Utilities and the customer capabilities gap-still a reality

A Navigant survey shows that utility executives are still not confident in their utility’s abilities to cater for their customers’ complex demands.
Published: Thu 09 Jun 2016

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Utilities today are faced with a number of challenges including regulatory disruption, stagnant load growth, financial pressures, and competition from other third-party service providers. In addition to this, their customers’ expectations of their electricity providers are growing increasingly complex as a result of their experiences with other industries like telecommunications, banking and online retail which have taken customer engagement to the next level.  These industries are delivering a more digitally engaged service and customers expect a service experience that is on par with the advanced support now offered by these. Websites with sophisticated self-service capabilities, mobile applications, and online chat support are only a few of the engagement channels that are now considered by customers to be standard.

In a new white paper, Navigant Research looks at the changing dynamic between customers and their utilities. The paper’s findings are based on a study conducted in February and March in which nearly 100 utilities executives from the US were questioned on customer engagement.

Little confidence in customer engagement capabilities

According to the report, “Utility executives do not feel their current capabilities are able to deliver what they consider to be top customer engagement capabilities, such as having a single 360 degree view of the customer, the ability to send proactive alerts and notifications, enabling customer service representatives (CSRs) with analytics (Next Best Action), and their ability to provide effective self-serve options (Digital Transactions).”

Although the majority of executives understand the move toward greater customer engagement, very few felt confident about their utility’s ability to meet their customers’ changing demands. As a part of the study, executives were asked to rank 15 categories of customer engagement capabilities in order of importance and were then asked about their confidence levels related to their utility’s ability to perform each. Even for the capabilities that respondents felt were “very” or “of utmost importance” to their overall customer journey, fewer than two in five were “very confident” in their utility’s abilities. In fact, their vote of confidence in current capabilities ranged from only 6% to 24%.

Utilities recognise the engagement gap

In response to this disconnect that exists between the utility and its customers, utilities are increasingly turning their backs on traditional IT delivery models (i.e. building and maintaining solutions themselves) and moving toward third-party software as a service (SaaS) providers to enhance or add new customer engagement capabilities. Nearly 60% of survey respondents indicated that they prefer buying new solutions to building and, notably, 76% said they are either using or are interested in using cloud-based or SaaS solutions.

The study also suggests that while customer information systems (CISs) continue to remain central and a priority in customer reference architecture, more executives are exploring a move toward a more federated, services-based architecture that enables greater customer experience via agile edge capabilities that surround the CIS.

This surround strategy accomplishes a few objectives:

  • CIS continues to be the system of record for many critical customer data elements and can remain fixed for longer periods

  • Digital transactions and omni-channel management can continue to evolve without needing to replace core CIS

  • Allows contact centres to organize data and transactional screens that accelerate contact resolution (i.e. provides ways for CSRs to have a single view of customers in one place, proposes next best action, reveals propensities based on analytics, etc.)

Don’t overlook experience

Utilities have come a long way. The first step towards improving customer engagement is recognising the need for improving it and it seems as if most have done this. Most realise that their largest capability gap is their access to customer information — in particular to improve contact centre call handling and marketing effectiveness.

However, their biggest struggle, according to the report, is attaining value from their customer data. To improve internal decision-making and to provide value to customers, utilities need to find innovative ways in which to reach their customers. This is where utilities need to employ the services of experienced service providers that can take their customer engagement to the next level. These service providers often work with other industries that have been forced to change their engagement strategies in response to a highly competitive climate.

Why reinvent the wheel when there is much to be learned from experience?


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