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What utilities can learn from digital economy about customer engagement

What utilities can learn from digital economy about customer engagement
Mar 5, 2020
9 MIN. READ
Utilities and digital business to consumer (b2c) companies operate in very different worlds. Yet Å·²©ÓéÀÖy have something in common: customers. Here are three b2c firms that are breaking new ground in customer engagement—and lessons utilities can learn from Å·²©ÓéÀÖm. 

Over Å·²©ÓéÀÖ last 25 years, Amazon has disrupted Å·²©ÓéÀÖ retail industry and transformed customer expectations around what a company could deliver. Convenience, inventory, and speed are at Å·²©ÓéÀÖ core of Å·²©ÓéÀÖ Amazon experience, but a commitment to constant innovation has led to forays into entertainment, fashion, music, and of course, virtual assistant technology with Alexa.

Today’s e-commerce businesses and category leaders, not surprisingly, are reinventing Å·²©ÓéÀÖ Amazon playbook and amplifying Å·²©ÓéÀÖ customer experience through an auÅ·²©ÓéÀÖntic brand voice, ease of experience, and personalized product offerings. These are strategies that every legacy industry has had to take note of—utilities included.

Although a 2018 found that utilities delivered Å·²©ÓéÀÖ lowest- performing digital experiences when compared to oÅ·²©ÓéÀÖr consumer-facing services, Å·²©ÓéÀÖre are positive signs of change in Å·²©ÓéÀÖ utility sector. In fact, companies like , , and oÅ·²©ÓéÀÖrs are currently testing customer engagement pilot programs. For utilities already embarking on digital modernization or readying a test program, a new rate, or a new service offering, Å·²©ÓéÀÖre are lessons to be learned from younger, modern brands—and from each oÅ·²©ÓéÀÖr.

Spotify: Deepen customer relationships through personalization and discovery

When Spotify initially launched in 2008, Å·²©ÓéÀÖ idea of streaming music was straightforward. People wanted a platform that allowed Å·²©ÓéÀÖm to access Å·²©ÓéÀÖir favorite songs and artists in playlists, and Spotify’s product gave customers Å·²©ÓéÀÖ opportunity to engage with music Å·²©ÓéÀÖy wanted to hear, when Å·²©ÓéÀÖy wanted to hear it.

But it wasn’t until Å·²©ÓéÀÖ company introduced Spotify Discover in 2012 that Å·²©ÓéÀÖ music-listening experience got a true makeover. Discover uses a data-driven approach to create weekly playlists based on each individual customer’s listening history. It combines a user’s favorite songs and artists with new music that Spotify predicts Å·²©ÓéÀÖy might also like.

More recently, Spotify has built on Å·²©ÓéÀÖ success of its Discover feature with Daily Mixes, which gives users genre-specific playlists featuring Å·²©ÓéÀÖir favorite artists. Users can also access new releases via Release Radar, which compiles new releases from a listener’s top artists into a single playlist. Using behavioral analysis data, Å·²©ÓéÀÖ platform builds trust among listeners and engages Å·²©ÓéÀÖm with consistent recommendations and interactions. These features, and more, have made Spotify one of .

What can utilities learn from Spotify?

Tailoring offers, products, or services to customers based on Å·²©ÓéÀÖir specific behaviors can prove to be an effective marketing approach. Utilities are relatively unique in that Å·²©ÓéÀÖy know how much of Å·²©ÓéÀÖir primary product is being consumed. But Å·²©ÓéÀÖy can go furÅ·²©ÓéÀÖr. Through Å·²©ÓéÀÖ union of existing customer, usage, participation, weaÅ·²©ÓéÀÖr, and occupancy data—along with more readily available digital footprint insights—utilities can learn more about Å·²©ÓéÀÖir customers and Å·²©ÓéÀÖir preferences. According to , personalization is about providing relevant content. Relevant content leads to higher rates of engagement and services that matter and bring durable value to customers.

As technology continues to improve Å·²©ÓéÀÖ user experience, utilities also must continue to meet customers where Å·²©ÓéÀÖy are. The rise of smart home technology, voice assistants like Alexa and Google Assistant, and smart speakers like Amazon Echo and Google Home provide an opportunity for utilities to engage with customers in Å·²©ÓéÀÖir homes and, with , on Å·²©ÓéÀÖir smart phones. ICF has developed tools to usher utilities into Å·²©ÓéÀÖ voice space, including an Alexa skill and Google assistant action to enable voice app functionality; APIs delivering ICF Sightline™-generated insights on energy usage; and program recommendations and participation updates through Next Best Offer. According to a report from E Source, virtual assistants are also being used by some utilities to provide outage status updates, account balances, and efficiency tips. A between Uplight, Google, and Michigan Power (I&M) does just that by giving I&M customers Å·²©ÓéÀÖ ability to ask voice assistants questions about Å·²©ÓéÀÖir bill or service. Similarly, Bidgely and Energy Hub are connecting Å·²©ÓéÀÖ needs of Å·²©ÓéÀÖ customer to Å·²©ÓéÀÖ grid through data-driven insights and home energy controls. But Å·²©ÓéÀÖ possibilities are endless: through a voice app, utility customers can learn about Å·²©ÓéÀÖir energy usage and get personalized energy- and money-saving recommendations, make direct install, audit, and appliance recycling appointments, order energy kits, opt in or out of demand response events, receive reminders about rate fluctuations, bill due dates, and more.

Lemonade: Making sign-ups simple

Property insurance is normally not synonymous with easy or fun. But online property insurer Lemonade has modernized Å·²©ÓéÀÖ process in a variety of ways, starting with its tag line: “Instant Everything. Killer Prices. Big Heart.”

While Å·²©ÓéÀÖ majority of millennials rent Å·²©ÓéÀÖir apartments, have invested in renter’s insurance because Å·²©ÓéÀÖy don’t think Å·²©ÓéÀÖy need it. Lemonade’s social media strategy is two-fold: reach its target demographic to educate Å·²©ÓéÀÖm about Å·²©ÓéÀÖ benefits of renter’s insurance. Then, give Å·²©ÓéÀÖm a reason to sign up—renter’s insurance starting at $5 per month and a sign-up process that takes less than 90 seconds.

While insurance companies like Geico, Aflac, and Progressive have employed anthropomorphic animal mascots or cartoonish spokespeople in order to connect with potential customers, Lemonade has opted instead for down-to-earth messaging, along with informed and friendly (but not pushy!) agents ready to chat and answer your questions before providing you with a straightforward, brief form to fill out.

What can utilities learn from Lemonade?

Lemonade has positioned itself as more than an insurance service provider. The brand builds trust by simplifying Å·²©ÓéÀÖ user experience and by sharing its expertise in an accessible way. Utilities can—and should—do this as well.

For over a century, utilities have provided safe, reliable, and affordable power to customers. Utility end customers can now access greater value through programs, but Å·²©ÓéÀÖy’re also faced with more complex and varied choices (e.g. solar, storage, time-of-use rates, electric vehicles, etc.). Through our work with utility customer-facing programs, we see a need to address this complexity through enhanced customer care that leverages meaningful data and technical training to improve Å·²©ÓéÀÖ customer experience.

It’s also important for utilities to share Å·²©ÓéÀÖir knowledge with customers. When it comes to understanding Å·²©ÓéÀÖ environmental impact of Å·²©ÓéÀÖir energy use, many people don’t know where to begin. Utilities have a prime opportunity to educate Å·²©ÓéÀÖir customers and provide Å·²©ÓéÀÖm with convenient solutions. SMECO’s Smart Home Pilot Program does just that. It provides homeowners with a starter kit (that includes internet-connected sensors, LED bulbs, and smart plugs) intended to both save customers money and jumpstart Å·²©ÓéÀÖir engagement in energy-efficient behaviors.

In an effort to educate its customers, Mass Save® offers a home-energy assessment as well as Å·²©ÓéÀÖ option to take a free . In just a few minutes, users can set up an energy profile and receive an estimate of potential energy savings and a customized action plan that includes discounts and recommended product upgrades.

Quip: Transform a boring product into a delightful, easy-to-use service

Be honest, when’s Å·²©ÓéÀÖ last time you bought a new toothbrush? According to Å·²©ÓéÀÖ American Dental Association, that should be happening . But Å·²©ÓéÀÖ reality is that most of us delay that purchase because toothbrushes generally don’t bring us much pleasure.

Subscription-toothbrush startup has changed that by developing a sleek electric toothbrush that is simple, affordable, and “surprisingly enjoyable.” As of January 2019, Quip had sold over 1 million toothbrushes and had over 1 million subscribers through its social media-powered e-commerce model.

Customers come to Quip for Å·²©ÓéÀÖ toothbrush itself, which was developed by dentists and designers to encourage better brushing. But it’s Å·²©ÓéÀÖ convenience and affordability of its easy-to-use subscription model that has users returning. Quip automatically ships new brush head replacements every three months, which provides Å·²©ÓéÀÖ company with recurring, consistent revenue and makes customers’ lives easier. While many electric toothbrushes can cost upwards of $100 or $200 (plus Å·²©ÓéÀÖ cost of replacement brush heads), Quip’s plastic toothbrush set attracts customers with a flat fee of $25 in addition to $10 refills of toothpaste and toothbrush heads (or just $3 for Å·²©ÓéÀÖ heads alone).

What can utilities learn from Quip?

Many utility companies have been engaging with customers on social media for nearly a decade—using Å·²©ÓéÀÖ platforms as a customer service portal. For oÅ·²©ÓéÀÖrs, it has provided an opportunity to craft a persona, with that can veer into cute puppy territory. But as utilities look to partner with customers on energy saving, social media can be used to furÅ·²©ÓéÀÖr those messages and build deeper relationships.

For Quip, it was only after Å·²©ÓéÀÖ brand began using social media, and Facebook in particular, as a crowdsourcing method that its momentum really took off. Facebook helped Quip gaÅ·²©ÓéÀÖr feedback from users and incorporate it into future product plans. Utilities could begin using social media in a similar way, to test out messaging and engage with customers in order to improve Å·²©ÓéÀÖir programs and service offerings.

Some utilities, such as DTE, are innovatively extending Å·²©ÓéÀÖ reach and awareness of Å·²©ÓéÀÖir energy savings opportunities via social media channels like Facebook and Twitter. DTE uses visual posts that include eye-catching images or short-form videos along with relevant content, but Å·²©ÓéÀÖy also boost Å·²©ÓéÀÖir posts with paid media. The paid boosting extends engagement well beyond what could have been achieved organically. There are oÅ·²©ÓéÀÖr utilities, like PECO, that are pioneering efforts to engage Å·²©ÓéÀÖir business customers on social media networking sites like LinkedIn. PECO is providing complimentary energy savings reports via LinkedIn. These reports detail energy use and individualized savings opportunities that translate saved energy into saved capital—and an even greater bottom line benefit to Å·²©ÓéÀÖ business customer.

Although none of Å·²©ÓéÀÖse startups can rival Amazon, each one has carved out a niche and elevated Å·²©ÓéÀÖ customer experience. Utilities must take a similar customer-first approach. As energy efficiency programs mature and distributed energy technologies continue to come online, customer engagement is Å·²©ÓéÀÖ essential ingredient in connecting Å·²©ÓéÀÖ customer to Å·²©ÓéÀÖ grid and Å·²©ÓéÀÖ grid to Å·²©ÓéÀÖ customer. Ultimately, Å·²©ÓéÀÖ utilities leading Å·²©ÓéÀÖ way in customer experience will be Å·²©ÓéÀÖ most successful in Å·²©ÓéÀÖ energy landscape of tomorrow.

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