Energy providers are facing a huge amount of change as energy and lifestyle choices for consumers evolve. Suppliers are facing a customer erosion crisis and need to power-up now to be connected to future consumers. In this blog I’ll outline the crisis and share how Energy suppliers can plug into future growth.
Are you ready for the connected customer?
It’s May 2020. I get a message on my Connected Home App that the heating is unusually high for this time of year so I turn it down using my phone. My electric vehicle is plugged in and being topped up with the extra energy I have stored in my battery. It’s a nice sunny day so I can afford to recharge the battery knowing my energy will be topped up in no time. Luckily, I don’t need to worry too much about this as my energy assets (leased from my energy supplier) can optimise energy capture, storage and consumption on the fly. I open their app to review the peer-to-peer trading options.
This is where things begin to seem a little out of sync with what I’d expect. My energy supplier’s landing page is displaying content that really isn’t relevant to me (so 2018). I’ve lost count of the number of times I’ve been emailed by them to ask if I want to purchase their battery storage solution (I’ve had one for six months). This must be the third or fourth time I’ve visited their website to research peer-to-peer trading, and so I would have thought they’d have got the message by now and made my online experience more personalised. Ho hum! My contract’s up soon so I’ll switch providers…I’m hearing good things from my friends about a new provider on the block, they seem to be talking my language…
The connected customer isn’t a vision of the future. They’re already plugged in and buzzing today. Now, more than ever, customers are intellectually and emotionally engaged with their energy consumption. We’re seeing the rise of super-savvy consumers who have greater control and higher expectations driven by their experiences with Netflix, Amazon Echo, Just Eat and others. Like ever-lasting light bulbs, these consumers are always connected, always on.
As a result, the Energy landscape is going to look very different in the next few years. The disruption around distribution models and digital advances is creating a generational shift in customer engagement with energy players.
The current landscape is something of a wild west with record numbers of consumers switching energy suppliers each month. There are mega mergers on the horizon, over 60 players in the market space (and rising) and rumours of massively disruptive new entrants (Amazon) and intense price competition.
It’s no surprise that 81% of utility professionals believe customer engagement will become increasingly important to their organisation in the next three years.*
The Engagement Gap
This ‘out of sync’ perception of the consumer of the future is described by the Customer Engagement Gap. For energy providers this will result in an erosion of customer relationships if something isn’t done now. It’s an opportunity that the new digital-native, agile challenger brands will be seeking to take advantage of.
Tolerance for irrelevant messages, constant re-targeting, and disjointed experiences will become lower and lower and this will be reflected in customer surveys and satisfaction awards so readily displayed by the likes of aggregators likes Uswitch, an ever-greater force readily promoting switching.
The Engagement Opportunity
To bridge the engagement gap, Energy providers will focus on a customer-first, intent driven strategy to retain customers and build true customer engagement.
The future’s bright for energy providers who prioritise customer relationships today. In tomorrow’s customer-driven world, the players will know their customers’ intent and recognise that every customer journey is unique. The future will be about loyal customer relationships. The prospect of a more equitable relationship with their energy provider is powerful for many consumers.
How To Plug Into The Opportunity
The truth is, trying to meet the demands of the changing market, across millions of customers and touchpoints is hard.
Discounted promotional tariffs are an easy short-term temptation but can end up hurting providers if the customer moves within the first three years. Smart meters are just the beginning and can be seen as a way to restore trust in a sector that is currently highly politically charged. There is great opportunity to increase customer engagement through the explosion of data readily available through smart devices, but this will come with ever increasing expectations of how engagement should feel for customers.
Energy players want to change, and you’re aware of the need to do so. However, there’s some hesitation on how, or where, to start. You might think you need to change your target operating model, re-platform and restructure to make this happen. For many reasons it may be imperative that these things happen but your customers will be left in the lurch for up to two years before they see any improvements. That’s too late for them, and for you.
The fact is, technology exists today that can enable you to deploy a thin engagement layer that can stitch together touchpoints and deliver real-time, contextual conversations across all channels and touchpoints.
You’ll no doubt have an idea of where you’d like to start, so you’ll have been asking questions such as: how can you support customers as they move to smart meters? How are you able to get customers to download your app? How can you present more timely and relevant messages to customers when they are about to switch? Which customers are showing signs of leaving you, and why?
If you get all of this right, customer retention will be lower down the list of pressures, freeing up time and resources for future innovation to meet the needs of the connected customer.
Power up today for the connected future…
* The Future of Utilities Exclusive Research Report Utility Week & Wipro, P.7