European utilities are at a crossroads. In the wake of new climate targets and new risks to Europe’s energy supply, the price of power is on the rise. But European energy prices are already among the highest in the world, and customers are reluctant to pay more.
In fact, many think their utilities should be delivering more for less. As other industries like finance, telecommunications, and entertainment have embraced digital services and personalization, customers’ expectations have changed — and right now, utilities are struggling to keep up.
These challenges won’t be solved overnight. But by investing in a new, 21st-century customer engagement strategy, European utilities can start to turn their problems around — and into opportunities. Recently, Opower held an informational webinar to explore the path forward. In the webinar, John Webster (Vice President of Marketing & Strategy, EMEA at Opower), Stuart Neumann (Director of Advisory Services at Verdantix), and Karel Beckman (Editor-in-Chief of Energy Post) took a deep dive into four proven customer engagement strategies that have already helped utilities around the world start achieving their business objectives.
It’s no secret: utilities have traditionally had trust issues with their customers. In 2013, just 24 percent of people worldwide trusted their energy provider to deliver sound energy management advice, according to Accenture. Customer trust improved this year — but only to 37 percent. How can utilities accelerate that trend, and keep building stronger relationships with their customers? By engaging them. New Zealand’s Mercury Energy offers a compelling case study. To boost customer sentiment, Mercury started offering customers personalized feedback on their energy usage, automated billing alerts, and easy-to-understand savings advice. They called it the Good Energy Monitor (GEM) program.
And since it launched, Mercury has unlocked broad business value in vital areas. Email open rates and customer sentiment are up, call volumes are down, and Mercury is getting better results from its marketing spend. Moreover, Mercury is also seeing gains in demand side management. Customers are shaving demand off peak and improving their energy efficiency.
Today, consumers expect their utilities to effectively communicate over digital channels, including email, web, and social media. And that’s especially true for millennials. The good news is that by delivering the digital messages customers want — among them outage and high bill alerts, savings advice, and demand response incentives — utilities won’t just improve customer satisfaction. They’ll also reduce their cost to serve. But in spite of the well documented importance of online engagement, a large number of utilities still lag behind in adopting digital technologies.
The top 20% of utilities (in online traffic) average 17 more hits per 100 customers than the bottom 20% of utilities (Source: Booz Allen Hamilton).
E.ON UK is not one of them. The utility, which was recently named the European Cleantech Corporation of the Year, is a shining example of an energy provider that’s bucking trends, embracing digital channels, and achieving its business goals. Case in point: when E.ON UK launched a world-class energy management web portal last year — offering neighbor comparisons, usage patterns, and personalized efficiency advice to 5 million customers — they doubled their online traffic in just 3 weeks. And their customers thanked them for it.
Personalization is the key to motivating utility customers to act — to save energy, to participate in new programs, or even just to open emails. But successful, personalized communications only work if you understand your customers. That’s why utilities are investing in segmentation — discovering who every one of their customers are, then tailoring programs and messaging that specifically to them. Most utility segmentation strategies to date have divided customers by age, income, and household occupancy levels. But demographic information like this has limits. Taking segmentation to the next level means going beyond demographic variables alone, and incorporating data insights from actual customer behavior. ComEd is one of a growing number of utilities is making the right investments in technology, analytics, and operations to master that approach.
ComEd is enhancing customer experience by using analytics to segment the population into different groups. As a result, customers will receive communications and messaging that is better tailored and personalized to their profiles and interests. (Source: ComEd)
In every outbound communication, llinois’s largest utility is working to ensure that every customer is receiving the right message for the right moment. As a result, call volume is falling, customer trust is improving, and more people are opting into ComEd’s programs.
It almost goes without saying, but customers are often more willing to participate in utility programs when there’s something in it for them. Industry leaders like Baltimore Gas & Electric know that fact well. Last month, BGE celebrated $2 billion in customer bill savings catalyzed by their Smart Energy Savers Program, which includes Behavioral Demand Response (BDR) — a tool to manage peak energy demand by providing valuable, real-time energy analysis at scale to customers with smart meters.
Last summer, in partnership with Opower, BGE sent over 3.2 million BDR communications over email, text message, and paper reports. The initial results were remarkable: BGE communicated with 315,000 customers before and after peak events, and their customers earned more than $7 million in rewards for saving energy. The success continued this year. During a peak event in early September, three-fourths of eligible BGE customers participated in the program, cumulatively saving $2.4 million in a single day alone. Now similar approaches are being deployed across the United States, benefitting utilities and customers alike.