How Utilities Can Stay Competitive in the New Economy
There was a time when utility companies enjoyed both kinds of power – the kind that traveled through circuits or pipes as electricity, water, or gas, and the type that moved between the utility and its customers as energy potential. Subscribers had no choice but to pay their bill and buy from the only game in town. It was all very one-sided.
But that is no longer true.
Today, the electric grid is getting smarter, as is every person, company, and object connected to it. Homes, buildings, cars, and appliances don’t just consume energy, they now have the intelligence to generate data, track progress, and make decisions regarding that consumption.
Advancing Customer Engagement
The growing smartness of everything and every individual connected to the grid has resulted in the ultimate circular relationship, in which power, data, and money travel in all directions. Utilities can become consumers even while they supply. Customers are becoming suppliers even as they consume.
New, non-traditional players, like telecoms, are bursting into the marketplace with innovative technologies like solar-plus-storage, bundled with their internet and telephony products.
This means the entire industry is in a state of rapid flux, not just technologically, but also strategically, and this strikes at the Achilles heel of most utilities – the customer relationship. The drivers around customer engagement have changed, and utilities are waking up to a reality that other industries have already discovered. Each customer feels empowered and expects a unique, tailored experience through every touchpoint.
Leveraging All Available Data
The evidence of these changes can be found everywhere.
- There is a channel shift underway. Customers now prefer to initiate and maintain self-service relationships with their utilities through their smartphones, instead of calling customer service.
- Renewables, like distributed generation, IoT devices, and smart grids are challenging utilities and regulators alike.
- Proactivity is the new normal. Subscribers expect to be alerted about high consumption or outages. They want utilities to provide products and services that help them better manage consumption, expenditures, and upgrades, without having to ask.
Employing the same techniques that the powerhouses of industry, retail, and communications are now using, utilities must recognize that customer data is as important as the utility products and services they supply. When retrieved through connected devices, this customer data allows utility companies to create a uniquely powerful knowledge base. By leveraging this data, they can communicate with and directly serve each subscriber in relevant, contextual and proactive ways.
It is difficult for many utilities to relinquish the control they have enjoyed, and this hits doubly hard when these same empowered subscribers reveal themselves to not only have more knowledge about what they consume, but also that they may prefer to rent rather than own. Car sharing is impacting the automotive industry, subscriptions are changing software and media, and renting solar panels and other technologies from utilities is replacing previous ownership models.
These are significant changes. It is a service economy now with new financial models, even for the biggest players.
New opportunities, like solar panels, wind power, smart meters, and intelligent home technology challenge utilities to move beyond their traditional comfort zone into an area where they must collaborate with other vendors, retailers, and the customers themselves, to provide replacements for existing services, and venture into new lines of business like consulting and training.
Dissolving the Barriers to Success
Utilities need not feel flat-footed in this race since they are already well placed to collect the essential raw materials. They are now masters of real-time data collection from grids, sensors, transformers, and meters, and they have all that customer data coming in all the time.
And they also have won the trust of their customers.
People trust their utilities more than was once thought. A recent Accenture study puts utilities among the fourth most trustworthy organizations, while by comparison, retailers are in eighth place.
Combined with powerful brand recognition, the most innovative, customer-centric utilities are moving into an excellent position for the next chapter in the evolution of this industry.
To learn more about how you can benefit from this new landscape come see us at the International SAP Conference for Utilities, March 28th – 30th, 2017, Lisbon, Portugal.
We have a dedicated workshop covering the topic of customer engagement: “Engaging with Customers: How to Choose the Right SAP Solutions for Customer Engagement” as well as an “Innovation Booth” showcasing our SAP Hybris solutions. See you there!