5 takeaways from IDC’s new report on the customer engagement gap


In liberalized markets, energy retailers compete aggressively for customers — especially those who are likely to use more energy services. What’s the best way to get an edge over the competition? More and more, retailers are choosing to differentiate themselves by offering a more satisfying customer experience. In a new report, the market research firm IDC pulsed 75 executives in Europe and Australia to check in on their progress. How are energy retailers in the world’s most competitive markets approaching customer engagement? What are their goals? Which capabilities are they pursuing first? And critically, how are they using IT to create better experiences, faster? The topline finding is that energy retailers see a big gap between the customer engagement capabilities they have and the ones they need. Almost universally, executives cited the need for new software to keep pace with customer expectations. 

1. The capabilities gap is universal

IDC asked executives to evaluate 15 different customer engagement capabilities — things like digital transactions, segmentation, and targeted marketing. Across the board, respondents expressed skepticism about their ability to deliver. Fewer than 30% said they were very confident in any of the 15 capabilities, and less than 10% said they were very confident in most. The widest gaps were in the capabilities executives said they need most: customer analytics and cross-channel consistency. 

2. Closing the gap requires new technology

On their own, most customer information systems can’t offer the capabilities retailers need. IDC found that 84% of executives are planning to invest in new customer engagement systems — like business intelligence software, billing and rates engines, and call center tools — within the next three years.


3. Executives favor cloud software

Historically, energy retailers have relied on on-premise IT systems to engage customers and manage data. That’s meant long upgrade cycles, expensive customization, and a customer experience that’s falling behind what most other industries offer. Today, retailers are moving toward software that prioritizes speed and flexibility. IDC reports that 68% of executives are using or plan to use software-as-a-service (SaaS) going forward. “As they increasingly move away from traditional IT models to take advantage of the elasticity of cloud-based solutions,” the firm notes, “retailers will find themselves more able to dive into advanced customer engagement capabilities.” Oracle and Navigant discovered the same trend earlier this year.

4. Analytics are an imperative

In 2016, the best way to get customers’ attention is by showing them information that’s helpful, relevant, and makes their lives easier. Of course, that's easier said than done. Delivering targeted communications to millions of people requires careful segmentation, smart behavioral design, and above all, powerful data analytics. IDC says executives are ready to make the investment. A full 75% of survey respondents believe data analytics can be a competitive advantage. Marketing, contact center operations, load forecasting, and churn analysis were all cited as important applications.

Leading retailers catch customers’ attention by embedding personalized insights alongside the digital transactions that matter most — like online bill payment.

5. Retailers have different goals for digital

In regulated and competitive markets alike, utilities are making a big push to get customers onto digital channels. Households that engage online show higher trust, satisfaction, program participation, and net promoter scores than those that don’t. They’re also less expensive to serve. While retailers are united in their pursuit of digitization, they’re split in their objectives. When IDC asked executives to name their number one goal for their website, 41% said increasing digital transactions, 29% said providing a better web experience, and 15% said marketing more effectively.


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