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In the first and second part of the blog, we talked about the situation and developments that are causing massive revenue losses with the traditional business models that are in place.In this third and last part of the blog, we are discussing what utilities and retailers should change and plan on doing to master customer engagement and retain their position as trusted consumer-focused advisor for energy and water questions and services.

Part 1: The global trend of shrinking revenues & margins, disrupting technologies with the consumer ...

Part 2: Meet the competition that may better understand and serve the consumer

Part 3: “Innovate and partner” - What utilities and retailers can do and how enterprise software can help them win.

Who is to blame for all the misery the current players in the energy markets are facing? Who is demanding change when it comes how we generate and use energy? The cuplriit is clear. It is consumers, no matter, where they live, how old they are, no matter their circumstances.

Many utilities and retailer are realizing that it will be hard if not impossible to isolate themselves from the changing landscape of declining revenues in their traditional business while consumer desires and competitive pressures are increasing. In fact, they are realizing that the consumer gives them the opportunity to succeed.

So far I have seen three ways utilities and retailers react:

  1. Adjust the corporate strategy and change corporate culture where ALL departments focus on consumers and take into account how their actions affect consumers (even the meter shop). 
  2. Split the company. One part only focuses on engaging with consumers.
    As stated in part two, on December 4 e.on announced their decision that their current corporate structure will not be suited to be successful in engaging consumers. They split off a separate company to concentrate on this part of the business. Is this a glimpse of the future?
  3. Do nothing.
    Analysts agree that electric utilities could be reduced to wires companies who will focus on safety and reliability of the grid, on transmission and probably generation as well to some degree. However, such a wires company will have very limited amount of customer interaction.  The consumer engagement would be provided by today’s successful retail companies like electronic stores, warehouse clubs, home improvement or supermarket chains

BTW: Are you working at a regulated utility in a customer service or marketing role at the moment?
Well, I am employed by a vendor serving your needs. Utilities as mentioned in 3. probably do not need these functions anymore in the future. What does that mean for our jobs?

What should utilities and retailer now actually do?

Let me list concrete activities that I believe the consumer-minded utility and retailer should consider:

1. Understand who your customers actually are. Understand what you offer to consumers.
For traditional vertically-integrated utilities in any sector, the answer to these questions might not be that obvious. For example, utilities today offer various products, programs, and services which often are designed, marketed, and sold in organizational silos or via 3rd party service providers. This situation can cause suboptimal execution, an incomplete consumer engagement strategy, and a bad customer experience.

Your potential customers are not only the bill payers but also whoever uses energy, water or any of your services or programs in the premises. This group can also include the household’s children, home services providers like cleaning staff, plumbers or electricians. As one utility put it: “Anyone who can flip a switch is a customer.” You could also say, anyone who can turn a faucet. I know my 16 month old son can!

Also customers come in different roles: Bill payer, Premise occupants, Prosumer, ...

Portfolio of today’s utilities and retailers

2. Accept the premise that you are in the business of acquiring customers.
Likewise, accept the premise that you can lose customers.

Traditionally, utilities and retailers are quite good at taking care of customers they have. Acquiring customers and reducing churn are terms not common especially at vertically-integrated regulated utilities.  Accepting this premise can greatly help change the corporate culture to one that is focused on the consumer.

3. Innovate and partner.
Michael Valocchi from IBM believes utilities and energy retailers need to embark on a roadmap from the energy provider of today to a solutions provider. In other words utilities and retailers need to

    1. bring to market products and services consumers want
    2. partner with service, technology and retail partners
    3. Embrace innovation and cherish the relationship to consumers

4. Excel in operational efficiency in existing agent-assisted and self-service channels
This has always been at the center of customer service. Be aware that utilities need to keep the focus on operational efficiency to free up resources and tackle new ventures.

5. Understand the customer journey from discovery to purchasing to servicing and the various touch points that matter.

Utilities need to understand that a customer need and want develops not only when looking at the consumption bill. It is important to understand different customer journeys and identify relevant touch points that pose an opportunity to inform or sign-up the customer.
For example, a customer journey might begin when someone googles new homes in the area or is shopping for home improvement equipment or materials (e.g. new air conditioner or weatherization materials). Another one could be a building developer applying for temporary power for the construction site of a new apartment building (inform about energy-efficient buildings right then). The utility’s services are probably not on the consumer’s radar but they could matter at that point in time.

6. Devise a plan to create long-lasting customer engagement via an omnichannel strategy.
Customer journeys from discovery to purchase to service are cycles that require constant listening and engagement. Each touch point represents a potential opportunity to engage. Since there are many of them, the utility can create  long-lasting engagement cycles which foster brand recognition and loyalty.
At each touch point it is important to know the customer situation at this very moment and how the individual customer can be assisted. Rather than a one-size-fits-“nobody” approach, a personalized recommendation with information only relevant in the particular situation of the particular customer is valuable information.

Enterprise solutions can help.

As one can easily understand, meeting these requirements afford a large amount of automation, as well as flexibility and agility to adjust. SAP’s integrated but modular customer engagement solutions can help you cover these requirements:

At SAP we believe that utilities and retailers need to understand three important stages of the customer journey:

  1. Onboarding the customer
  2. The purchasing process
  3. Servicing the customer you have

1. Onboarding

The basis for customer engagement is and has always been to know as much as you can from the customer and the context he/she is in at all times. This means that the “360 degree view of the customer” is as important as ever.

A common data platform is required that can house data from any source like ERP, CRM, Web pages visited, consumption behavior, disaggregation results (e.g. determining list of household appliances from the customer’s consumption profile), outage information, social profiles, service history, billing history, complaint history, channel usage, operations on connected things and any other data from any data source. Also, this data platform needs to be really, really fast since it needs to serve up this customer profile as soon as the customer reaches a certain touch point (e..g. googles certain keywords, enters a the utility’s home energy center, browses programs, attempts to pay his bill online, attempts to sign up etc). SAP has been working to build on our HANA in-memory technology to deliver a real-time data platform for Utilities.  First applications from SAP and partners are now available and on the roadmap.

Then you need software that monitors the various touch points.Here are some examples.

This is where our portfolio of customer engagement & commerce solutions come in. This set of new solutions also includes the hybris omnichannel platform. As the name says, this platform brings together any channel and allows the utility to know when customers reach a certain monitored touch point and react accordingly. As said before, this could be a customer searching with certain keywords on the web, visiting a consumer advice portal , entering the utility’s home energy store etc.

New marketing solutions provide a way for the marketer to quickly react to outside triggers for example. The marketer can create new promotional products, initiate customer communication or a place an online ad within a short timeframe while ensuring after-sale processes like delivery or billing continue to perform flawlessly.

2. The purchasing process

Skeptics may say “Utilities do not have web shops”. Of course they do!

They just don’t use these words or put shopping carts on their self-service sites.

I like the British Gas - ahem - "web shop". Although not ideal, it starts off the right way on the home page with "How can we help you?"

I believe however that as a customer it would be much easier for me understand what services the utility or retailer offers if they indeed had somewhat like a web shop. IMHO, the utility web shop is a web site that lets me browse their product catalog which might include their rate plans, Energy-Efficiency programs, informational brochures, videos or webinars etc. Maybe, I can buy a ticket to visit their smart home center there too in the future. Moreover, since utilities and retailers increasingly working with service providers it is paramount to include the communication to 3rd parties in the overall purchasing process. Especially, when the process of purchasing also means selecting and communicating with a service company or contractor as well as maintaining or installing materials or equipment.

The hybris omnichannel platform at its core delivers the one product catalog and a central place to manage any product, service or program the utility offers (along with descriptions, images, videos, etc). hybris makes then the product catalog available consistently across all channels. Also, hybris provides the tools to build, maintain and operate a web site with their web content management tools. Voila, finally the one place I can go to see how the utility or retailer can help me solve my issue and make intelligent recommendations. And one tool for the utility or retailer to manage the customer experience.

hybris: A modular homogenous omnichannel platform

3. Servicing the customer you have

Utilities and retailers have traditionally focused large investments in this area. And this area remains very relevant.

In this area of customer engagement, the utility and retailer should already DO THREE THINGS TODAY:

    a) Offer Customer Self-Service on any device, any channel
SAP can help you cost-effectively run self-service applications (e.g. mobile or web apps) that are tightly connected to SAP and   non-SAP systems (like SAP ERP/ISU, SAP CRM, outage management systems etc). Look here to learn more about our SAP Multichannel Foundation for Utilities and the self-service apps that ship with this solution.

The foundation and the bundled apps include most traditional customer self-service processes (e.g. view/pay bill, move in/out, consumption overviews, inquiries, ...)

    b) Delight Customers With Engaging Content
Utilities and retailers need to consider themselves media companies. A wide variety of content needs to be managed from     brochures to video content. Depending on the communication channel to the customer utilities need to deliver the right message in the right format. This is where SAP Extended Enterprise Content Management from our partner Opentext delivers the best functionality.

At our last Utilities conference, Opentext presented how Detroit Edison revamped their SMB Utility Bill by making it interactive so customers can click in it to get more information. This web-based bill also allows Detroit Edison to insert the most relevant marketing content at the point in time when the customer accesses the bill online (another touch point of the customer journey well managed  :smile: )

    c. Establish “Social media” as an interaction channel
Social media is a valuable channel to interact with consumers. It’s especially valuable since consumers use social media anyway and there is no need to train them to use a special way to communicate to the utility. It is rather the other way around. The utility or retailer needs to “go where consumers hang out anyway”.
For example, you can use social media to better manage customer service operations, crises situations like outages, or communicate better in light of planned infrastructure projects.   

Let’s learn from T-Mobile how they are using social media to improve customer engagement and service:

Click here to watch: T-Mobile Engages Customers Like Never Before with SAP and the Cloud - YouTube

With this I would like to close the blog series. Let me know what you think. What’s important you’re your point of view? It is probably easiest to start by posting a comment.

Here at SAP we are continuing to enhance our set of customer engagement tools to help utilities and retailers globally excel in customer engagement. More information about this shall follow on this channel early next year!

APPENDIX: Other stuff I found useful.

UtilityDive study: The state of the electric utility 2014:

…created every 60 seconds…if you are not listening, you are missing opportunities…

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