Navigant Research Blog

Consumers Are Ready for Upgraded Energy Platforms, and Utilities Should Oblige

— February 13, 2018

Utility managers in the US seeking to shake-up and modernize customer engagement have new evidence to support such efforts. A recent study supports the idea that many consumers are ready for an upgraded online platform to interact with their utility. The study, by Smart Energy Consumer Collaborative, finds nearly half (48%) of respondents said they would use an online platform that combines current and historical household energy usage data, preference settings, utility (or third-party) programs and offers, and use this information to help better understand and manage their energy use.

According to respondents, the two most popular applications are energy rewards programs (52% probably or definitely would use) and energy manager tools (46%). The study authors call on energy market stakeholders to move beyond energy alone and imagine how new innovations from other industry sectors can be applied to their businesses. In other words, think and act more like Amazon.

The study also underscores the growing trend of increased spending by utilities on customer experience tools across the globe, as noted by my colleague, Michael Kelly, in his recent Navigant Research report, Customer Management and Experience Technologies. In this report, he notes how engagement has become a much more complex process for utilities, and exhorts them to take a more proactive approach, deploying across multiple channels in a holistic manner so customers experience a consistent set of information and tools, no matter how they engage.

Behind-the-Scenes Work Needed, Too

There is no question engagement tools should keep pace with current consumer expectations. The customer-facing online tools they see today are often not up to expectations.

That said, there is also work to be done on the backend, those behind-the-scenes processes that can speed up the mundane and create a better experience for customers. Duke Energy has taken such steps by adopting robotic process automation (RPA), a new method of processing customer information. In the past, the company would have to manually process hundreds of thousands of requests a year for starting, stopping, or transferring energy services. That could take 3 business days to simply turn around the request during a peak season. Now, by using RPA technology, Duke Energy processes such requests around-the-clock, and can immediately send a confirmation to a customer who is then assured that their request was received and that follow-on services have been scheduled. This step reduces friction in the system.

Whether it is improved customer-facing platforms or deploying backend system upgrades through new tools like RPA, these steps must be taken by utilities. The customers have come to expect them. It still boggles my mind, though, at how slow the shift to new digital tools is in the utility sector compared to others. But at least the movement is headed in the right direction.

 

Hacks Lead to Frustration, Doubt in IoT Security Schemes

— November 2, 2016

Enough with the security breaches that leverage Internet of Things (IoT) devices and home Wi-Fi routers. The latest attacks on major websites clearly shows that the current schemes for locking down these connected devices are broken.

A quick recap of what happened on October 21 illustrates the problem. A double-dip distributed denial-of-service (DDoS) attack caused outages for some of the leading Internet destinations such as Twitter, Amazon, Tumblr, Reddit, Spotify, and Netflix. The attacks were pinned on a cyber criminal, or criminals, who used the Mirai malware, the same malware that took down sites in September. This malicious botnet searches the Web for IoT devices such as CCTV video cameras, digital video recorders, or Wi-Fi routers that still have factory-default usernames and passwords in use for protection. Such vulnerable devices are then organized to send junk traffic to online websites that eventually crash from the huge volume of traffic coming from multiple devices, sometimes in the hundreds of thousands or millions.

Outages Caused by Mirai Malware on October 21, 2016

neil iot hack

(Source: Downdetector.com)

This latest attack caused the US Department of Homeland Security (DHS) to hold a conference call with 18 major communication service providers to develop a new strategy for securing IoT devices. DHS officials said its National Cybersecurity and Communications Integration Center is coordinating with police, private firms, and researchers to better fend off future attacks that exploit the mushrooming number of IoT devices.

Two of the hardware manufacturers involved in the attacks have said they would take steps to reduce the risks from such attacks. Chinese firm Hangzhou Xiongmai Technology, which makes surveillance camera components, said it was recalling some of its products sold in the United States. Dahua Technology, also a Chinese company, said some of its older cameras and video recorders are vulnerable to attacks when a user has not changed default passwords. Dahua is now offering firmware updates from its website to fix the problem, and is offering a discount to customers who want to exchange their device.

These are positive, after-the-attack steps, but the damage done still leaves a cloud hanging over the IoT trend, particularly among consumers. A new survey finds 40% of respondents saying they have no confidence in the safety, security, or privacy of connected devices such as web-enabled thermostats or appliances, according to IT security firm ESET. Moreover, more than half of respondents indicate they are discouraged from buying IoT devices because of cybersecurity concerns.

Success Hinges on Promise of Security

I still count myself among the many proponents of the IoT. The world of connected devices, systems, and services promises many helpful applications and use-cases that benefit users, particularly in terms of energy efficiency and convenience. However, the constant drip of hacks and the misuse of connected devices needs to stop. The vendors involved need to do a better job of securing the devices and helping end users to do the same. Otherwise, the promise of an IoT market will not be met, and the lost opportunity could mount to millions or billions of dollars. Security needs to come front and center for all parties. If the IoT trend is of interest, Navigant Research has just launched a new IoT research service that is worth checking out.

 

Utilities, Want to Engage Your Customers? There’s an App for That

— June 15, 2016

Computer and TabletIn today’s world, there is an app for everything, and the energy industry is no exception. Though the market for energy apps is still in its early stages as utilities and energy-focused vendors of hardware and services mine data from devices like smart meters, smart thermostats, and connected appliances, the number of available apps is growing, and customers now expect them to be readily available. According to a 2014 study conducted by Accenture on digital customer engagement, as energy consumers become increasingly connected through social and mobile channels, they will expect energy providers to be on par with the experience delivered by other service providers.

However, this is not so easy for utilities to do themselves, as the organizational structure of utilities can be siloed and funding for these types of initiatives can be hard to obtain. To answer this call, platform providers in the energy space have begun to shift their solutions to include more mobile-friendly offerings. For example, on June 13, Tendril announced the release of Tendril MyHome, a mobile app targeted at utilities that want to offer their customers a mobile experience. Duke Energy, which has worked with Tendril to execute one of the “world’s largest and most successful behavioral energy efficiency programs,” will be the first utility to offer the Tendril MyHome application to its customers. Tendril will join a list of other vendors in this space also offering a mobile experience for utility customers, including Opower, Bidgely, and C3 IoT, to name a few.

Meeting Consumer Needs

While it is increasingly important for utilities to offer mobile apps, the most important thing for players in this space to remember when engaging customers through apps is that the experience must meet the consumers’ needs. It is not enough to simply offer consumers an app; it has to be a worthwhile offering. According to Nielsen, in the United States, consumers spend more than 30 hours a month using phone apps and use 27 different apps each month on average. This means that energy apps have a lot to compete with, especially in an age where 75% of app users across all industries churn within 90 days. With so many apps for so many different applications, an energy app that isn’t worthwhile to its users will get lost in the mix.

In Navigant Research’s 2015 Energy Apps for Residential Customers research brief, best practices for mobile apps targeted toward utility customers are discussed. These include ensuring the app adds value and provides clear and attainable benefits to consumers, operates consistently across different channels, can adapt to new applications and technologies that will develop over time, and must provide customers with security and privacy, among others. Following these best practices can lead to successful utility customer engagement through these ever-popular mobile applications.

 

Utilities Enter a Brave New World of Customer Engagement

— March 9, 2015

Utility Dive’s State of the Electric Utility 2015, released last month, aptly states that “The greatest challenge for the utility industry may be its greatest opportunity.” The report is referring to distributed energy resources (DERs).  The survey of utility executives across the United States revealed that no less than 70% ofinterviewees see strong opportunities in exploiting the growing DERs market, despite regulatory structures and traditional utility business models that present obstacles. For now, the major legwork is focused on reforming those two critical inhibitors, but once that’s done, will utilities be prepared to navigate the competitive environment through effective marketing strategies for their products and services?

While many utilities still have to maneuver through operational, regulatory, and business plan challenges before they can wrap their heads around marketing strategy, the fact of the matter is that the private market for DER products and services is already very mature across the United States—and strong competition requires equally strong marketing.

Information Flood

To be clear, I do not consider utilities to be marketing laggards; pretty much every investor-owned utility (IOU) that I know of (and many municipal and cooperative utilities as well) has a marketing team that can shape, execute, and evaluate successful customer-facing programs.  The problem is that all of their future competitors also have skilled, innovative, and highly resourced teams that are experienced in conducting business in markets undergoing disruption.

One challenge is that marketing and branding have gone through enormous changes with the rise of the internet.  Consumers have an increasing number of outlets to research and review products. Unfortunately, the Internet is also unruly by nature, and it’s easy to be misinformed and end up misdirected. Marketers are held responsible for creating pathways for online users to obtain accurate information and get to the best purchasing point—no simple task, given that this requires a highly developed understanding of consumers and the obstacles they face online. For an example of how this might pertain to a utility that wants to, say, participate in the solar leasing market, just google “solar lease”; the results will speak for themselves.

Getting to Know You

Something that I’ve heard about a lot when I read about the so-called utility “death spiral,” is that utilities do not know enough about their consumers or how to interact with them, because they’ve never really had to. I actually disagree with this, but even if it were the case, utilities are still better prepared to get to know their customer than many think—just see Navigant Research’s report, Smart Grid Data Analytics for Customer Engagement.

Unlike the vast majority of the private sector, utilities already have access to many different types of information for their entire target consumer base. Customer information and billing systems are a starting point, but with advanced metering infrastructure and other forms of intelligent grid monitoring becoming commonplace, there is additional relevant data being collected across the grid.  Navigating data privacy correctly, utilities will be able to consolidate information on many different levels to track customers’ energy usage and pinpoint their needs–the first step to effective marketing.  This is something that competitors with limited data may perpetually be stuck guessing about, and might be the edge that utilities will be looking for.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Digital Utility Strategies, Electric Vehicles, Energy Technologies, Finance & Investing, Policy & Regulation, Renewable Energy, Smart Energy Program, Transportation Efficiencies, Utility Transformations

By Author


{"userID":"","pageName":"Customer Engagement","path":"\/tag\/customer-engagement","date":"5\/22\/2018"}