Low prices and slim margins– this is where analysts are predicting electricity providers are headed. To consumers, one utility provider’s kilowatt-hour is the same as one from their competitor; it becomes a better kilowatt-hour if it’s cheaper and their bills are lower.
Electricity providers have two options to combat the commoditization of their product:
- Double-down on price as a differentiator and shave margins as much as possible. Run a very lean operation. One provider and the other lower-price competitors will engage in a downward spiral of profits as each strives to have a lower price than the other.
- View your utility as a “service” and provide additional value to that service by investing in upgrading the product quality and customer service. Our recommendation: use mobile technology to make the company a brand name known for great customer experiences.
Implement Smart Meters Your Consumers Actually Use
Smart meters and the technology behind them (referred to as automated monitoring infrastructure or AMI) have the potential to dramatically change how customers interact with utility providers. They have the power to manage outages, open up new resources and lower labor costs, and most crucially, provide a better customer experience.
Despite utility providers deploying more than 50 million smart meters, they are doing little to affect the consumer experience because providers have not made the appropriate investment in user interfaces to relay information from the meter in real time, and distill the information into money and energy consumption for consumers. It’s not enough to invest in smart meters– without the proper investment in data management and analysis, your consumers will not even notice that they now have a smart meter. Considering the 1.8 million results Google returns for “how to tell if you have a smart meter,” it’s clear that most consumers don’t know now.
The irony is that consumers want to know how much energy they are consuming and what they can do to save money on bills. Think about how closely Americans pay attention to gas prices. They see that information in real-time as they are charged and make more informed decisions about their usage and purchase decisions. If gas stations sent a bill each month, do you think Americans would pay attention? Provide real-time information to consumers in an easy-to-use mobile utilities app (rather than a website to check monthly when the bill comes) and consumers will view the app (and the utility’s service) as vital to their life. Utility companies can empower their consumers with the peak times for energy consumption and corresponding rates, creating a more transparent picture of their energy usage and rates. Yes, the more informed consumers may make the decision to consume less energy, but the utility provider will gain more consumers and higher retention rates.
Upgrade Service Quality with Mobile Utilities Apps for Customer-Facing Employees
Have you ever dealt with a customer service representative or service technician and gotten frustrated by the length of the process (the wait time, the CSR finding information)? What you may not realize is that the employee is just as frustrated as you are– they’re dealing with this all day. They spend their free time with user-friendly mobile devices that deliver the right information at the right time, but have to spend 8 hours with a clunky, non-intuitive system. This is happening at call centers and out in the field if a user-centered mobile solution is not in place for customer-facing employees. Your customers not only experience their own frustration with the process, but have to feel it secondhand from the customer service representative dealing with angry customers.
When a customer calls for service or deals with a maintenance tech out in the field, this is one of the few times that they are directly interacting with the provider. It needs to be as seamless as possible.
Competing on price is a short term way to increase profits, but a long-term way to guarantee the company’s demise. Make a long-term investment in customers’ and employees’ user experience to provide a sustainable solution to commoditization.