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The New Frontiers

By now, I have become quite used to getting a notification from my phone before I start for work or start from office for home, informing me on how long will it take to drive and the traffic situation. What makes it interesting is that I never told my phone where I go to work or when I end my working day. It somehow figured that out. Since last month, I get an additional info that tells me where I parked my car. Very useful for a guy like me who almost always struggles with finding his parked car. The real ‘aha’ moment happened when I left my car at the workshop for repair and drove back home in a rental car. The notification correctly showed that my car is parked at the workshop 40 km away. How did the phone know I am now in a rental car?

Or just fancy the situation I am in right now where I have to compete with a fitness band for my wife’s attention. The fitness band has managed to become her companion, urging her on when she is falling behind, celebrating with her when she reaches her goals and sharing stats on her progress complete with peer group comparison, keeping her motivated.

Welcome to the new brave world of customer engagement which is almost ubiquitous, intelligent and manages to connect with the customer at the right time with just the right information. All good, but does it really matter to a Utility Company? Before we answer, let’s see what going on in the Utilities Industry.

Utilities- An Industry in flux

‘The Strategy is pretty simple, we just need to make sure everything runs smoothly. As long as we     don’t mess-up, we will continue to make money’, answered an executive from a leading European Utility some years ago when I queried him about the company strategy. Sadly for him and the Utility Industry in general, these days are long over. With de-regulation sweeping across the globe, the Utilities find themselves for the first time in a competitive situation. The customers or the revenue stream as the Utilities thought about the customers in the past, is not assured, rather up for grabs. Suddenly they have to deal with phenomenon like ‘Customer Attrition’ and ‘Customer Retention’. Given that energy is just a commodity- it’s hard to assign a quality to electricity, for example. Then, how can a Utility differentiate itself?

While the energy prices are going south, the costs are going north abetted by stringent regulatory environment and the advent of renewables. Perhaps most telling is the trend of consumers becoming prosumers, producing their own energy. Given advances in the energy storage technology, the day is not far when a premise complete with its solar panels and storage batteries becomes completely self-sufficient and gets off the Grid. How will the Utility make money? Players like supermarket chains, Home service providers have started to offer energy tariffs too, further squeezing the Utilities in their core business.

At this point, let’s revisit our question if customer engagement matters to a Utility. The answer is a resounding ‘Yes’ and furthermore, this might even be the solution to the challenges afflicting the Industry. Let’s see how.

Customer Engagement, the Savior

It could be argued that of all the industries, Utility Industry is perhaps best positioned to craft a winning customer engagement strategy. Unlike other players, thanks to their regulated past, most of the Utilities already have a treasure trove of data about their customers. Customer Premise details, payment history, consumption pattern just to name a few. With the advent of smart meters, the Utilities will have access to even more detailed consumption data of their customers that if looked carefully enough can reveal much more than just consumption pattern like possible appliances that the customer might be using.

What is needed is to combine this in-house data with external data harvested from sources like social media, website visits to get complete view on the customer. Now this data needs to be crunched intelligently to pick out patterns, insights that should eventually help to design not just the right tariff but also other related products and services for your customers. The next step is to figure out how you take it to your customers so that they just love the whole experience. The idea is to move beyond the traditional sales and service mindset in favor of having a constant meaningful conversation with your customers. Remember the fitness band, parking example. In a Utilities context, one too many visits by the customer in the bill/payment plan section of the self-services app could lead to a pro-active call by service agent asking the customer if all is good with the bill and if she needs help with paying the bill. A peak in a consumption could lead to a notification informing the customer about the event with a suggestion to perhaps turn-off the heating as the weather is already quite pleasant at her location.

Of course, to make such use cases possible the Utilities would need quite a bit of help from the technology which fortunately exists today. Here, I would like to invite you to the International SAP Conference for Utilities taking places in Lisbon, Portugal April 17-19 and check out the Customer Engagement track to learn how SAP solutions could help you realize your unique strategy. In conclusion, some food for thought. As the famous Elon Musk famously said ‘The chances of your business succeeding increases exponentially if your business has reached a point where your customers want it to succeed’. Have you, as a Utility, already reached this stage or at least aspire to?