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E-Marketing: Is Energy Missing the Net?

Fortnightly Magazine - March 15 2000

their appropriateness for the product being offered, the ability of the customer to actually purchase the product of choice over the Web, the logistical process of delivering the purchased product, and the ability of the site to encourage an ongoing relationship with the customer.

The study found that "senior executives of [energy and utility] players have expended little effort to clearly define where an e-commerce strategy fits into an organization's overall game plan." In many cases, websites offered little to attract consumers and, beyond that, nothing that would give Wall Street a perspective on how the company will maintain or increase its revenue stream.

Dar says that poor energy company websites give competitors an opportunity to make inroads in the business without much resistance.

"The gas and electric industry has the largest customer base of any industry, and yet it seems that it is about to lose this customer base through sheer absent-mindedness," he says.

The problem, in Dar's view, is not that utility executives don't know that the Web exists; rather they don't appreciate how quickly the transition to e-commerce is taking place. He notes that in the past, deliberate due process was the key to success in the utility industry. "The system prized taking its time to reach a decision, communicating a decision and implementing a decision," he says. "The company that was the slowest often won."

The Internet has reversed that. "The 'Net basically says that the person in first with an imperfect product and an imperfect business model will end up beating the person who takes another six months to come up with a perfect product and a perfect business model," Dar says.

"Getting things done quickly, learning, changing and adapting are basically the core business processes of the Internet. That is exactly opposite the business processes that have been enshrined into the utility industry."

One reason behind the problem is that energy industry executives and managers have been much slower to adopt use of the Internet for personal and business transactions.

"A CEO says his customers surely cannot be that Internet-sophisticated," Dar says. "When you examine his customer base, his customer base is far more sophisticated about the Internet than his executive team."

Forrester's Lief says that energy companies are extraordinarily concerned about how they will fit into the Internet.

"They are aware that they don't have a great skill set to deal with it," she says. "They are not marketers. That's the biggest issue." In many cases, it may be difficult for them to become marketers. "Marketers tend to go to a place where marketing is paramount, like Procter & Gambel or an advertising agency. That is not the case in the energy companies, and that is going to be an issue." The energy industry marketer can find it hard to act because of a limited budget and uncertain corporate commitment.

Energy companies have three choices with regard to the Web, according to Dar.

First, they can embrace e-marketing. "This will require completely reorganizing their organizations, their culture and their approach to things," he says. "In