- October 11, 2017
The energy sector has been a laggard when it comes to customer service and the power of the customer. With a few large players, antiquated systems driving limited data and convoluted processes customers had little influence over the market. But all of this is changing. With new entrants in the industry, the tortuous emergence of Smart metering and increased political, regulatory and media focus power in the energy sector is shifting to the customer. They now have the choice and empowerment to shop around and switch to better or cheaper service providers and/or tariffs. Customer perceptions and decision are being informed by general social media trends but also energy sector specific factors such as Smart data, regulatory impacts and the green agenda.
Changing customer expectations
Modern customers have had the advantage of having easy access to information and have become used to advanced multi-channel customer service in other industry sectors. Additionally people expect the convenience that technology offers and seek to have it integrated into many aspects of daily life. Smart phones now enable smart homes where everything from light switches to alarm systems can be remotely activated via a smart device. Energy providers can and must match this convenience and flexibility to deliver an expected level of customer service and flexibility.
Customers also expect seamless management of their accounts by being able to access information of usage and tariffs as well being able to make payments at the touch of a button or through a voice command. They want to be able to manage their own accounts and if they are actively implementing demand management or energy efficiency measures, they want to be able to track the results and savings. Smart allows this; customers are increasingly aware of it; and suppliers must deliver it.
Loss of Supply
Customers rely heavily on the availability of energy and therefore expect consistency in supply. Ironically, for service providers the opportunity to really serve customers comes not when the services are operating efficiently, but rather when services fail. That is when there is an opportunity to secure customer loyalty. If a service provider can supply timely and accurate communications informing customers how and when supply will be restored customers are generally happy. It’s when there’s no energy supply and no communication that’s when customers feel they’ve been left in the lurch.
At a basic level consumer needs are simple – they expect a continuous, uninterrupted energy supply at a fair price. But the customer experience has become more complex because of the expectation to have access to information and clear and accurate communication. To meet these expectations service providers would do better to focus on communication rather than marketing as a channel to secure customer loyalty, particularly at times of customer stress
Increased competition and unusual business partners
New entrants into the energy market are claiming market share primarily because of their claims to customer focus. As the argument goes, they are using technology to their advantage they are winning over customers through their strong communication efforts and competitive product offerings. They have strong communications with customers and use technology to help facilitate this through apps and technology integration. How much of this is spin and how much rests on long term deliverable service improvement increments remains to be seen. But what is true is what they may lack in infrastructure they are making up for in innovation and agility, adapting to changing market conditions and preempting customer expectations.
Many innovative energy service providers are partnering with technology companies to the benefit of their customers. Tech companies can offer infrastructure and data channels which can help facilitate better customer service. In terms of marketing they can offer brand awareness and access to large numbers of customers. Integration with mobile apps can offer greater convenience to customers and partnering with technology companies that already have the infrastructure and capability to do this makes sense.
Additionally technology companies are investing heavily in the energy sector. Google, for example, has recently invested more than $1 billion in renewable energy. Currently 34% of their operations are powered by renewables. But more impressive is the technology being developed to make energy supply more efficient. Sensors are being installed on solar devices that send messages when there’s a fault or when a part needs to be restored. Really starting to industrialise the potential for IoT.
Many of these technology led initiatives are new and untested, many will fail, but some will succeed and may potentially revolutionise the market. All suppliers must be aware, watching and ready to lead or at the very least react to new developments.
How renewable energy is further affecting the power balance
When power utilities operated primarily on fossil fuels, customers were only consumers. But now with renewable energy, (Solar in particular) consumers are not only consumers but also producers, feeding power back into the grid when they generate an excess. In many European cities solar panels installed on the roofs of houses are suppling enough energy for local businesses in addition to their own household needs.
This too impacts the industry dynamic because now service providers need the customers as much as the customers need service providers. So if customers are becoming less reliant on service providers for their needs where does this leave energy utilities?
What should be the focus of customer service efforts?
In this context the best opportunities exist in creating positive and proactive conversations with customers by providing them with useful and relevant information. Energy companies must accept that customers now have the power, or at least some of the power, and the trend will continue. Treat them as such; provide them with the data available; and make their lives as easy as possible (yes, including switching if necessary) and much of the risk can be removed. This not only builds trust but also positive brand awareness.
Most importantly, service providers are more likely to win over customers if they continually focus on providing value through their communications. Energy efficiency and demand management programmes are two topics that can be used to start and reinforce customer engagement in a positive way. Technology partnerships can further improve the customer relationship by facilitating the flow of information to customers to consistently provide real value that is relevant to their needs.