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Off Peak

Fortnightly Magazine - January 15 2001

Off Peak

January 15, 2001

Warm Mouse, Cold Feet


Is your website what's keeping browsers from signing up online?

Despite the industry's increasing focus on e-commerce, it appears that the websites of many energy service providers (ESPs) remain no more than slick marketing pieces, with little true customer interaction taking place. The problem might be as simple as the website's lack of a clear security statement, but it reveals volumes about the way ESPs are approaching competition.

A recent survey of European and U.S. households found that although 75 percent of respondents were interested in using the Internet to switch supplier online, 20 percent of energy site browsers ultimately chose to switch supplier offline. About half blamed their reluctance on an unwillingness to submit details online. Fifty percent of the U.S. respondents said they were unable to switch online at all because their supplier's website didn't have the capability, according to the survey by Datamonitor, a UK-based marketing analysis firm.

Fred Abrew, chairman of e-business consulting firm Energy and former CEO of Equitable Resources, says that in the United States, the ESP's site capabilities usually reflect its business plan.

"If their business plan is to grow the business by capturing additional market share, then those sites tend to be more aggressive than sites that are just meant to maintain status quo" by converting existing utility customers into customers of the utility's energy service affiliate. The line will blur, however, as Internet-savvy consumers demand that all ESPs enable online transactions, he adds.

Clearly, for ESPs to cultivate online relationships with customers, their websites must offer such basics as security assurances and clear directions for conducting online transactions. But Abrew insists that energy suppliers are missing opportunities unless they have a complete range of options for online business.

For instance, he says, "I know in my own personal case, I switched suppliers not so much for the savings, but because when I pay my bill I get frequent flier miles because I use my credit card. It's just more incentive, and I think utilities, at this point, have not thought through the value of the credit card payment scheme because they see it as a cost as opposed to a customer retention opportunity."

Above all, the ESP must identify the options that targeted consumer groups view as most beneficial to them, whether it be the ability to pay by credit card, price savings, or an offering that bundles phone service with the commodity.

Rural electric cooperatives have emerged as the industry leaders in creating benefits that draw repeat visitors, according to Abrew. The reason: Co-ops are simply meeting their primary goal of serving customer-owners with the information they want. In addition to information about energy service, these sites may list little league game schedules, want ads, or exchanges whereby a farming customer might trade extra bales of hay for feed supplies.

Says Abrew, "Once a company [commits to communicating online with customers], then all the other stuff tends to fall in place because now your whole line of thinking has changed rather