(August 2011) Economic consultant Michael Rosenzweig challenges Constantine Gonatas’s proposal for ensuring FERC’s demand response rulemaking achieves its objectives. Also, Juliet Shavit...
The Case for Customer Centricity
Understanding consumer preferences in energy efficiency.
is, it depends. Just as consumer behaviors and values vary, so do their preferences on communication and service channels. In fact, there are diverse moments of truth—and energy providers should approach these touchpoints strategically.
In the survey, 37 percent of respondents indicated they consider it most convenient to learn about electricity management programs when they receive their bills. Meanwhile, only 11 percent more participants indicated they would prefer to receive customized advice on electricity conservation online rather than through in-home consultation ( i.e., 33 percent compared to 22 percent). Although 37 percent of participants claimed they would like to sign up for a program online, 20 percent reported that they would prefer to do so through the in-person, at-home channel—perhaps because of the relatively complex, personal nature of such programs.
The survey findings also suggest the potential importance of peer pressure in reaching consumers and influencing their behaviors. As with the movement against littering, social signals can have a significant impact on uptake of energy efficiency and conservation programs and practices. However, social signals alone won’t drive widespread adoption of electricity management programs. Energy providers also must develop marketing plans that combine push tactics—which create demand by selling directly to consumers—with pull tactics—which are designed to make consumers ask for the program they are being enticed to purchase.
Ultimately, the challenge in reaching consumers is to build an operational model that puts sales—rather than service—at its center. That change is a tall order, requiring energy providers to evolve personnel, systems, and business processes. However, such transformation is essential to delivering a new consumer experience (see Figure 3) .
Because energy efficiency and conservation programs aren’t commodities, traditional go-to-market approaches aren’t appropriate for the broad range and various combinations of these products and services. Continuing to approach customer interactions reactively is a recipe for failure. To succeed, providers need to strengthen trust, create tailored offerings, and continually address consumer needs throughout the product and service life cycle.
When it comes to trust, utilities and electricity providers have much room to improve. Only 29 percent of respondents indicated that they trust energy providers to inform them about actions to optimize their electricity consumption. By contrast, 53 percent of respondents said they trust environmental associations, and nearly as many ( i.e., 51 percent) trust academics, schools, and scientific associations. To build greater trust, energy providers need to offer greater transparency and increase interactions—social media may prove to be valuable tools. Equally important, though, is aligning products and services to consumer needs, preferences, and values—and addressing those factors from product creation through retirement.
In the end, the energy providers that succeed will be the ones that redefine their customer operations—building capabilities that support consumer centricity in every business process and customer interaction.
Call to Action
No matter the strategy or approach to managing demand, all energy providers face one fundamental task: They must get to know their consumers. Across business models and regulatory frameworks, realizing the full potential of smart metering benefits requires a new core competence in consumer energy support. A consumer-centric approach