What Is The Engaged Customer Worth To You?

Looking beyond today, the engaged customer represents the difference between extinction and survival of the utility business.
Published: Tue 03 Nov 2015

Utilities have  had well-publicised trust issues with their customers for many years. In 2013, just 24% of people worldwide trusted their energy provider to deliver sound energy management advice, according to Accenture. Customer trust grew to only 37% last year.

It’s clear that much improvement is needed.

But, how can utilities accelerate this growth and build even stronger relationships with their customers? By engaging them.

Utilities build the business case for customer engagement

One utility, New Zealand’s Mercury Energy — a leading retailer in one of the world’s most competitive energy markets, compiled a compelling case study around the improvement of customer engagement.

The utility partnered with Opower to deliver exceptional customer service during Moments that Matter-instances that are really important to a customer’s experience with the utility such as billing.  Mercury started offering customers personalized feedback on their energy consumption, automated billing alerts, and easy-to-understand savings advice. They called it the Good Energy Monitor (GEM) programme which was launched in March 2013 and powered by Opower. Through this programme, the utility has unlocked broad business value in a number of vital areas.

The impact has been remarkable. By giving customers the tools they need to understand and manage their bills, Mercury has reduced its high bill call volume- Year on year, call volumes are down almost 10% since the launch of the programme. Website traffic has increased by 50%. There has also been a major growth in “my account” registrations. Customers now have a credible reason to go online. It’s not only about paying your bills online any more. Now, customers can actually track and manage their consumption. Customers also have access to energy saving tips. Customers are saving on average 3% to 6% on energy consumption when compared to the previous year.

Mercury is also seeing gains in demand side management. Customers are shaving demand off peak and improving their energy efficiency. [How Energy Consumer Engagement Build Competitive Advantage.]

On average, energy providers in New Zealand have a customer churn of 21% but Mercury Energy brought this down to 19%. [Reducing Churn by Engaging More with the Customer.] It is clear that loyalty has increased. Customers who use Mercury’s web portal actively churn 10 percentage points less than those who don’t.

Figures are showing that customers view Mercury Energy as more innovative, easier to deal with, and more caring, amongst other positive attributes.

E.ON UK also made a radical change to its customer strategy in order to compete successfully in a dynamic retail market. E.ON embarked on a transformation of its customer strategy through redesigning its entire customer experience. By harnessing Big Data analytics and behavioural science, Opower’s platform has enabled E.ON UK to provide personalised advice and products to help customers control energy use and reduce their energy bill.

Built on Opower’s platform, the Saving Energy Toolkit has played a fundamental role in E.ON UK's customer engagement transformation and is delivered to residential customers. The online tool is built on Opower's platform and software-as-a-service solutions, which use Big Data and analytics, and behavioural science to enable E.ON UK to provide personalized advice and products to help customers control their energy use and help reduce their energy bill. E.ON UK collected signs of consumption reduction from engaged customers that use the Saving Energy Toolkit, with average savings of around 1.4%. Since it was launched in October 2013, one million E.ON UK residential customers have visited the Saving Energy Toolkit.

In 2013, E.ON’s entire brand was redefined with a clear re-focus on the customer experience. This was done by engaging customers more effectively and increasing customer loyalty, accelerating their existing digital strategy- providing information that was relevant to customers’ needs through the most convenient channels, and creating compelling customer experiences through the application of meter data analytics.

The entire digital transformation programme was very successful, and in 2014, showed the following statistics:

  •  Almost 30 million unique visitors to E.ON's website in 2014, double that of the previous year
  •  Over 10 million visits were via mobile devices
  •  Over 1 million visits to the iFAQ help pages
  •  Double the number of customers managing their accounts online
  •  A significant increase in online product switches
  •  Over 30,000 customers helped via social media
  •  Over 1 million customers signed up for E.ON Rewards

Helping customers understand and control their own energy use is core in E.ON UK's strategy and this will continue to be important as the rollout of smart meters progresses.

The road to the new energy customer

More than ever, consumers are seeking added value, personal connection and products and services that align with their lifestyles—all of which go beyond the traditional energy experience. And it would seem that consumers want to purchase new services and products from their utilities.

According to the Accenture report on the energy consumer in the new energy ecosystem, about 40% are planning to spend money on energy-related products and services, 41% of consumers  would consider purchasing solar products from their energy provider, 50% plan to sign up for connected home services in the next five years, 58% are interested in product and service bundles from energy providers, 50% or more prefer  digital channels for the majority of their interactions, and 70% no longer look for a traditional utility experience.

These figures are a clear indication that if utilities don’t engage better with their customers, they may lose out on a number of opportunities as well as lose their customers to utilities that are engaging better with customers and providing the services and products that customers expect from their energy provider.

Your competitors don’t look like you

New entrants are entering the market at a rapid rate and they don’t look like the traditional utility at all. They include, amongst others, software developers, car manufacturers and traditional retailers.

The new entrants take advantage of opportunities that are made available. For instance, customer churn is a huge opportunity for new market players. By providing lower pricing and clearer billing and good service, a new entrant can compete with incumbents. Self care, transparent monthly billing, quick turnaround on customer requests and innovative services enable market competitors to differentiate themselves.

Utilities must look to how services are delivered and how customers are served to build competitive advantages, create loyal customers and win market share.

Further reading

Accenture-The New Energy Consumer –Architecting for the Future [pdf]

IDC Energy Insights- E.ON UK Rebuilds Trust with Customer Engagement and Digital Transformation [pdf]

Opower-Moments that Matter:Maximising the value of customer engagement in Europe [pdf]

Opower-E.ON UK: A Best Practices Case Study from IDC Energy Insights [pdf]

Opower-18 Things Utilities Need to Know About Accenture's new report on energy consumers