Navigant Research Blog

The Adaptable Utility: In a Darwinian Era, Only Evolving Companies Will Thrive

Carol Stimmel — September 17, 2012

Utilities are facing a learning curve, but to paraphrase Darwin, it’s not the strongest that will survive, but the most adaptable.  In most utilities, the relationship between the utility and the customer is largely transactional; the provider delivers electricity, gas or water and the customer pays for that service.  However, as the grid modernizes and consumers become increasingly vocal and expressive, asking the customer to interact with the utility in the way that’s easiest and most efficient for the utility is no longer a viable strategy.   Control, persuasion, and influence have run their course; instead, helping consumers achieve benefits efficiently and effectively is at the heart of consumer empowerment and utilities’ success going forward.  (For more on this topic, sign up for this upcoming webinar on Smart Grid News, titled “Lessons from the Real World: Understanding and Engaging with Your Customers,” on September 25.)

The empowerment of energy consumers is an opportunity to drive innovation in the utility that can create operational and competitive advantage (where there is competition) by interacting with people on topics related to energy information, efficiency, safety and new product offerings.  The digitization of the customer voice, powered by individuals’ ability to access information on almost any topic instantly, is a potent determinant for the success of customer relationships.  The interactivity of social networking creates a collective customer experience where customers discover new products together and share their experiences and their opinions.  Anybody who has ever gone to Google for help with a computer problem understands this; like-minded users are often better qualified to help other customers than company employees.

By recognizing the fact that customers can and will advise each other, utilities that seamlessly integrate company expertise in a manner that facilitates customer collaboration will create gratifying experiences for their customers.  As the Smart Grid News webinar will explore, utilities can increase customer satisfaction and loyalty at a lower cost than traditional means of reputation management, differentiation and marketing.  To realize a return on investment from these new processes, utilities must adapt their customer interaction practices and develop systems for the analysis of results that allow for adjustment and fine-tuning of useful and meaningful messages.

Realizing that current marketing practices like “message exposure” and “captive audiences” may in fact be creating worn-out and bored customers is the first step in moving toward customer empowerment.  Utilities must become customer-centric for real engagement to work.  The primary difficulty is accepting that there is a loss of control perceived in turning the organization to an outside-in focus.  This fact underscores the need for a comprehensive approach to creating cultural change that acknowledges the fact that customers are strategic assets, not captive ratepayers.  Adaptable utilities will figure out how to optimize and exploit innovative and emerging application platforms to deliver tailored marketing strategies, tools that make it easy for customers to understand the product offerings that help them modify their consumption patterns, and merchandising techniques that provide information, interaction, and customization.

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