Utilities Not Ready for Coming Customer Engagement from Smart Grid

14 Comments

If the latest consumer backlash over smart meters in Texas wasn’t enough of an indicator that utilities are facing a communication problem around the smart grid, here’s another: a report from research firm IDC Energy Insights, and sponsored by telecom firm Telus, finds that utilities “have not thought through the implications of new technology and products on customer relationships or the business process.” In other words utilities are not at all prepared for the increased amount of communication, education and interactivity that will be required from installing new smart grid technology.

The report finds that the installation of smart meters will increase the amount of time that the customer spends on a utility web site, as well as the amount of customer service phone calls a customer will make. According to a survey that IDC conducted, 35 percent of utility respondents that have installed smart meters have seen an increase in call volume of between 10 percent and 30 percent.

But not only will customers seek to interact with utilities more around the topic of new smart meters and demand response services. The addition of variable, real-time pricing, and home energy displays also provides a direct channel for a connection between the utility and the customer like never before. IDC explains the overall shift that consumer-facing smart grid technology will bring as:

“The customer will be more engaged on a daily basis with the utility. The customer will no longer be a passive recipient of a bill, but an active partner in managing energy consumption and cost.”

However, instead of embracing this opportunity, IDC finds that utilities are head-down focused on building out the smart grid infrastructure, and are not spending adequate amounts of time and money planning out communication, education and customer service strategies for that smart grid infrastructure. “There has been little investment in customer contact aids such as live chat or training of customer service representatives to walk customers through the Web experience,” says the report. And only 60 percent of the utilities surveyed even have a consumer-facing website (see chart).

Image courtesy of P^2’s photostream Flickr Creative Commons.

14 Comments

Alex

you should also check out Efficiency 2.0. They do the same thing as Opower, but in a different way

Katie Fehrenbacher

This comment is from Scott Zimmerman, President, TeleVox (I’m submitting it because he sent it over via email):

You raise some good points, Katie. When it comes to the installation of smart meters, utilities can realize significant time and cost savings by better communicating with their customers. For example, sending notifications to customers letting them know exactly when the installation crews are going to arrive while reminding customers they need to be present to let the technician into their home, vastly improves the customer experience. When the customer receives a text message alerting him the technician is on his way, he can simply run home and meet the technician at the door. Not only does this simple notification process make life easier for the customer, it prevents calls to the customer service center. When given a four hour window, 80 percent of customers call the utility company within the first 10 minutes to find out where the technician is and when he will arrive.

Additionally, effective customer communication can help utilities prevent the power grid from failing during high demand periods such as hot summer months. By sending out notifications to customers letting them know to conserve energy, asking them to cook during later hours, or to close blinds during the day, utilities can keep the power grid from failing.

Sending proactive outbound notifications via phone and SMS to customers before they get a bill is another emerging trend for utilities. By simply changing the timing of communications and enabling their customers to respond with an immediate, electronic payment, utility companies gain revenue earlier and reduce costs associated with mailing invoices.

For example, one of our clients has prevented more than 40,000 truck rolls on a yearly basis by simply sending customers a disconnect notification (via text, email or phone) that provides the customer the opportunity to pay a bill and prevent disconnection. This simple communication process has saved the utility hundreds of thousands of dollars that they can now pass down as either rate decreases or investments in infrastructure.

These are just a few examples of how utilities can leverage technology to engage and activate customers, moving them from passive to active partners in managing energy consumption and costs.

Jennifer Bach

The full white paper from IDC Energy Insights, sponsored by TELUS: From Customer Service to Customer Engagement: Are Utilities Prepared for the Smart Grid Experience?, is available for download at: http://bit.ly/9rH886

The white paper estimates that 60 million residential US customers will have smart meters attached to their homes within three years. For many utilities, new technologies like smart grid and home automation are both a blessing and a curse. On the one hand, the new technologies empower their customers to better understand and manage their consumption in partnership with the utility. For utilities themselves, the technologies give them tools to make power delivery more reliable and efficient and to react faster to outages or network issues. On the other hand, involved customers call in more often and with more advanced questions, creating huge new demands on a utility’s customer service capacity.

Jennifer Bach
TELUS

pbee

Check out Opower. They are developing software for utilities— enabling customers to see, compare and understand their usage patterns.

Denisse Lemos

I could not agree more with this article. I have been doing some consulting in the energy sector and have been discussing this change for a year now.

The energy industry is facing a convergence and should look outside their industry into other sectors that have successfully undergone this change. The telecommunications sector, prior to the revolution of the internet, did not have much interface with their customers. In essence, if you NEEDED a home phone to have communication outside your house; you would contact your local telephone company in order to have a land line. The same process applies if you wanted cable TV in addition to broadcast. The internet and the development of new technologies revolutionized the commercialization channels of the telecommunications sector.

Today cable companies like ATT (Provide phone, TV & internet services) work closely with their providers (both equipment and content providers like Sony Ericsson, Nokia, etc ) to create trade and consumer initiatives that consistently educate and influence the early adaptation of new technologies. Changes like these take time regardless of funds because affecting and influencing social change or the way a society consumes a product does not happen overnight.

Utilities may seem to be too concern with the potential of customers being able to create their own energy supply through the adaptation of renewables resources such as solar panels. In my opinion, this will not be the case, much like anyone could now create and market their own content, the average individual is too busy living his/her life to focus on that. The residential customer will look to the utilities to consume energy in new ways. If, let’s say 80% of the utilities’ customers are residential and not commercial, then a go-to market strategy to target this segment should be addressed first.

Forward looking utilities will either contract agencies or hire marketing experts that will drive this change….the question is who will be the player that will lead this wave? In addition, it is not just up to the utilities, Power and automation companies such as ABB, Siemens and other equipment companies and energy providers that have will play a part of the smart grid should develop programs to help utilities market new changes to their customers, if of course, they want to speed up contracts.

Denisse Lemos

Hello Katie, Thanks for the articles you write. I am not sure if you received my comment on this article and if you have, I am wondering when you are going to post it?
Thanks again, Denisse

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