The Internet of Things (IoT) is catapulting the energy industry into a new era of products and services, and the demands and expectations of utilities are rapidly changing. According to the IDC, energy utilities are currently the third largest investor in IoT ($66 billion) and this will alter how these companies interact with their customers. As an 80’s kid, I am reminded of a memorable song by Stereo MCs entitled Connected. The song’s chorus goes:
If you make sure you’re connected,
The writing’s on the wall,
But if your mind’s neglected,
Stumble you might fall…
More than ever, our connections with people, places and things drive and define who we are and what we do. These connections are directly impacted by the IoT explosion across our society. Back in 2008, more “things” were already connected to the internet than there were people in the world, and the momentum of this trend has multiplied over the past 10 years.
Does the average person shop for energy products through their utility? We know that customer preferences for shopping, particularly for Millennials and Gen Xers, is shifting toward online or mobile phone and away from traditional “brick and mortar” stores—51% of Americans think shopping online is the best way to shop (source: Big Commerce). But, how does that translate for utilities? Consumers embrace new products, adapt to new services more quickly and spend significant time researching and comparing online shopping options prior to making purchases. Product reviews and word-of-mouth opinions carry more weight than ever, and visual representations including product displays are expected to “come alive” during the purchase process. Such changing consumer behavior requires that traditional marketing tactics evolve to meet these shifting consumer demands, and utilities are not the exception. Continue reading
‘Tis the season when your loved ones ask what you need (or, in my case, your kids proclaim what they want)! In the spirit of gift-giving, we penned a letter to Energy Santa with our “wish list” of energy-related products and services. The ideas are based on results from our 2016 Utility Trusted Brand & Customer Engagement™ study, and although they apply to energy consumers in general, we’re focusing on the group nearly every company hopes Santa will deliver—Millennials.
It’s going to be hard to “wow” next gen energy users. They are more socially conscious and not nearly as loyal or trusting as their parents and grandparents when it comes to products, services and brands. And more than ever before, the technology people use and the content they engage with really defines them as individuals and members of a larger social community. The platform for the future of the electricity industry is taking shape now, and it’s squarely focused on how utilities adapt, evolve and transform to meet the expectations placed on their doorstep by Millennials and even Generation Z. Is your brand ready?
Over the past several years, Market Strategies has been consulting with many of our energy utility clients to help them gain a deeper understanding of their customers’ changing expectations. To be viewed as a “utility of the future,” customer relationships must evolve from simply providing reliable service to offering new product/service offerings—such as community and rooftop solar, electric vehicle charging stations, home automation and back-up power. But it also means enhanced customer service and related capabilities like improved automated self-service systems and interactive communications to meet the growing demand for multi-channel and mobile communications.
This innovation explosion has resulted in countless stories of mass interest, from the release of the Nest thermostat to consumer demand for Tesla’s electric cars to the UK-based company that figured out how to generate power from cheese by-products (here’s hoping it’s not limburger cheese). I recently read a news story about some specific activities that utilities are undertaking to leverage the demand for new technologies that also enhance their brand presence in the marketplace, and I wanted to share them with you.
This week we celebrate St. Patrick’s Day. While not technically a holiday, here in the Midwest, it’s not only a celebration of Irish culture but also a milestone that winter is on its way out (hopefully). People will take to the streets in a sea of green to celebrate with parades, dancing and traditional Irish cuisine (does a Shamrock Shake count?). If you did not already know, wearing green is an American-born tradition that is supposed to ward off being pinched by leprechauns. But, if one gets close enough to you so you can capture it, legend has it that the leprechaun must use its magical powers to grant you three wishes–maybe even revealing its hidden pot of gold at the end of a rainbow.
As research consultants, we always strive to deliver a pot of gold to our clients in the form of valuable research, insight and consulting that leads to a better customer experience or a new and improved product that will increase engagement and brand trust. However, the only way to accomplish this is to be ever mindful that if we take our eye off the leprechaun, it could change from being good luck to becoming sneaky and confusing, making us lose sight of our objectives and pointing us away from the pot of gold.
I hate to admit it, but with all the web-based services and on-demand viewing, I have become enamored with binge-watching. I recently binged on an HBO series called True Detective (I highly recommend it–it’s some groundbreaking stuff). One of the primary characters, Rust, seems to have a form of ESP when it comes to things he sees and how he interprets them within the context of each other. His dedication to looking deeper with a true sense of conviction works for a greater good in resolving issues and questions. As I watched for the entertainment of it all, it made me think about how we often gloss over the deeper meaning of issues we encounter on a daily basis.
From a market research and business perspective, some see a line of numbers tracking customer satisfaction with a company, recall of an advertising campaign, transcripts from an online focus group or an impact on a key driver model. But a researcher needs to embrace Rust’s mindset, combining information we gather with knowledge of our client’s industry and the world we live in to develop a “case file” that informs a confident business decision or pushes back on a commonly-held belief. While I doubt we will ever gain ESP per se, we can tune in more closely to understand what we encounter and what it means from a bigger, more global view.
How Utilities Must Prepare for the Customer of Tomorrow
Energy utility stakeholders may not consider their company to be a “brand” in the same manner as traditional consumer goods and service companies, but that landscape is changing. Increasingly, utility customers are comparing their energy-related services to other goods and services they use.
With sweeping advances in technology combined with the 40 million+ installed smart meters, there is a recognition that services provided by utilities should be ‘at par’ with service leaders in other industries. While still mostly monopolistic, only utilities that are well positioned in the consumer mind will be able to take advantage of revenue opportunities afforded by technology. And, at its core, a trusted brand scores higher on CX measures and is better positioned to go confidently into rate cases and retrofitting or building new plants.
As a consequence, utilities must now consider brand trust and customer engagement as additional table stakes. The American Marketing Association Dictionary cites numerous interpretations of the term “brand” including:
- The “name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers”
- The “sum total of how someone perceives a particular organization”
As utilities prepare for the energy customer of tomorrow, utilities’ brand definition will need to more clearly focus on shaping the perceptions of their companies.
Market Strategies International has conducted research on a lot of energy topics, including how utilities use social media (see Utility Social Media Index). I recently read a really interesting article along these same lines that states utilities’ use of social media is expanding. According to the article, of the 50 largest utilities, 49 have active Twitter accounts, all have Facebook accounts and 15 have mobile apps. It’s certainly encouraging to see this trend since it has the potential to increase customer engagement, especially among the tech savvy. As we have identified through our own E2 research, increased customer engagement has a direct correlation to higher customer satisfaction and brand favorability
But what really strikes me is that only a small percentage of customers overall are actually engaging with their utility’s social media channel. Specifically, the study cited in the article found that “for social media, on average utilities had over 11,000 Twitter followers (or just 0.8% of customers).”