Reinventing the Utility Industry: Customer Strategies and Technologies

Significant disruptions confront the energy and utilities industry today, with challenges coming from seemingly every direction and at every level.

Jan 27, 2020 by Kelly James
VP & GM, Energy & Utilities
15 minute read in Energy & Utilities
Reinventing the Utility Industry: Customer Strategies

Article written by Kelly James, VP & GM, Vlocity Energy & Utilities for Electric Energy Online

New energy sources, inflexible infrastructure, consumer demands and climate change are just a few of the forces affecting this once stable and most traditional of industries.

Contributing to the urgency is that customer expectations are changing rapidly, driving much of this change from the bottom up. Commercial, industrial and residential energy consumers are demanding a new relationship with their power providers. In this dynamic, the relationship is more consultative, centered around expert advice concerning power usage, or on creative ways to get a better return on investment.

Today’s customers have been trained by Amazon, Google, Apple and other online vendors to expect personalized service from service providers and marketers. And, as new generation options enter the market, consumers now expect energy to be delivered the way they want, e.g., from renewable sources that reduce carbon emissions.

Simply put, customers want choice and sustainable energy options.

To respond to these demands, energy suppliers in competitive markets and even utilities in traditional regulated models are responding to the pressure to evolve or face displacement by new players in a potentially very different energy industry. Not only are service and delivery models changing in today’s digital world, but leading energy companies are transitioning out of the fossil-fuel based economies that were the bedrock of their revenue models. “We are at the start of an energy revolution,” says Isabelle Kocher, CEO of Engie, who is taking risks and leading the pack in the industry’s transition to a zero-carbon energy future.

The fulcrum is about to tip, and the time to act is now. The good news is that the tools are available to create the value-focused relationships that consumers want.

Enabling customer strategies

The traditional, top-down, “one-way street” relationship with customers is over. The new relationship requires a change in thinking and approach, one based on partnership, as utilities pivot to become trusted advisors on all issues relating to energy and consumption habits.

The industry is well positioned to forge this new customer relationship. Despite oft-cited Accenture statistics about customers only spending 9 –11 minutes per year thinking about their utility, utilities in the United States remain the number one entity trusted by consumers to advise on their energy choices. A recent survey by the Smart Energy Consumer Collective (SECC), found that 78 percent of consumers in the U.S. trust their utility and are more likely to participate in a program or purchase a product if their utility endorses it.

Not only are service and delivery models changing in today’s digital world, but leading energy companies are transitioning out of the fossil-fuel based economies that were the bedrock of their revenue models.

Utilities can capitalize on this opportunity in one of two ways. First, they can embrace a consultative role, offering trusted advice regarding all things digital and energy-related to the customer. Second, they can offer the right set of solutions to meet customer needs and sustainability goals.

Utility companies have a golden opportunity to provide this advice and these solutions. Why? Because they are sitting on a treasure trove of customer data. But they must be smart about how to analyze and leverage this data to give customers more insight and to tailor products and services to their needs and desires. Companies such as Google or Amazon may have considerable data about a business or residential customer’s energy use, too – but the utility is still the source of the commodity, usage data and rates. By and large, utilities still have the advantage of data stewardship and customer trust, and the opportunity to use their advantage to benefit the customer, both directly and through strategic (and potentially revenue generating) partnerships.

Making the shift possible

Agile digital technologies are the key to providing a 360-degree view of the customer, transparency into transactions and the means for creating relationships that will allow greater customer choice in a value-driven, multi-dimensional energy market. Digital operations are already driving new investment in data-driven technologies, such as artificial intelligence (AI), machine learning, IoT sensors and agile approaches to improving operational and maintenance efficiencies. All of which, in turn, will continue to reinforce the shift to the new partnership between energy companies and their customers.

Competitive energy markets, out of necessity, are driving innovation in customer digital technologies. The operational efficiency gains, the customer benefits, and the lower risk agile nature of these transformations are highly applicable to utilities in the rapidly evolving regulated energy markets as well. British Gas, the largest energy and home services supplier in the United Kingdom (UK), provides an example of how the digital transformation of business processes benefits a company’s bottom line while improving its customer relationships. This UK energy supplier is leveraging digital technology to lower costs, improve business processes and accelerate the time to market for new offerings.

A new strategic technology solution based on technology from a San Francisco-based provider of cloud and mobile software significantly improves a key business process: quotes that previously took three days are now delivered in under three minutes. That’s an outcome that “meets the rising expectations of our business customers,” according to Ronald Starreveld, Director IS Architecture, Business and Energy for British Gas’ parent company, Centrica.

A platform, such as Salesforce’s leading cloud-based CRM, can help accelerate this customer-centric shift and provide the technology that underpins the new relationship between customer and the utility industry. Modern cloud platforms fuel customer-centric innovation by providing crucial enterprise-grade security, scalability, performance and availability – while also providing a robust and agile base for complementary applications, processes and technologies. And true platforms also enable industry-specific product offerings. A utility-specific platform in a low or no-code environment can greatly speed innovation for the electricity, gas and water utilities sectors in particular, allowing IT to move at the pace of business and delivering unified, omnichannel customer experiences at a fraction of the price of custom-built or black box offerings (that are, in contrast, closed, code-heavy and general-purpose). The result lays a future-proof foundation for agility, transformation and disruptive innovation without the significant IT and business risks and maintenance that come with custom solutions or major changes to legacy systems.

Competitive energy markets, out of necessity, are driving innovation in customer digital technologies. The operational efficiency gains, the customer benefits, and the lower risk agile nature of these transformations are highly applicable to utilities in the rapidly evolving regulated energy markets as well.

The customer benefits from a greatly enriched experience as they gain access to a host of energy information and services from their phone, tablet, laptop or other smart devices. Services such as the ability to review current or historic usage patterns, order solar panels or monitor one’s carbon footprint, to name but a few examples.

French multinational ENGIE recently set a goal to become the world leader in the zero-carbon transition and began shifting from a utility company to a provider of low-carbon energy and services. ENGIE’s ambition is to bring consumers with them on this journey and develop the next generation of employees to deliver this ambitious new service. But even as ENGIE reimagined the ways it engages with customers, like all utility companies, ENGIE is challenged in these efforts by the limitations of legacy systems built for another era. In order to realize the future state it envisioned, ENGIE needed to digitally transform.

To assist it in this digital transformation, ENGIE is partnering with Salesforce, Accenture and the previously-mentioned San Francisco-based provider to deploy a global, unified customer relationship management (CRM) platform. ENGIE replaced a fragmented amalgamation of applications with a single layer offering a common, intelligent view of customers. This heightened visibility allows ENGIE to put its customers at the center of its business while empowering its employees in countries around the world to drive customer success, transitioning together to the zero-carbon energy future they envision. They can more efficiently serve and advise customers on the right products and services to meet customer green-house gas emissions goals and take their companies into a greener future.

Additionally, ENGIE’s commitment to a zero-carbon future is attracting a highly skilled workforce that will serve the company well far into the future. “Truly motivated employees rally around their company’s business model,” says ENGIE Chief Digital Officer Yves Le Gelard. “They are the human link between your company and your customers.”

Le Gelard sees employee engagement as critical to customer success and is excited to find potential employees attracted to ENGIE’s goals. Since adopting its new value proposition, ENGIE has become known as “the place to be” for prospective employees who care about sustainability, as evidenced by a surge in unsolicited resumes.

New and more profitable customer relationships

ENGIE operates in competitive and newly deregulated energy markets across the EU -- markets that, by design and necessity, are now driving investment digitalizing both customer and infrastructure operations. Utilities, particularly in the USA, where deregulation lags behind the EU, are learning that even though they have a mostly captive customer base, their customers are going to continue to demand a new relationship and level of individual personalization. So, the need to support digital transformation is just as important – even if it is more challenging due to the sheer size of the customer base and the need to serve all segments of their individual markets.

The bottom line, however, is that short-term pain is certainly worth the long-term gain for customers and the industry.

The modern digital ecosystems that will be created will increase transparency and improve performance for utility customers. This will ensure that they will remain loyal and engaged. In turn, empowered customers will inspire new business models as utility companies learn to quickly adapt to the changing digital energy landscape.

An empowered workforce will have the tools they need to provide enhanced customer personalization, responsiveness and knowledge – working faster and more interactively to reinforce customer loyalty. A 2019 study by J.D. Power showed an 80 percent improvement in customer issue resolution when agents were armed with a modern, digitally-enabled a 360-degree view of the customer – which also led to a markedly increased level of customer satisfaction, particularly when customers interacted with new applications.

The bottom line, however, is that short-term pain is certainly worth the long-term gain for customers and the industry.

Increasingly, the industry will be shaped by employees who can be proactive because they are informed by data and intelligence surfaced by AI. The same set of underlying digital technologies that will make this possible will be available to customers, too, so those who want more hands-on involvement in their energy choices, will have it. Utilities already have the capability to bring information to customers that they may never have thought possible before. This also has the exciting potential to save them millions of dollars while enabling energy sustainability goals.

The future for the utilities and power industry will be shaped by those who digitalize first and best. Electrical utilities have a great window of opportunity to seize the lead and shape this digital energy future.

To learn more about Vlocity Energy & Utilities, visit energy.vlocity.com.

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