InsightaaS.com perspective: The broad adoption of consumer technologies is requiring accommodation by all industries, including the heavily regulated utility sector. Accenture’s study of consumer demand for technology solutions that enable new levels of energy service is an especially telling example of the phenomenal rise of mobile behaviour and its application to most areas of social and economic life. Despite the virtual monopoly position that they currently command in their respective jurisdictions, utilities are beginning to pay heed to consumer calls for an improved, technology-enabled customer service experience. Driven by interest in the productivity and cost savings that mobile and other digital technology solutions may provide, utilities are also having to contend with the entry of new players in an evolving energy-management ecosystem which are prepared to deliver the information and the convenience that tech-savvy consumers are now demanding. Interestingly, Accenture results show increased and roughly equivalent consumer desire for mobile and digital energy-management solutions across all age, education and socio-economic demographics - a finding that has interesting implications for the energy and technology provider alike.
Rising energy awareness, powered by mobile technologies, is creating new expectations on the part of consumers. Armed with smartphone devices and ‘an app for everything’, energy-conscious consumers are now looking for new levels of service from energy suppliers - or alternatively, from other providers who will step in with solutions offering insight into consumption patterns, prices and programming control. Over the past several years, a number of different players who can address growing interest in energy management technologies have emerged: the telco provider who bundles in apps with smartphone sales, the third-party energy broker, or the web-based app provider, such as Google or even Microsoft, which have developed energy monitoring solutions for consumers, are all contenders for positioning in this evolving ecosystem. A natural prospect would be the energy supplier which has unique purview over both energy information and customer relationships - but only if this group is willing to embrace new technologies to deliver on new customer service expectations.
The growing gap between consumer interests and provider services was highlighted recently in findings from Accenture’s fourth annual survey of energy consumers, conducted by the firm’s Global Customer Care Utility Innovation Centre, which houses a Vancouver-based team focused on research into best practice for utilities and energy consumer behaviours in 22 countries around the world. According to Accenture, the study has shown a clear disjuncture between customer experience expectations, service delivery and technology opportunity: while only a quarter of global energy consumers (19 percent of Canadian consumers) trust their utility to provide them the information they need to reduce their energy bill, overall global customer satisfaction levels fell from 59 percent in 2012 to 47 percent in 2013, and from 66 percent in Canada in 2012 to 52 percent in 2013. On the consumer interest side, 38 percent of global respondents (40 percent Canadian) said they would like to receive notifications about their energy usage on their mobile device, and 32 percent (40 per cent Canadian) said they want the ability to remotely control home appliances. And while 77 percent of respondents considered their utility’s ability to offer the latest, advanced technology to be important, only 60 percent rated their providers’ performance as good or excellent.
Is a 17% gap significant? Considering the relative youth of the mobile revolution and magnitude of the transformation required to migrate utility customers to new service platforms, a 60 percent approval rating may be quite good - assuming no other competition for this kind of service. But in measuring customer satisfaction, Accenture’s consumer energy researchers considered this metric from a broad angle, looking at satisfaction, loyalty and trust to ask what Greg Guthridge, Accenture’s Energy Consumer Services managing director called "opposite questions" that could test results: "we asked, for example, if someone came along with a better proposition for energy or home management, would you consider products and services from other providers?" Another issue for utility service providers is downward trending: according to Guthridge, satisfaction ratings have fallen for the fourth year in a row, as have trust and loyalty. "There’s not a lot of loyalty towards energy providers," he explained, "consumers see them as pretty middle of the road, and it’s interesting to see how many would consider switching."
So what is causing this dissatisfaction? Price, reliability and safety, the traditional top three causes in utility customer satisfaction research have also emerged at the top of the list in Accenture’s 2013 study: "pocketbook impact continues to be the most important," Guthridge explained. However, in the fourth top concern - a rating of the customer experience provided by the utility - Accenture has established a link with emerging (for utilities!) technology-based service options. What researchers found is that utilities are "drifting behind" what other types of providers are able to achieve in terms of customer experience. "Consumers don’t compare what they are getting from their local utility provider with what energy providers are offering in other jurisdictions: they compare their utility to what other home providers offer," Guthridge observed, and what they are looking for is ease of doing business, energy advice and simplified interaction with their supplier - service characteristics that may be more easily delivered though 24/7 mobile and digital technologies. According to Guthridge, "a pretty high percent" of respondents want mobile, digital and ‘set and forget’ technologies (77%), and at a very focused level, in seven out of nine customer service interactions, consumers would prefer to use mobile and digital channels over picking up the phone to call a traditional call centre. Gaps are increasing, Guthridge explained, between what the utilities and other industries provide in terms of tools, 24/7 support, energy visualization, personalization, digital capabilities and ‘set and forget’ technologies in particular.
For the utilities, the benefits of introducing digital and mobile technologies are the opportunity to reinvent customer experience, lower cost and increase customer satisfaction. So far, however, attempts to introduce these technologies have been piecemeal: utilities, Guthridge noted, "are pretty much the last bastion in terms of reliance on paper billing and the call centre as their main communication tool. And the call centres aren’t even open 24/7." Utilities pay a heavy price for lagging behind though. In a study titled The Economics of Dissatisfaction, Accenture has concluded that utilities currently devote 30 percent of the total operating costs in a utility customer organization to dealing with dissatisfaction. So what accounts for this lag? While in some regions of Canada, attractive energy pricing may disincent consumers from using energy management tools in a consistent fashion (thereby jeopardizing the success of a utility’s technology program, in other areas with high energy rates, price signals may be used with greater reliability to drive adoption of tools that can increase energy efficiency and conservation. In its research, Accenture focused elsewhere - on issues around convenience and consumer willingness (roughly a third of respondents) to pay a premium for ‘set and forget’ automation solutions. In other words, as Guthridge noted, "though pricing signals may not work perfectly for management of the commodity, there are other buyer values at play here, such as convenience."
So far, Accenture’s utility customers have been receptive to the basic message presented in this research - that technology-based customer service platforms and the ICT which lays at their foundation, including mobile, digital and "little data" analytics offer energy suppliers huge potential to reap the benefits of productivity savings associated with improved customer service. In Guthridge’s view, simplification of business processes, better understanding of those technologies that "will really move the needle," and recognition of the need for "more automation, movement to ‘set and forget’ technologies and to partnerships that enable more segmented and analytics-based data for differentiated, and choice-oriented customer experience - without incrementally increases in operating costs" is key to success for the regulated utility going forward. Will they bite?
For more information on additional survey results and Accenture conclusions, the New Energy Consumer Handbook may be accessed here.