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Customer 4.0: Developing technology-enabled services to keep customers happy

This article first appeared in Electric Light & Power

We interact with technology-enabled services through our phones and computers every day, from hailing rides, to pre-ordering groceries, to walking the dog. The success of companies like Amazon or Airbnb are providing a mounting body of evidence that engaging customers with new solutions to enhance their world leads to improved satisfaction, brand recognition, loyalty, and ultimately sales. But these companies didn’t start as supply chain or real estate giants – they took first steps to determine the appropriate applications of technology for their customers and evolved with their customers’ service needs. This article calls on utilities to develop a similar mindset and become leaders in the energy and technology evolution occurring today.

One of the cornerstones of the current utility customer experience is the perception of the ability to self-serve through the widespread use of clumsy solutions that service the service provider’s, and not the customer’s, needs. Tools such as automated phone voice response systems, mind-numbing FAQ pages, and impassable call centers have become so standard and clichéd that customers expect little more from their utilities. The experience is designed to be unidirectional, opaque, and satisfying to only the most basic or regulatory-mandated needs. It was the same way with taxis through the late 2000s – they were what they were and that’s what customers got, until they weren’t.

If you are reading our article series as a utility employee, you may be asking how your business stays relevant in a next generation energy world, one in which stagnant or declining load growth is the norm and customers are asking for services you don’t currently provide. Many of the utilities that participated in our 2017 Utility Customer Experience Insights StudyTM believe they are facing a changing business climate that is primed to move beyond the status quo. This evolution is driven by a new generation of customers interested in more than whether the lights come on. Today’s customers want to be able to choose between available options that align their energy’s source, delivery, and cost.

Changing customer profiles open the door to innovation

The changing customer profile has opened the door for nimble, innovative players looking to apply to energy the same mindset that has driven the new generation of innovators such as Uber and Netflix; that of a service and solutions provider. As countless disruptors across numerous industries have demonstrated, no longer are customers simply an “end-user” to be planned for and managed. Today’s customers demand to be enabled by technology that is customized based on their preference. As our Customer 4.0 vision stresses, the customer is at the center of their own universe, not yours.

As the aggregators of energy data with vision across their grids, utilities are best positioned to offer and improve upon services that enable energy customers – basically everyone. However, the average utility is not designed to be a new product and service innovation center, which often results in a reactive or defensive approach to this change. Customer solutions are developed through two-way interaction and by meeting the customers’ needs with the right information. As a simplified example, public transportation agencies may provide the location and capacity of city buses en route during morning rush hour, allowing riders to decide whether to wait for the bus or call an Uber. The question for the energy industry is not in whether to develop a product or service, but in determining what customers need the solution to do in order to achieve their goals.

Customers are drawn to new energy products and services because they provide both choice and control to the individual, in a way that hasn’t been available before. Fortunately, utilities have a suite of tools available to them, be they rate and tariff options, home energy management products, communities powered by solar farms, microgrids, DERs, and supply choice programs, not to mention an electrical supply system perfected over a century. The challenge is to apply these tools in ways that reach into the Customer 4.0 universe and are responsive to those evolving needs. Utilities should be encouraged to engage with customers to determine what solutions are desired and which will provide the greatest impact long term.

Additionally, it is OK to trust customers with their data. This is an especially timely topic given that we are in the midst of a national debate over social media and how data is used. Just like Likes and Follows, energy data are indicators of customer behavior and if organized properly and securely can be delivered back to the customer in insightful ways to help customers make their own decisions. When developing customer solutions, a utility must make customers aware of what data is available and show what can be done with it. The utility is then responsible for determining how these solutions fit within their existing business model, or how the business model must change through M&A, in-house capability development, and regulatory strategy. Implementing the programs demanded by customers enhances the utility’s value while placing the customer in the driver’s seat, at the center of their universe, right where they want to be.

The many nuances of this seismic shift in the utility business model can be difficult to conceptualize as a whole, but can be made entirely manageable by breaking out the core components of a process utilities can follow to develop their customers’ solutions:

  1. Determine which new products and services your customers are interested in that align with your business domain. These can be hardware or infrastructure-based such as solar/DER, EE, DSM, EVs, battery storage, or data-based such as energy management apps, or customer-facing energy analytics.
  2. Know and learn from other market participants, and determine how you want to play. Track successes and failures of competitors, collaborators, policy makers, and technology manufacturers to fill in the landscape.
  3. Operate within the existing regulatory environment and progress your utility’s business model.

Change requires new capabilities, technologies, or regulatory approvals, and it is critical to understand how these changes apply themselves across your organization to impact regulatory strategy, rate design, operations, asset management, customer engagement, and other utility functions. Utilities that embrace the development of technology-enabled services to keep customers happy will be best positioned to ensure their place in the energy ecosystem for a long time to come.

Andy McKenna and Craig Rintoul are energy and utility experts at PA Consulting Group

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