Where Were the Electric Utilities on Cyber Monday?
I post this question drawing upon the following two data-points:
1. Almost 100 million Americans (certainly all of whom are electric utility customers) shopped via the Internet on Cyber Monday, the online retail event following Black Friday.
2. ALL of the top 15 products that consumers searched for on Cyber Monday are consumer electronics, which, of course, use an electric battery or household current for their operation!
But while consumers are increasingly interested in consumer electronics, the ways in which they use electricity are changing. The utility industry’s future could be one of revenue erosion as consumers adopt off grid self-generation and the customer side of energy efficiency solutions. Additionally, revenue erosion could occur from consumer conservation, sparked by a price backlash against utility rate increases in both average prices and peak period prices. At the same time, smart metering and the potential of plug-in electric cars afford “killer app” opportunities for managed revenue growth that can increase operating margins. So in defining its role in advancing energy efficiency, renewable energy and electric transportation enabled through smart metering and grids, electric utilities have a complex set of messages to communicate.
Also changing are the ways that consumers communicate with product and service providers. Compounding a utility’s revenue and customer relationship strategy is the shift among consumers away from the traditional media (newspapers, radio and TV) and toward new media platforms, like Facebook, Google, YouTube, Twitter, etc. For example, YouTube is second only to Google in business related searches with approximately 1.5 million queries per day. Twitter is emerging as the electronic version of newspaper coupons. New media has raised consumers’ expectations that their voices will be heard on what they want to buy, how much they want to pay and from whom they want to buy. Across market segments, from the Millennial Generation to Mommy Bloggers, there is a rapidly rising expectation that a utility should be listening to, and acting upon, these expectations.
Jonathan Drost of The Nielsen Company observes, “From many of my consulting sessions within utilities there is a common theme of lower customer satisfaction results because the customer perceives a lack of community involvement, environmental stewardship and educational support on saving energy from the utility.”
So what does this all mean? One key insight revealed through Nielsen’s research is that 60% of Americans surveyed say they will continue to cut their utility costs AFTER the end of the recession. Another insight from Nielsen is that consumers are now viewing shopping on the internet as a cost savings path with over 50% of those interviewed citing reduced transportation costs and the ability to do comparative price shopping as their reason for buying on the web. Experian Simmons provides a significant research result that over 44 million adults printed coupons from websites over the last six months of this year, a 21% increase versus 2008. Leading coupon websites like Retailmenot.com, CouponCabin and BradDeals.com reported 40-174% increases in website traffic amounting to tens of thousands of visitors per hour. The evidence appears compelling that if an electric utility does not engage its customers in a communal, customer-centric, process then the customers will use new media paths to find non-utility sourced solutions, such as the emergence of iPhone apps that enable enterprise or home scale energy management solutions, including interfacing to onsite solar and battery systems.
This nexus of the following requires the utility industry to look beyond its traditional customer-relationship strategies:
- a permanent shift in consumer focus upon utility cost reduction,
- web-enabled cost management tools,
- a growing introduction of off-grid technology solutions and 4) new media’s emergence as a learning tool for “best practices” consumerism.
Example questions for utilities to consider include:
1. How should a utility use “CheapTweets” to communicate price discount “coupons”?
2. What utility blog features are required to harvest customer inputs on all topics related to energy, enabling utility implementation of action-items that create customer loyalty and satisfaction?
3. How should utilities engage in the emerging iPhone/smart-phone energy management apps?
A telling indication of the utility industry’s progress will be seeing what they are doing in terms of outreach and marketing during the next Cyber Monday.