Customer backlash over dynamic pricing and the smart-grid caught the industry unprepared. CIOs and top customer specialists share their strategies for engagement and attaining consumer...
Bringing Customers On Board, part II
The entire utility-consumer relationship must be reengineered.
relationship. Is a paradigm shift needed? Is the platform burning?
The answer is yes.
With disruptive technologies comes a need for disruptive change management—non-incremental change to utility processes, strategies, and external interactions. And “interaction” is a two-way process, unlike the one-way approach to which utilities are accustomed.
There never has been a better time to reach out and engage consumers. While some suggestions might be considered radical by some and novel to others, they demonstrate new approaches to address consumer adoption issues that were recognized years ago by AMI early-adopters and continue to be some of the most important challenges facing utilities today.
Experience from the past year reveals three obstacles that stand in the way of the smart metering model—three obstacles that could prevent utilities from bringing customers truly on board: A) careless disregard of real customer concerns about privacy and security; B) naiveté in the conduct of field trials and pilot programs; and C) lack of face-to-face interaction between utility and customer—the sort of word-of-mouth communication that must occur if smart meters are ever to go viral and become entrenched in our consumer consciousness.
• Security and Privacy : Whether right or wrong, fair or unfair, there’s a lot of chatter about the utility becoming a Big Brother type of entity. One can see this fear readily through media coverage and the activities of consumer advocacy groups.
This fear remains largely a misperception, however, that utilities will make use of end-use consumption data to pass judgement on consumers—to classify them, stereotype them, and perhaps even use this information in ways not morally or legally acceptable. In fact, utilities aren’t unlike other public and private organizations subject to data privacy and protection regulations.
Modernization of our financial, healthcare, and retail sectors—intimately linked to the management of personal consumption data—have taught the need for rules to govern how that data can be used and how it must be protected. Banks are entrusted to provide overdraft protection, automatic direct deposit, and automated bill payment. Credit card companies can identify retail spending patterns both by category and by location—and have the ability to reach out to cardholders if they observe unusual patterns deviating from the norm. Supermarkets use tailored online and point-of-sale coupons to be better aligned with the buying habits and personal needs of their customers. Most consumers expect their return on value to be increased, otherwise they might take their business somewhere else.
Likewise, utilities likely will use energy consumption data to improve services that most customers and lawmakers would consider valuable and acceptable. But in general, utilities are less concerned about why the consumer is using the energy, than about how much, and when energy is being consumed, because it’s directly linked to energy generation and distribution costs.
Nevertheless, perception is often more important than reality. Utilities shouldn’t simply skirt concerns about security and privacy. They must confront them head-on, with focus and clarity.
• Field Trials and Pilot Programs : Technology field pilots are fairly common among utilities implementing AMI and smart-grid technologies. Field pilots were considered essential