• January 27, 2012
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Customer Interaction with Utilities via Social Media Is on the Rise

As social media adoption continues to grow, utilities of all sizes are recognizing the impact these new services can have on their marketing, communications, and business strategies, according to a new report from Pike Research. Utilities increasingly are turning to social media to communicate with customers, keeping them informed about pricing and billing changes, educating them about new products and services, and allowing for a more engaged relationship with them.

Pike Research senior analyst Neil Strother says utilities are using different social media outlets for different things. For example, they use Twitter to alert customers about outages and to provide updates for when service will be restored. Facebook serves more as a platform for educating consumers about topics like conservation, and YouTube is a great resource for posting instructional videos, company information podcasts, and other multimedia content.

It's important to note that the social media communications go two ways. Approximately 57 million customers worldwide used social media to engage utilities in 2011, and that number is expected to rise to 624 million customers by the end of 2017, according to the research, which is based on a Web-based survey of more than 1,000 U.S. consumers.

"For many people, social media has emerged as a useful way to engage with their utilities, and somewhat surprisingly, these customers are doing so on a fairly frequent basis, as our survey data shows," Strother says. "Most of these customers are younger adults under 30 who have embraced social media as their preferred communication tool."

While the overall percentage of customers who interact with utilities using social media is not large, at slightly less than 11 percent, of those who do communicate with their providers using social media, nearly 60 percent say they do so either very often or regularly.

Strother says its not surprising. "It's just a fact that more people are using social media more,' he says. "For people on social media, it's their preferred means of contact with everyone—their family, friends, etc. Engaging with a utility just seems natural to them. It's an extension of what they're already doing with everyone else."

The primary reasons for contacting a utility using social media are billing issues or to obtain information. Somewhat surprisingly, the percentage of respondents using social media to praise their utility's service (24.7 percent) is more than double that complaining via social media (11 percent).

Utilities fall within the second tier of social media adopters, according to Strother. The first wave, he says was large consumer brands, like Coke and Pepsi, with large marketing budgets and resources from which to draw. Utilities, on the other hand, are much less competitive, so they don't have to do as much marketing and promotions, he adds.

Nonetheless, he recommends that utility managers should have some strategy in place for listening to and engaging with customers via these newer channels.

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