Utilities and consumer-centric innovation have not always gone hand in hand. But disruptive technologies and shifting values and preferences are forcing utilities and a range of other organizations to look for ways to reinvent the energy experience.
Reimagining an experience that many consumers take for granted is no easy task. Most consumers us do not think much about their utility company when they turn on the lights or turn up the heat. Our research has shown that the average consumer interacts with his or her utility provider only nine minutes a year, and more than half have actually had no interaction in the past year. In order to meet conservation objectives, increase revenue, or improve customer satisfaction, many utilities are looking to change this relationship. Based on four years of global consumer research, we see a number of critical priorities for organizations that want to successfully create a new kind of energy experience for consumers.
Creating an enterprise state of mind
Today's energy consumers expect a seamless experience across products, services, and touch points. However, with the expanding channel mix and growing set of processes that span organizations, many energy providers face the challenge of breaking down silos and delivering a consistent experience. Consumers view their energy provider as a single organization, but in some cases today, consumers are left feeling that their energy provider is three or four separate companies rather than one integrated organization. Some energy providers have achieved success by improving core customer service with a focus on critical drivers of customer satisfaction, such as first contact resolution, billing accuracy, and new channel enablement.
Despite energy providers' progress, a range of emerging challenges are raising the bar once again. Increasing energy costs and, in some markets, smart meter rollouts have eroded positive consumer sentiment. According to Accenture's recent report entitled "The New Energy Consumer Handbook," consumer trust in energy providers has fallen nine points, from 33 percent in 2012 to 24 percent in 2013. Many competitive markets are facing similar challenges and are characterized by high levels of customer churn, complicated rate schemes, and a general lack of trust. In fact, globally, energy providers' customer satisfaction declined from 59 percent in 2012 to 47 percent in 2013. This may be due in part to providers' traditional transaction-oriented service model. Another likely contributor is the persistence of operational silos and the resulting inconsistency in management and ownership of end-consumer interactions.
As energy providers look to create a new kind of customer experience, they will need to take an outside-in view of the organization. An enterprise mindset incorporates the consumer's perspective, values, and actions into business and operations, strategy, capability development, and operational execution. This drives not only consistency, but also simplicity inside and outside the organization. In doing so, a utility can improve consumer engagement and build loyalty—ultimately driving top- and bottom-line business performance.
Engaging the consumer ecosystem
The definition of an energy consumer used to be relatively simple. It was a consumer who was attached to a "premise" using energy. A utility would track how much energy each premise used, send a bill, collect payment, and repeat the process again every month or quarter. But as electric vehicles, prepaid energy, solar panels, and other new technologies take hold, there is no longer anything simple about defining—or understanding and serving—energy consumers. Today, energy consumers may be producers of energy or they may be roaming consumers, charging vehicles in various places.
New technologies are one factor changing the definition of an energy consumer, but others, such as some utilities' efforts to encourage energy conservation, also require a different view of consumers. While within households, a utility company's relationship is primarily with the bill payer, our research has shown that a significant amount of energy usage is influenced by people beyond the bill payer (see chart). Engaging home service providers and others in the home requires tailored experiences, channels, and messaging.
Reinventing the energy experience will require a shift to a dynamic consumer concept that recognizes new types of consumers. Energy providers now need to consider overlapping consumer types that require differing levels of sophistication to understand and engage.
Redefining the value proposition
Electricity, gas, and water are quickly becoming more than commodities. They are evolving into consumer products that can align with consumers' values and preferences. Simply put, energy is not what it used to be. Many providers have long offered a relatively simple, mass-market value proposition—one defined by safety, reliability, and customer service when needed. But increasingly, energy can deliver against consumer values and preferences such as sustainability, convenience, control, and cost savings.
Providers have a range of opportunities to redefine the traditional energy value proposition. Alternative brands, "gamified" conservation challenges, innovative digital applications, bundled products and services, and "set and forget" energy management solutions are all emerging as viable solutions. In fact, Accenture's "Actionable Insights for the New Energy Consumer" shows that more than half of consumers would be interested in additional products and services from their energy providers including home energy audits, home energy generation products like solar panels, and devices that automate home energy management.
Extending the value proposition offers opportunities for providers to differentiate in a crowded marketplace and pursue new revenue opportunities. In noncompetitive markets, it is a way to extend the relationship with consumers—by acting as a trusted energy advisor and addressing conservation-related goals. In competitive markets, value-added products and services can help improve consumer stickiness, increase share of spend, and reshape providers' brands.
This is an unparalleled time of transition and opportunity in the energy marketplace, and the role of utilities is being recast. Today, providers have the chance to fundamentally reshape their relationship with consumers by creating a more integrated consumer experience, engaging the broader consumer ecosystem, and redefining the energy value proposition. However, utilities are not alone in looking to create a new kind of energy experience. In competitive and noncompetitive markets, nontraditional new entrants including telecommunication companies, security companies, and home improvement retailers are also looking to reshape how consumers use and manage energy. For utilities, it is important to move quickly to define the role they wish to play and continue to evolve to meet the shifting values and preferences of the new energy consumer.
Greg Guthridge is the global managing director for Accenture Energy Consumer Services. Nicholas Handcock leads Accenture's New Energy Consumer program.