utilities want to find the “low-hanging fruit” for adoption, they will be more successful if they target non-White customers. Specifically, Hispanic households have the highest demand and stated usage for each of these products.
This is just one interesting insight from our latest Cogent Energy Reports study, Residential Utility Trusted Brand & Customer Engagement, which explored the benefits of visualizing the customers you serve. Gaining a deeper understanding of your customer base through formal segmentation or visualizing them based upon what you know about them makes your customer management efforts more efficient. Recently published Opower research suggests that utilities spend $5.3 billion annually on customer service. Still, most utilities use the same platforms for every service interaction, paying little attention to customized service approaches by segment.
Massive data breaks involving financial and personally identifying information are becoming commonplace, a frightening trend that is earning increased attention from consumers. Given the heightened media scrutiny and corresponding consumer angst: Which organizations do consumers now trust with their data? What do all of these data breaches mean for the health of your brand? We help answer these questions, drawing from our recently-completed study on consumer security perceptions.
Recently at CS Week, Lynn Good, CEO of Duke Energy, delivered the keynote speech based on a simple new reality of the energy industry: Utilities must reinvent themselves as value-added companies that do more than answer the phone and respond to outages or safety events—they must become brands that mean something to individuals.
“We provide our customers an extraordinarily vital service…and the delivery of that service is undergoing dramatic change,” explained Good. “If we don’t transform, then I believe we’ll be left behind as an industry.”