|Title:||United States survey percentages of consumers regarding expectations from premium electricity service by factor including whether consumer would pay a premium for them in 2012|
|Source:||Public Utilities Fortnightly|
Start of full article - but without data
CONSUMER EXPECTATIONS AND PREMIUM SERVICES
Which of the following products/services would you expect a
"premium electricity service" to include?
Would you be willing to pay a premium for your electricity
in order to receive these additional products/services?
Total U.S. Yes, certainly/ probably XX%
No, certainly/ probably not XX%
Base: Afi U.S. respondents
Greater mix of renewable energy sources XX%
Personalized energy reports and tools that help me to understand and manage my electricity usage XX%
Availability of home energy generation products XX%
Availability of additional programs and technologies to understand and manage my electricity usage XX%
Multiple billing and payment options XX%
Improved service priority XX%
Access to a personal energy advisor XX%
Base: Consumers who say they would "certainly" or "probably' pay a
premium for electricity in order to receive these additional
Note: Table made from bar graph.
For today's utilities, the only constant is change. We're in the midst of a significant transformation in the energy marketplace, and the shifting landscape increasingly is defined by the values and preferences of the new energy consumer. Energy providers face a confluence of consumer preferences, increasing technology innovation, shifting regulatory trends and the entrance of new market players looking to stake a claim as the energy value chain extends into the home. At the same time, economic challenges in recent years have driven an increased focus on the bottom line for utilities and consumers alike. Within this environment, many energy providers are being challenged to rethink their role in consumers' lives, their strategies for customer operations and, more broadly, their position in the energy marketplace. In light of the pressure to maintain or reduce operating costs, providers are in the position of having to do more with less.
The findings of recent consumer research indicate that energy providers have an opportunity to take a new approach to customer operations. (See Actionable Insights for the New Energy Customer, Accenture, 2012.) (X) This approach balances a range of strategic imperatives to reduce operational costs, enhance revenue potential, improve customer satisfaction, and deliver on demand-side management goals.
To that end, providers can focus on four critical areas of opportunity: building the relationship, changing the interaction mix, creating choice and extending the energy ecosystem.
Build the Relationship
In competitive and noncompetitive markets alike, customer satisfaction, engagement, and loyalty are complex and closely intertwined. As energy providers approach the challenges of the evolving marketplace, engaging the consumer becomes an increasingly important enabler of success. Key trends--such as smart metering, value-added products and services, and energy conservation--demand greater levels of engagement, consumer insight and understanding.
However, for energy providers, there are limited opportunities to directly engage consumers. In Accenture's study, U.S. consumers indicate that, on average, they interact with a representative of their electricity provider only seven minutes per year. Interestingly, XX percent of respondents said they had no interactions with a representative of their provider in the past year (see Figure X).
For energy providers, the limited amount of direct interaction is a significant challenge when it comes to trying to introduce new products and service, educate customers about energy conservation, or engage them in smart metering initiatives. (See Figure X.) In fact, Accenture's 2010 consumer survey found that while XX percent of U.S. consumers would instinctively turn to their energy provider to receive programs to optimize their consumption, only XX percent are aware of specific utility programs that enable them to do so. (See Understanding Consumer Preferences in Energy Efficiency, Accenture, 2010.)
The 2012 study, Actionable Insights for the New Energy Consumer also found that churn in competitive markets and customer satisfaction in all markets are negatively correlated to the volume of interaction consumers have with their providers. This highlights that energy providers typically have a low-value relationship with consumers and regardless of amount of interaction, there's minimal or even a negative impact on consumer satisfaction and sentiment.
To engage consumers, providers should develop operational and customer insights that enable an evolution beyond a one-size-fits-all service model. At the same time, providers can find new ways to build relationships, extending the set of experiences beyond traditional transactions such as address changes, bill questions or payment inquiries. Social media, online energy games and home energy management capabilities are creating new and value-added avenues for engagement.
Looking specifically at deregulated markets, it's clear that effectively engaging consumers also relies on taking a more targeted approach in understanding and delivering against consumer values and preferences. Our study found that the primary driver of customer churn is, not surprisingly, cost savings; XX percent of consumers in deregulated markets in the United States report that a reduced electricity bill is a main factor that motivates them to switch providers. However, price isn't the only factor consumers consider. Among survey respondents, customization is another consideration, with XX percent of consumers indicating they'd be motivated to switch providers for a rate plan that better suits their individual needs. Better service and support, renewable energy options, and tailored product and service bundles also are enticing for more than one-third of survey respondents (see Figure X).
It's increasingly clear that there's no typical energy consumer, and when creating strategies for the future, providers will require targeted approaches. Younger consumers provide a clear case study in this respect. In the survey, Canadian consumers in the XX- to XX-year age range averaged two minutes more of provider interaction per year; younger U.S. consumers averaged one minute more. While those figures might sound insignificant, they can have a measurable impact on operational costs.
Meanwhile, younger consumers also are more active on social media, and they express significantly higher interest in interacting with their energy provider through this channel. In Canada, more than half of XX- to XX-year-olds (XX percent) reported that they currently use or plan to use social media to discuss or learn about energy-related issues with other consumers or groups. One-third of respondents in this age segment report that they already interact, or plan to interact with their electricity provider via social media.
Even so, providers shouldn't assume that online channels alone will address the needs of younger consumers. In Accenture's survey, XX- to XX-year-old respondents have a higher preference than other age groups for high-touch channels, such as in-person or over the phone, for learning about new energy packages and home services.
Young consumers' unique preferences and behaviors serve as an example of the need for energy providers to build targeted approaches to engaging and serving consumers. In the past, a uniform approach might have been an effective way to manage operational costs and standardize operations. However, when it comes to energy, consumer values and preferences are increasingly diverse, and in order to balance strategic imperatives moving forward, providers will need to develop equally diverse service tactics and cost-effectively deliver them at scale.
Utilities can take several steps to better understand consumers' motivations and needs.
* Establish tools and processes for identifying and understanding the root cause of customer interactions and the resulting impacts on satisfaction and, in deregulated markets, churn;
* Implement a quality and performance management capability across the consumer organization to transform insights into action, and to continually measure and improve delivery performance; and
* Leverage segmentation to develop targeted acquisition, service, and churn tactics to address the values of specific customer groups. Verify that the strategies and tactics balance cost to serve while meeting consumers on their terms.
Change the Interaction Mix
Consumers' changing preferences are leading to a more complex relationship with their energy providers. Looking across the spectrum of interactions, the latest data show that energy providers have an opportunity to fundamentally redefine the traditional interaction mix. Based on this research, about XX percent of consumer-energy provider interactions are suited to more personal, higher-touch channels, while the other XX percent can be managed effectively in a low-touch, relatively low-cost manner. For many providers, the current mix of interactions is the inverse.
The research also suggests that consumer preferences have hit a tipping point where Web-based channels are now preferred for most interactions across the customer life cycle. More than half of consumers prefer to perform high-volume interactions, such as receiving bills, paying bills, or preparing to move to a new home, through Web-enabled channels (see Figure X).
While the research shows that consumers largely prefer self-serve channels, many providers don't enjoy the levels of adoption that the data shows might be possible. Experience and research suggest that targeting electronic billing and payments can be an effective first step toward building a self-serve relationship. In the study, consumers expressed the highest interest in using Web-enabled channels for receiving the bill (XX percent) and paying the bill (XX percent). Providers can leverage paperless billing and electronic payments as a gateway to increase levels of Web self-service. Campaigns with tailored messaging targeting these interactions--engaging consumers where they're already comfortable with self-service--can initiate the Web-based relationship and nurture additional online interactions.
The research also indicates that across the factors consumers consider important related to self-service, they tend to want it all. More than XX percent of consumers consider each of the following factors important when choosing to use self-service--privacy, efficiency, simplicity, technical support, speed, value-added tools, and convenience.
In the past, providers have developed self-service capabilities with a focus on speed and efficiency. While responsiveness remains important, consumers highly value the relevance of the experience. As technology limitations continually diminish, the key question becomes not just what's possible, but rather what's meaningful and valuable to consumers.
It's important to note that changing the interaction mix isn't simply about shifting consumers toward self-service. When redefining the interaction mix, energy providers will also need to focus on higher-touch and even in-person engagement for specific events. In the study, XX percent of consumers reported that they prefer the telephone for resolving issues, and in competitive markets, XX percent prefer the phone for switching providers. For providers that move beyond the meter, the channel mix becomes increasingly complex; the previous study found that XX percent of consumers prefer interacting with a staff member when purchasing energy-efficiency products. (X)
The importance of in-person interaction for particular events has led to unique partnerships in some markets around the world. For example, white-labeling partnerships, whereby a utility collaborates with a consumer retailer to sell energy under the consumer retailer's brand, have been successful in a number of competitive European markets. The partnership model extends the reach of the utility, provides a physical sales network and in some cases creates benefits in terms of satisfaction and churn reduction if the consumer retailer has a stronger brand.
When it comes to Web interaction, it isn't just about self-service, it's also about engagement. As previously mentioned, the study shows that social media has emerged as a potential channel for engagement, especially among younger consumers. In the United States, XX percent--and in Canada XX percent--of XX- to XX-year-olds use social media, or plan to use it in the next year, to interact with their energy providers. While interest lags for older consumers, this still represents a sharp rise compared to the 2010 survey, in which only X percent of consumers opted for using social media to get customized advice on the best electricity management programs for their own situation. (X)
The research findings also highlight that one-way interaction through social media isn't enough. The top factor that would encourage consumers to engage with their providers through this channel: receiving quick, convenient service via social media. Analysis suggests that social media is a viable channel for some consumers--and that providers need dynamic new approaches to respond to growing interest.