Utilities Are Still Failing to Engage Effectively with the Consumer

Customer engagement forms a critical part of a utility’s strategy to attain energy efficiency. However, utilities continue to undervalue effective engagement with their customers.
Published: Tue 04 Mar 2014

In the past, communication between utilities and their customers were mostly about utility bills. Customer engagement was always perceived by the utility to be challenging and limited.

This is now changing with technological developments in the smart grid and broader digital economy. As industries, such as telecommunications, become digitized and offer customers improved service delivery, customers come to expect this from their utility. They are now beginning to expect increasingly better service and proactive engagement.

While the consumer stands to receive a more efficient service due to improved engagement, the utility also benefits. The deployment of more sophisticated customer engagement processes helps to drive energy efficiency-an increasingly critical market need for most utilities.

Customers unaware of energy efficiency programs

These technological advancements have given utilities new tools to meet this need for a deeper communication. Many utilities have embraced building a comprehensive consumer engagement strategy and have continued investing in new technology-enabled capabilities that allow for more effective customer communication.

They are also providing their customers with programs to help them manage their energy costs more efficiently. However, a consumer engagement study, undertaken by JD Power 2013, shows that a large percentage of customers are unaware of the programs available to them.

The Electric Utility Residential Customer Satisfaction Study shows that overall satisfaction is highest among customers who participate in one or more of their electric utility's offerings at 679 on a 1,000-point scale. Satisfaction declines to 642 among those who are aware of the offerings, but have chosen to not participate in them, and declines even further to 582 among those who are unaware of any offerings from their utility.

Customers were asked about their awareness of 29 various programs, products and services commonly offered by utilities. Study findings show that 19% of customers are not aware of any of the programs being offered by their utility provider. Electric utility company programs with the highest awareness rates are e-bill or electronic bill statements and payments (53%); in-home energy audit (28%); and awareness of rebates on Energy Star appliances (28%).

Among customers who are familiar with their utility's programs and services, the highest usage levels are for e-bill (43%); high-efficiency light bulb rebates/discounts (27%); and household electricity usage comparison tools (26%).

Variety is key

According to the study, only about a dozen utilities excel at offering their customers a wide variety of options. Variety is the key to reach the consumer since everyone has a preferred method of communication. The utility should tap into as many resources as possible. The more resources utilized, the further the utility’s message will travel.

Based on customer awareness, familiarity, and the impact of programs, the following are the most engaging programs offered by electric utilities currently:

  • E-bills

  • Level or equal pay plan

  • In-home energy audit

  • Rebates on smart appliances

  • High-efficiency light bulb rebates/discounts

The smartest utilities see consumer engagement and efficiency as complementary. By engaging customers with a deeper insight into energy consumption in a consistent, tailored manner, they will deliver portfolio-wide savings and an improved service that will deepen engagement and enhance customer satisfaction.

Further Reading:

JD Power-2013 Electric Utility Residential Customer Satisfaction Study