It is not a secret that energy utilities need to focus on strengthening customer relationships through brand and product efforts as brands like Tesla, Apple and Google are increasingly building consumer mindshare in the energy space. The good news is that utilities can reap dividends almost immediately by tapping into consumer demand for new energy technologies via a utility marketplace. Our energy industry research shows that utility marketplaces are the number one way utilities can improve their reputation and brand. In addition, marketplaces allow utilities to support demand-side management programs, improve customer experience and develop new revenue streams.
Customers nationwide feel they are getting less value from their utility. Perceptions of paying reasonable rates for the services received from a utility are at the lowest levels we have seen since the end of 2015, as tracked in the Utility Trusted Brand & Customer Engagement: Residential (UTBCE) study.
A Stunted Understanding of “Value”
Many utilities are increasing their attention on improving consumer value perceptions. While some utilities have long had “value” as a key performance indicator (KPI), others are now in the process of updating their customer experience KPIs and looking at including “value” in corporate scorecards. However, in utility-land, “value” often reads as “price” (or “rates”)—an interpretation that hamstrings utility efforts to drive value perceptions by leaving a very important part of the value equation off the table. Specifically, “value” is a combination of two things, what you pay (where utilities almost exclusively focus) and what you get.
At Market Strategies, we’ve recently seen an uptick in utilities wanting to better define and manage their brand. I recently sat down with Claire Maglione, New Jersey Natural Gas’ (NJNG) manager of customer experience, to discuss how they’ve approached their brand work and why it’s important even for a regulated utility like NJNG. Below is a lightly edited transcript of our conversation.
Why is brand important to a regulated utility like New Jersey Natural Gas?
Claire: Typically, a company uses a brand to differentiate itself from competitors. For most energy utility companies, that doesn’t necessarily hold true. In our service territory, customers can choose their natural gas supplier, so in that sense there is competition, but they cannot choose the company who delivers it. For NJNG, the importance of brand is a matter of being viewed as a trusted source: to safely and reliably provide natural gas to homes and businesses, enable customers to easily conduct business, educate customers on energy-efficiency, make products and services both affordable and available and be a good community partner.
I recently sat down Don Hodson, head of customer experience (CX) at Georgia Power (GPC), to discuss how GPC is maximizing the effectiveness of its CX program. For energy brands that are working hard to create a positive, seamless experience for its customers, Don’s insight might just spark an idea that can be applied to your company’s strategy. Enjoy!
Can you explain GPC’s customer experience goals and the specific issues you’re trying to solve with research insight?
Don: Georgia Power has a strong reputation with our customers already so there is little value focusing on improving a customer sat score from 8.5 to 8.6. Rather, we look at all the interactions customers have with GPC—the channels they use, the issues they have—to identify where there are barriers to resolution or where we force them to make extra effort. Then we focus on how to mitigate those issues to reduce customer effort. Not only does this improve customer sat but, in many cases, it also identifies opportunities to decrease operational costs.
Solar roadways have captured the public’s imagination – see, for example, the viral “Solar FREAKIN’ Roadways” video produced by Solar Roadways and viewed more than 22 million times. And we certainly do use a lot of land for roads and parking lots – 61,000 square miles by some estimates. So why not use this space to also produce power?
Hockey legend Wayne Gretzky once attributed his uncanny ability to read plays to, “I skate to where the puck is going to be.” That concept applies to utility chief customer officers and CX professionals; those who are tuned into consumer expectation trends understand where their “puck” is going to be.
Cogent Reports’ Utility Trusted Brand & Customer Engagement (UTBCE) study is designed to understand customer engagement from a holistic perspective encompassing brand trust, product experience and operational satisfaction, but this blog post offers a simpler framework for customer experience. First up is marketing, which allows you to tell your customers what they can expect of you as a utility. Second, and just as important, is the actual experience customers have interacting with you—and where they judge whether your marketing was truthful or just blowing smoke.
We recently released our 2016 Utility Customer Champions, which awards gas, electric and combination utilities nationwide that have the highest scores on our proprietary Engaged Customer Relationship index. Among this list are 26 utilities that have “three-peated,” meaning they’ve been designated as a Customer Champion every year since we started these awards in 2014.
Here’s what sets these utilities apart, and what your utility can do to get on the path of enduring customer engagement:
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.
Utilities are increasingly turning to value-added products and services to increase customer engagement and reduce their cost to serve, but unmanaged business accounts –commercial customers without a key account representative–are a third less likely to adopt these voluntary programs. This is one of the reasons unmanaged accounts score 25 points lower than key accounts on Cogent Reports’ 1,000-point Engaged Customer Relationship Index.
Utilities have a good sense of how to engage key accounts because they have a personal relationship with them but often don’t know how to engage unmanaged accounts, which constitute a third of utility revenues nationwide. Our research shows that there are five clear segments offering distinct engagement pathways for unmanaged businesses. These segments are:
Insights Powered by Cogent Reports™
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.