With deregulation comes competition. There are many quotes that site if you want to be successful you need to know your competition, but who is the competition?

In the 1990’s, if you told me that I would be buying my milk from my local gas station, and that the gas station was now a competitor to the grocery store, or that the grocery store would be a competitor to the banking system because I can get cash without paying those annoying ATM fees, I just never saw that coming.

Now for the utilities industry, who will ultimately be the competition, not just the neighboring utility.

Both my children are now in university and when we were picking out their courses, we realized that they were building their careers for jobs that do not yet exist.

The next generation utility must reinvent themselves, and no longer just be a traditional utility to succeed. They must understand and leverage new technologies quickly to maintain a competitive advantage.

An example is social media. Again, my children are now new customers to the utilities industry. How is the utility industry attracting their attention? If you are sending a paper marketing notice to my daughter, I am not sure she knows where her mailbox is in the apartment complex she lives in. If they try to call her, heck, she doesn’t answer the phone when I call. Text messages get deleted, email has gone the way of the albatross to that generation, Facebook may be an option, although my son, just a few years younger, that generation no longer uses Facebook.

Utilities need to take on new market models, and provide additional services that just electricity, gas and water.

McKinsey offers good insight into recommended new business models for utilities.

To be successful in the future utilities should consider adopting at least two to three of the following business models.

The Distributor –utilities should purchase in bulk to acquire a discount price, then resell at a profit to their customer base. Examples of this would include solar panels, energy efficient appliances such as tank-less water heaters, programmable thermostats or home charging stations.

The After-Sales Specialists – once a customer has purchased a new energy product or service, the utility should offer ongoing maintenance or evaluations on how their customers can maximize the usage of their new item. This could also include offering maintenance contracts, leasing and warranties.

The Lead Generator – when marketing to their customer base, the utility could provide potential leads to other partner companies that offer products their customers are interested, and then receive a lead generator fee from the partner company. This could include any service such as energy efficiency products and services, home security services telecommunication services, and many more.

The Aggregator – utilities have been talking about this for years to aggregate billing on a single bill, but now this has come to fruition in other ways. Imagine that you schedule your move to another premise and your electric utility will take care of address and service change for gas water, telecommunications, and cable?….Oh my wife would be happy.

These are exciting times we face in the new energy world.

On April 13-15, we will be holding our 10th SAP International Utilities Conference in Berlin, Germany. Come learn what other utilities from around the world have in mind to become the Utility of the Future.

I am interested in hearing how you view the future, and with regard to the competition….never interrupt your enemy when he is making a mistake.


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