Getting Plugged Into Personalization

Utilities face enormous change in customer expectations, especially related to the digital customer experience, driven relentlessly by third parties that share their customers. Companies like Amazon, Google, Apple invest continuously in differentiating themselves through the customer experience. Overwhelmingly, these companies’ CX innovations rapidly become the status quo for all customers, leaving every other business to follow suit.

Now, as more customers get accustomed to the digital innovation, utilities face increasing expectations for personalization in the CX and in customer communications. McKinsey & Co’s “Next in Personalization” report clearly illustrates the extraordinarily high bar for personalization companies face to capture then keep their customers’ engagement. The report highlights a number of important stats showing just how important personalization is to customers today. The news is good, though. Companies that meet customers' high demands for personalization reap outsized rewards. The better news is that utilities can leap ahead easily in personalization and make a big impact on the customer relationship because of the unique nature of the industry.

Why Personalization Matters for Utilities:

• Customer Expectations: 71% of customers expect companies to deliver personalized interactions, with 76% of customers expressing frustration when they don’t receive it.

• Shifting Behaviors: 75% of customers adopted new “shopping” behaviors during the pandemic, most of them digital, and that trend will only increase. ALL of our customers were forced to shift to digital engagement and self-service due to the pandemic, not just tech-savvy and younger customers, so we need to be prepared.

• Revenue Growth: Personalization drives increased revenue among companies that do it well. For utilities, that growth translates to more customers participating in Beyond the Meter programs, signing up for Surge and Service Plans, and enrolling in EE, DR, and TOU programs.

• It’s Everywhere! Customers expect personalization in all aspects of the customer experience, from how they use your website to digital communication in channels of their choice, to demonstrating that companies understand their needs on a 1:1 level. Personalization went Omni-Channel during COVID and hasn’t looked back.

McKinsey & Co documents a 5 part framework for achieving strong personalization performance, and utilities have a distinct advantage over most industries in these areas. The lack of competition and a predicated journey for new customers, as well as the opportunity to take advantage of a dynamic and experienced ecosystem give utilities an accelerated on-ramp to achieve personalization for their customers.

McKinsey & Co’s 5 Ingredients

1. Opportunity Identification - Utilities’ energy focus and volume of unique data assets at a household level gives the industry an incredible foundation for personalization and identifying opportunities to connect with customers on a 1:Few and 1:1 level. The abundance of 1:1 data at a household level and the critical selection of available products give utilities a more definitive and immediate set of opportunities to engage customers on a personal level. The trick is unlocking that potential.

2. Rapid Activation and Optimization at Scale - Utilities already engage with customers across multiple channels, host a trusted website, and curate a catalog of the most informative content about their services. Pairing those advantages with data, personalization strategies, and new digital assets from talented partners enables a rapid pace of delivery at scale to all utility customers.

3. Martech and Data Enablement - Not usually a core competency of utilities, the industry has a few wildly talented suppliers with energy specific content and technology solutions to support blending unique content with data to create personalized engagement and operational outreach to customers across the entire customer lifecycle. Just look at what Questline Digital is doing with 1:1 video. Seek an expert partner to execute at scale to tackle this success criteria, and customers will benefit immediately.

4. Agile Operating Model - Agile methods don’t come easily to utilities given their large industrial concerns of making and distributing energy safely, securely and continuously. But, digital is different. However, the cost of finding and fixing a problem in the digital world isn’t higher at most points in the delivery cycle, which allows for a dynamic “test and learn” model to connect effectively with customers. Pair and internal team to partner with a trusted Agile supplier to incubate a more agile innovation center that maintains the traditional utility guard rails, but enables faster engagement and alignment with customer expectations for personalization.

5. Capability Building - In the long run, the team incubating personalization will build a tremendous resource with digital acumen and critical experience with data, analytical, and segmentation skill sets to enrich the entire Customer Engagement framework for the entire utility, paying dividends well into the future.

Utilities may not have all of the necessary ingredients at the ready to turn on personalization instantly. Most companies don’t, either. Every industry and most companies have to respond to these new customer expectations just like utilities. However, we shouldn’t let that challenge cause us to delay or defer responding with a plan, either. Companies like Questline Digital and Apogee Interactive offer solutions specialized for the unique needs and attributes of the energy utility industry and can accelerate progress to more personalized customer engagement.

Unique Advantages for Utilities to Make Personalization Work for Customer Lifecycles

• Moment-Driven Engagement: 59% of customers want timely communication related to key moments. Most utilities already manage outage communications localized to the customer and household level, and events like high bills, new programs, and weather warnings give utilities a critical path to connecting personally with customers about themes that impact their wallet and the comfort and security of their homes. What’s more personal than that?

• Targeted Programs - 66% of customers expect messaging aligned with their individual needs. Energy use data, billing history, and demographic data blend to offer utilities a unique opportunity to offer programs on a 1:few and 1:1 basis. Not all customers have equal opportunity to benefit from a learning thermostat rebate, so why email renters in MDUs for a device they can’t buy or install?

• Relevant Product/Service Recommendations: 67% of customers want companies that they trust to offer recommendations for products and services relevant to them. EV customers would appreciate information and offers for EV Charging devices and installation, perhaps bundled with a Time of Use rate plan. Customers with a history of partial payments or delinquencies during high bill season would appreciate an offer to enroll in a payment assistance program. Customers who experienced rolling disruptions during peak load periods would appreciate information and an invitation to install a learning thermostat and register it for demand response programs. Utilities have a well defined and relatively easy path to increase participation rates in their Beyond the Meter and EE programs through personalization of this type, instantly.

Don’t take our word for it. Read the McKinsey & Company study and just let the numbers speak for themselves. When 70%+ of customers agree on core expectations of personalization, the data screams loudly that the industry must respond. Those customer expectations drive solution providers to innovate thoughtfully and find best practices across the spectrum to meet customer needs. Utilities can have an immediate impact with lasting value to customer engagement, CSAT, beneficial electrification, Energy Efficiency, and future programs by building capabilities in their enterprise for customer personalization today. It only takes a small team and a thoughtful partner to incubate the new approach, and success pays dividends across the enterprise. We hope your utility has already embarked on a personalization strategy, but if you’re interest and need some help, please give us a call.