We are in the midst of a radical and far-reaching digital revolution. No industry is immune. Once the domain of high-tech and direct-to-consumer companies, digital has permeated the entire marketplace. Companies of all industries and sizes must be ready to ride the digital wave.
Formerly commoditized and regulated industries like utilities are primed for the most disruption. In the past, consumers were never a primary strategic focus area, because many were locked into relationships. There wasn’t much attention paid to consumer engagement for power and gas companies. But as competition heats up and more direct consumer interaction channels emerge, utilities can reinvent themselves as the foundation of consumers’ digital lifestyles.
Research from Accenture shows that only 44 percent of power and utility customers are digitally engaged today. Yet consumers use electricity now more than ever to power nearly every aspect of their lives. This is a great opportunity to be a part of the consumer lifestyle ecosystem, rather than a faceless commodity that others use to create superior customer relationships. Utilities can build on the lessons learned from Internet service providers who now compete for customer share with over-the-top (OTT) companies like Facebook, Amazon, and WhatsApp, which make millions on the backs of their infrastructure. Rather than be relegated to “pipe” status, progressive utilities are finding their place in the digital ecosystem by building direct relationships with consumers as trusted advisors. In fact, research from Aberdeen Group found that 35 percent of energy and utility companies now have a primary focus on boosting levels of consumer satisfaction, up from only 18 percent in 2012.
Done right, customer-focused digital strategy will enable utilities to develop customer relationships and intimacy while also driving new revenue channels.
Already, energy companies like Bounce Energy and San Diego Gas & Electric (SDG&E) engage customers through social media and leverage customer data to provide value-added services with predictive and proactive consumer apps. Bounce Energy created a consumer rewards program and is extremely active with its customers on Facebook, Twitter, and other popular social media outlets. SDG&E, meanwhile, created its own green app store-like platform where residential and business customers can connect with third parties to help them with green initiatives like energy audits or purchasing energy-efficient products.
Even the business model itself is changing—New Zealand-based Powershop.nz sells power to consumers primarily through its mobile app. From their smartphones, customers can monitor home energy consumption, be notified when a consumption spike occurs, and choose the source of their electricity, including alternative-energy projects such as wind, solar, or even sugarcane processing and landfill generation. The model is similar to pay-as-you-go mobile phone plans.
Alabama Power disrupts itself around customer engagement
Digital transformation is a big undertaking in the utilities industry, since many companies have essentially operated in the same way for decades, if not centuries. Anthony Oni, head of digital engagement and strategy at Alabama Power, for example, cites his company’s 110-year-old history as both a help and hindrance as it evolves to digitally engage with its 1.4 million customers.
“Our customers are fast moving toward a digital space,” says Oni. “Alabama Power is working to build the digital infrastructure to meet our customers’ growing expectations.” He explains that it’s important to move beyond transactions to a relationship model that extends past the meter into the home.
Even now, innovation in the sector focuses more on technology and energy sources, not the customer experience. “Our industry’s innovations have not historically been customer facing,” Oni says. “Advancements such as the smart grid, or the maturation of energy generation and distribution, are where we’ve typically innovated.”
While safe, reliable power generation and delivery is still the company’s core mission, Alabama Power is engaging with customers to add even more value to the relationship and change their expectations. “It’s simple for us, whatever we do has to add value to our customers,” Oni says. “They will always be at the center of our efforts.” In November, the company redesigned its website to include features such as responsive design for mobile devices, a new customer account portal, streamlined navigation, and quick links for direct access to the most popular account actions. Also included are advisory services for commercial and large industrial customers.
Though it’s a highly regulated industry, Oni says regulations don’t pose too many barriers to customer engagement innovations. He says the key is to “do what we already do, but better. We’re shifting beyond the ways our industry has traditionally thought about relationships with customers. And there is a lot of white space outside of that paradigm.”
He points to a new initiative called SmartNeighbor (SmartNeighbor.com), a standalone e-commerce website from Alabama Power that helps customers make energy-smart decisions for their home. Consumers can purchase recommended energy-efficient appliances, smart-home devices, and electronics, or review “Neighbor Notes” from consumers discussing tips and hacks for living an “energy smart life.” It’s one way the company is transforming the role it plays in consumers’ lives.
“Customers don’t usually think about us unless they don’t have power, but we want to help customers discover how our company can provide them with value beyond electric service to their home,” Oni says. “When they see those little ways we improve their lives they start to think about us differently, and that opens up many new opportunities.”
Trust plays a big part in relationship strength, and that’s where Alabama Power has an advantage, Oni says. “We’ve been neighbors for more than 100 years,” he says. Selling products, recommending home-improvement services, or advising on energy usage are natural ways to add value to customers who have known Alabama Power their whole lives.
Behind the scenes commitment
Internally, digital transformation requires thinking differently about customers, and in some cases, the business model itself. To keep up with innovations around the customer and the industry in general, Alabama Power has an internal innovation team to focus on the future. It also encourages employees to submit ideas and feedback on all parts of the business.
“Our innovation is focused on platforms that make our customers’ lives better,” Oni says. “What can we offer them that provides value and makes them think of us in a new light?” He adds that customers may not even notice innovation that occurs behind the scenes, but it’s still worth doing. Many innovations involve proactive steps to self-correct, re-route power, and ensure that service is not disrupted. More and more, Oni is enthusiastic about opportunities to be more predictive, proactive, and personalized.
“Digital evolution is exciting,” he says. “This is an exciting time because we’re finding new ways to anticipate customers’ needs and delivering experiences that have never been associated with our industry before.”