The race is on to transform the utility customer journey
- December 21, 2018
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Leading customer experience organizations such as Amazon and Netflix have redefined the customer journey, raising the bar significantly, and utilities are now racing to catch up. In a recent PA Consulting Utility Customer Experience Insights Study, top utilities graded their customer capability maturity as 2.5 on a 4.0 scale. However, most reported plans to evolve towards the 4.0 level within three years.
You might ask – why?
- Alternative sources of energy are changing the utility business model; and
- Journeys are being shaped by experiences in other sectors.
These changes are putting customers in control of their energy purchases.
Technological advances and regulatory changes have paved the way towards energy alternatives. Rooftop solar installations has experienced an annual average growth rate of 54% in the US over the past 10 years. The price of residential rooftop solar has decreased from $40,000 to $17,000 for the typical house over the past eight years, about $3,000 per kW installed. According to NREL, the price per kW installed for residential solar PV could be as low as $2,000 per kW by 2020. Behind the meter storage systems that can provide renewable power when the sun is not shining are being marketed by companies like Tesla and Sunrun. Third-party applications to control home thermostats, measure usage and control appliances in real time are being downloaded for free. Customer-owned rooftop solar, especially combined with some form of battery storage and a smart home app can put individual customers in competition with the utility.
Regulators and other policy makers are also encouraging a more competitive marketplace. Senate Bill 100, recently passed in California, updated the Renewable Portfolio Standard and requires retail electricity to be carbon-free by 2045. In addition, Hawaii has already established a state policy for 100% renewable energy resources. Much of the replacement energy is expected to come from customer- or community-owned solar systems, which could have a significant impact on the traditional utility business model.
The utility’s network of transmission and distribution facilities will continue to deliver energy providing the utility a critical role in the lives of many people. Utilities realize that typical digital journeys in other sectors are have become table stakes for both improving customer relations, reducing costs and facilitating rapid design and delivery of new products and services.
How are utilities preparing?
We have observed several trends as utilities redeploy resources to transform their customers’ journey.
- Self-service: Taking a cue from Amazon and Netflix, utilities are making broad investments in self-service capabilities, customer-facing mobile tools and apps, and optimizing and enhancing billing & payment guided by a customer-centric culture.
- Meter to cash: Data analytics is employed to recover revenue where possible, and utilities are starting to view uncollected revenue more often as a cost of doing business than a significant challenge.
- Customer service channels: Next generation customer experience is becoming critical. Utilities are utilizing omni-channel communications and self-service, contact center analytics, new customer satisfaction measures, and artificial intelligence / machine learning to interact with customers via their preferred channels.
- Field operations: Call-ahead job confirmation, routing optimization, remote disconnect / reconnect capabilities, and other means to eliminate wasted truck rolls and improve customer field service efficiency are also leading to increased customer satisfaction.
- Data analytics: Effective use of customer data analytics is becoming critically important to customizing communications.
- New products: Utilities are making rapid gains in their ability to effectively and quickly develop and deliver new products, services, programs and solutions over the coming years.
- Foundational capabilities: New measures, systems and tools and communication channels are being implemented to support the design and delivery of a Customer 4.0 experience.
Utilities grading themselves 2.5 on the scale did so due to the level of satisfaction their customers had with basic self-service options delivered through a phone voice response system and/or largely unintegrated website. Often new products were introduced mainly in response to regulatory requirements. The utilities that want to move toward a 4.0 on the scale will provide their customers with omni-channel offerings, seamlessly integrated and measured across all virtual and human contact points.
Authored by Wayne Lafferty & Diana Lai - Customer Experience Experts at PA Consulting