What utilities can learn from digital economy about customer engagement

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

Over the last 25 years, Amazon has disrupted the retail industry and transformed customer expectations around what a company could deliver. Convenience, inventory, and speed are at the core of the 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 the Amazon playbook and amplifying the customer experience through an authentic 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 J.D. Power Benchmark survey found that utilities delivered the lowest- performing digital experiences when compared to other consumer-facing services, there are positive signs of change in the utility sector. In fact, companies like Southern Maryland Electric Cooperative (SMECO), Con Edison, and others 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, there are lessons to be learned from younger, modern brands—and from each other.

Spotify: Deepen customer relationships through personalization and discovery

When Spotify initially launched in 2008, the idea of streaming music was straightforward. People wanted a platform that allowed them to access their favorite songs and artists in playlists, and Spotify’s product gave customers the opportunity to engage with music they wanted to hear, when they wanted to hear it.

But it wasn’t until the company introduced Spotify Discover in 2012 that the 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 they might also like.

More recently, Spotify has built on the success of its Discover feature with Daily Mixes, which gives users genre-specific playlists featuring their 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, the platform builds trust among listeners and engages them with consistent recommendations and interactions. These features, and more, have made Spotify one of the music industry’s top disruptors.

What can utilities learn from Spotify?

Tailoring offers, products, or services to customers based on their specific behaviors can prove to be an effective marketing approach. Utilities are relatively unique in that they know how much of their primary product is being consumed. But they can go further. Through the union of existing customer, usage, participation, weather, and occupancy data—along with more readily available digital footprint insights—utilities can learn more about their customers and their preferences. According to marketing consultant John Jantsch, 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 the user experience, utilities also must continue to meet customers where they 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 their homes and, with nearly one in four Americans using the voice assistant on their mobile phones daily, on their smart phones. ICF has developed tools to usher utilities into the 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 partnership between Uplight, Google, and Michigan Power (I&M) does just that by giving I&M customers the ability to ask voice assistants questions about their bill or service. Similarly, Bidgely and Energy Hub are connecting the needs of the customer to the grid through data-driven insights and home energy controls. But the possibilities are endless: through a voice app, utility customers can learn about their 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 the process in a variety of ways, starting with its tag line: “Instant Everything. Killer Prices. Big Heart.”

While the majority of millennials rent their apartments, fewer than half have invested in renter’s insurance because they don’t think they need it. Lemonade’s social media strategy is two-fold: reach its target demographic to educate them about the benefits of renter’s insurance. Then, give them 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 the 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 they’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 the customer experience.

It’s also important for utilities to share their knowledge with customers. When it comes to understanding the environmental impact of their energy use, many people don’t know where to begin. Utilities have a prime opportunity to educate their customers and provide them 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 their engagement in energy-efficient behaviors.

In an effort to educate its customers, Mass Save® offers a home-energy assessment as well as the option to take a free online home energy assessment. 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 the last time you bought a new toothbrush? According to the American Dental Association, that should be happening every three-to-four months. But the reality is that most of us delay that purchase because toothbrushes generally don’t bring us much pleasure.

Subscription-toothbrush startup Quip 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 the toothbrush itself, which was developed by dentists and designers to encourage better brushing. But it’s the 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 the company with recurring, consistent revenue and makes customers’ lives easier. While many electric toothbrushes can cost upwards of $100 or $200 (plus the 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 the heads alone).

What can utilities learn from Quip?

Many utility companies have been engaging with customers on social media for nearly a decade—using the platforms as a customer service portal. For others, it has provided an opportunity to craft a persona, with visual posts that can veer into cute puppy territory. But as utilities look to partner with customers on energy saving, social media can be used to further those messages and build deeper relationships.

For Quip, it was only after the brand began using social media, and Facebook in particular, as a crowdsourcing method that its momentum really took off. Facebook helped Quip gather 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 their programs and service offerings.

Some utilities, such as DTE, are innovatively extending the reach and awareness of their 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 they also boost their posts with paid media. The paid boosting extends engagement well beyond what could have been achieved organically. There are other utilities, like PECO, that are pioneering efforts to engage their 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 the business customer.

Although none of these startups can rival Amazon, each one has carved out a niche and elevated the 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 the essential ingredient in connecting the customer to the grid and the grid to the customer. Ultimately, the utilities leading the way in customer experience will be the most successful in the energy landscape of tomorrow.

The latest Energy news, explained.

Subscribe to get insights, commentary, and forecasts in your inbox.

File Under