Leading customer experience organizations such as Amazon and Netflix have redefined the customer journey, raising the bar significantly, and utilities are now racing to catch up. In a recent PA Consulting Utility Customer Experience Insights Study, top utilities graded their customer capability maturity as 2.5 on a 4.0 scale. However, most reported plans to evolve towards the 4.0 level within three years.
You might ask – why?
These changes are putting customers in control of their energy purchases.
Technological advances and regulatory changes have paved the way towards energy alternatives. Rooftop solar installations has experienced an annual average growth rate of 54% in the US over the past 10 years. The price of residential rooftop solar has decreased from $40,000 to $17,000 for the typical house over the past eight years, about $3,000 per kW installed. According to NREL, the price per kW installed for residential solar PV could be as low as $2,000 per kW by 2020. Behind the meter storage systems that can provide renewable power when the sun is not shining are being marketed by companies like Tesla and Sunrun. Third-party applications to control home thermostats, measure usage and control appliances in real time are being downloaded for free. Customer-owned rooftop solar, especially combined with some form of battery storage and a smart home app can put individual customers in competition with the utility.
Regulators and other policy makers are also encouraging a more competitive marketplace. Senate Bill 100, recently passed in California, updated the Renewable Portfolio Standard and requires retail electricity to be carbon-free by 2045. In addition, Hawaii has already established a state policy for 100% renewable energy resources. Much of the replacement energy is expected to come from customer- or community-owned solar systems, which could have a significant impact on the traditional utility business model.
The utility’s network of transmission and distribution facilities will continue to deliver energy providing the utility a critical role in the lives of many people. Utilities realize that typical digital journeys in other sectors are have become table stakes for both improving customer relations, reducing costs and facilitating rapid design and delivery of new products and services.
How are utilities preparing?
We have observed several trends as utilities redeploy resources to transform their customers’ journey.
Utilities grading themselves 2.5 on the scale did so due to the level of satisfaction their customers had with basic self-service options delivered through a phone voice response system and/or largely unintegrated website. Often new products were introduced mainly in response to regulatory requirements. The utilities that want to move toward a 4.0 on the scale will provide their customers with omni-channel offerings, seamlessly integrated and measured across all virtual and human contact points.
Wayne Lafferty and Diana Lai are energy and utilities expert at PA Consulting