The electric utility industry is currently undergoing the greatest period of transformation in its history. Utilities are facing new challenges, and these challenges present opportunities for them to reevaluate business processes that have remained unchanged for decades. This blog series delves into six of what we consider to be the most impactful challenges, dissects them, and hypothesizes how they will shape the future of the utility industry. This blog post explores the first challenge we have identified – the process of adapting to new customer preferences that demand more information and more channels of communication from utilities than ever before.
Justice Louis D. Brandeis once wrote, “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” True to his statement, the utility industry is moving towards a more transparent environment, with greater customer engagement and higher levels of energy usage data available to customers. This information can then be used by the customer to take advantage of different rates and discounts from a utility, or simply to use energy more efficiently.
The utility landscape has altered significantly in the last decade. The industry has undergone massive levels of digitization, and smart meters capable of reporting usage, issuing alerts for outages, etc. are being installed in the field for large, industrial customers and residential customers alike. Technological advances in the fields of networking and information technology are making the internet of things possible on a large scale. These changes have led to a disruption in the utility business model, making utilities evolve into more than just commodity energy suppliers.
1.1 Why does customer presentment matter?
A key difference in the way utilities must now operate is an increased focus on customer experience. Customer satisfaction levels are important not just as potential entry into new markets for ‘beyond the meter’ services, but for regulatory negotiations as well. Customer satisfaction levels often receive more attention in the aftermath of a massive disruption in service, or prolonged or sudden drops in the customer satisfaction levels. For example, let’s say our “Ameritown” utility experienced a decline in customer satisfaction levels consistently over a two-year period. The state public commission requires an audit of the utility’s customer-service practices. Aggressive cost-cutting, a failed implementation of a new online customer portal, and a general lack of commitment to customer service were the main contributors to this decline. In response, Ameritown made an investment to improve customer service, particularly using the digital channels. This increased the expenses the utility devoted to customer satisfaction and ultimately eroded the cost savings the utility had achieved. Had the utility been more proactive with their customer satisfaction ratings from the beginning, costly overruns could have been avoided.
Increased commitment to customer satisfaction will be crucial in two ways. First, it will be useful for reducing barriers to entry into new services that the current energy landscape will provide, such as beyond-the-meter services, dynamic pricing, and collaborations with third party vendors like cable and telecom companies. Second, high levels of consumer trust and confidence can raise barriers for new market entrants and prevent customers from switching to a new, untried market entrant.
Improving customer experience also benefits utilities by providing customers with a feedback loop of their usage patterns and potential costs, both monetary and environmental. This is because as customers get feedback on their energy usage, they can mold their energy use patterns, identify energy inefficient devices, and sign up for new utility programs that reward shifting usage to non-peak hours. This will reduce the need for new generation facilities, make the existing resources last longer, and ultimately be better for the environment as well.
For these endeavors to be successful, it is imperative that the customer engagement solutions from the utility are used by the end user. The bar for successful implementations of customer engagement solutions is constantly set higher and higher. Companies like Google and Netflix, while not direct competitors in the utility space, set the ambitious standards in user interface design that utilities must now aim to meet. Customers expect the customer engagement system to be intuitive, fast, predictive, and helpful.
1.2 What does good customer presentment look like?
An intuitive customer interface for a digital self-service portal is crucial. If an online portal requires the deductive reasoning skills of Sherlock Holmes to navigate through a maze of clicks and menus just to report an outage, that’s probably not a good design! Similarly, a cluttered IVR system without an option to reach a customer service representative is not intuitive enough for customers to use. A familiar, easy-to-use interface for both reporting and gathering information is key to a successful implementation of a customer engagement platform, using both mobile and web-based apps alongside IVR-based solutions.
Loading speed, especially for web-based apps, is also vital to a successful implementation of a customer engagement solution. A feature-rich interface devoid of loading speed will be useless to the customers. Breaking features into multiple screens, or even forgoing some features, may be necessary to ensure the customer experience is not affected by lack of speed.
While showing the usage patterns of the past and present is constructive, users also want to see predictive analysis to determine what their usage and bills would look like in the future. This would also help them determine if enrolling in some of the customer programs the utility offers would be of use to them. The ability to predict future usage is essential for customers to determine how they can mold their usage patterns. Predictive analysis is effective both in terms of monetary savings – for the customer and utility – and environmental impact, as shifting usage to non-peak times often results in lowered generation requirements, which reduces environmental impact.
Perhaps the most important facet of customer engagement is helpfulness. Utilities must consistently strive to make the customer experience as painless as possible by consistently listening to feedback and efficiently training customer service representatives. A customer-focused approach, both during the designing of engagement solutions and the training of customer reps, goes a long way in ensuring that customers successfully utilize the platforms and tools available to get what they need.
In this blog post, we saw how information technology and the smart grid provide a unique opportunity for utilities to engage customers in new ways and transform their business model from energy providers to service providers capable of offering multiple beyond-the-meter services. In the next blog post, we’ll discuss how a more decentralized grid makes this transition into service providers increasingly necessary.
About the Author
As a senior consultant for Red Clay Consulting, Ankit Malik works primarily in analysis of software functionality and client requirements, designing a complete solution, leading teams performing the configuration or custom development required to meet requirements, leading testing efforts including unit, string and migration testing, and delivery support. Ankit offers a strong background of C and C++ programming, as well as significant experience in XML, XPath and many other scripting languages. Ankit has worked with SOAP, AJAX, and is knowledgeable of web services. He is also experienced in Middleware architecture and technologies, including BPEL and Oracle SOA Suite, and has worked extensively with two-way device communications.