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In competitive markets, brand strength has long been associated with positive business outcomes, including growing revenue through increased market share, elevated pricing power and higher customer loyalty. While market share and customer loyalty haven’t historically been things utilities think about, they are taking on a new strategic importance as the tectonic plates underpinning the 21st century energy market continue to shift.
Utilities are beginning to manage their brands to support the new market challenges they face—from implementing new rate structures to figuring out how to sustain financial growth. Successfully navigating these challenges requires strong brands with enough emotional leverage to persuade consumers to come along on the journey to a new energy future.
Our Utility Trusted Brand & Customer Engagement study, now in its sixth year, focuses on the impact of brand on customer engagement for the utility industry, making Market Strategies-Morpace the undisputed leader in brand insights for utilities. Through this research, we’ve identified three elements of brand value for utilities:
- Enhanced pricing power via customer support for higher rates.
- Revenue growth by capturing market share for new product offerings not protected by the utility’s monopoly position.
- Lower risk of customer and load defection as customers consider distributed energy resources and dis-intermediators.
Every impression counts when promoting and maintaining a successful business, and managing your brand identity is a major factor in that success. Whether it’s your logo, your website or your business cards, your customers build an impression of your company through every interaction they have with it. Each touchpoint adds up to create your brand image. But in today’s dynamic digital market, customers have more ways than ever to engage with brands.
New and evolving technologies demand that businesses account for the myriad of platforms that can promote as well as demote their brand. Brand research across a diverse range of markets has shown that your customers’ opinions, needs and expectations can turn on a dime, particularly in the court of social media. As a result, the challenge for businesses is to navigate these platforms to ensure they don’t get lost in the crowd, or worse, stand out for all of the wrong reasons.
What Is Brand Identity and Brand Image?
Brand identity is the way a business defines itself to their target audience. Every element that helps define your brand, from name and logo to color scheme and even the language you use to communicate with your audience come together to create your overall brand identity.
On the other hand, your brand image is the perception that customers have of your brand. It is the aggregate of every experience, interaction and association that people have with your organization. Continue reading
With digital transformation occurring at breakneck pace, it is time to shift gears. Our wish list revolves around reinvigorating your brand and your approach to customer experience so that more people can “believe” in you again.
You may be asking; why wouldn’t we just add some shiny new toys to engage customers? Isn’t that what we asked for last year? While shiny new toys have their place in this strategy, we are inundated with new gadgets and technologies and the immediate data and information they offer, though the ongoing relationship and experiences we have with you are not changing as much to keep up with the trend. We know you are making strides to introduce new interaction and communication technologies to improve our relationship, though our experience appears to be stuck in neutral.
We communicate with each other only a handful of times each year and you do not always provide us with what we desire. Since we have a strong desire to freshen and update our relationship with you—and, in turn, improve the relationship our customers have with the energy industry—it is time you start considering a new approach. Continue reading
As utilities face increasing deregulation and competition from distributed generation, they need to refocus their key performance indicators (KPIs) on metrics that describe customer actions and sentiment rather than on the somewhat passive metric of operational satisfaction.
Recently, utility executives have been asking us to help them develop or evolve their KPIs to include Customer Effort, Customer Advocacy, Net Promoter Score® (NPS) and Ease of Doing Business. Given that the industry is primarily monopolistic, this presents some unique challenges in identifying KPIs that provide effective and useful metrics for utilities today. Continue reading
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This article is not about building the fundamentals for strong customer engagement: operational excellence, a strong brand and value-added product offerings. Instead, it’s about the moments that catch customers off guard—in a good way—and how utilities can intentionally create those moments in their customer interactions. These moments help support a solid customer experience strategy, and more importantly, help create advocates, as customers share with friends and family, “you won’t believe what my utility company did!”
1. Invite new customers into a relationship
My colleague Chris Oberle, senior vice president of the Energy Research and Consulting group at Market Strategies International, has written about the missed opportunity for customer onboarding. Two years later, only 8% of customers new to their utility recall receiving any sort of welcome or onboarding material. Continue reading
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“And when you speak of me, speak well.”
As utilities seek to evolve their customer management performance goals beyond traditional customer satisfaction metrics, utilities are evaluating updated measures and management approaches that better reflect success in the transforming utility market—one of those is the Net Promoter Score, or NPS. The NPS metric is based on a question regarding the likelihood of a customer to recommend the company to others. The scale is 0–10 and based on the percentage of those posting a rating of 9–10 (Promoters) minus the percentage of those rating 0–6 (Detractors), and then multiplying the result by 100. The Utility Trusted Brand & Customer Engagement™: Residential (UTBCE) study has the most robust database to help utilities measure, benchmark and manage NPS. The study has been tracking NPS quarterly since 2016 and provides data-based analysis, modeling and insights to help utilities perform well on this metric.
The Core of the NPS Debate
For both the utility and the customer, there is confusion regarding why a customer would be compelled to “recommend” their regulated utility. If they want utility service, they use the utility. How can a monopoly motivate customers to recommend it? And, what is the value to the utility?
New products and technologies are changing how customers interact with their energy provider and have opened up opportunities to offer additional products and services designed to drive engagement, trust and revenue. The utility of the future will need to engage with customers through value-added products and services that go beyond simply providing reliable service, but how do utilities pivot from operating as a regulated monopoly to becoming innovative and inspired product marketers in a competitive landscape?
The good news for utilities is that they have abundant resources and capital to support new-product development. The challenge, however, is that they are accustomed to putting those resources to use within a very structured, regulated environment that is not well-suited to the free-thinking and “willingness to fail” ethos often required to successfully generate ideas and turn those ideas into new products and services. Simply put, innovation as well as product or service development requires a culture and skill set that many utilities lack.
Utilities should keep in mind three principles as they work to evolve into innovators and product marketers.
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.
“What is the use of a house if you haven’t got a tolerable planet to put it on?”
Henry David Thoreau
This month we are celebrating Earth Day with our annual designation of Environmental Champions for those utilities whose customers say their utility has exhibited dedication to the environment in our Utility Trusted Brand & Customer Engagement study. What struck me most about this year’s findings is that customers think environmental improvements are a better investment and are not opposed to a utility rate increases related to such endeavors, at least more so than for improvements in reliability or service.