Communication is key: How utilities can perfect their customer communications strategy
Utilities are constantly communicating with customers; verbally and non-verbally, as well as proactively and reactively. While utilities communicate knowingly and at will, there are times they communicate without much thought. Like eating – when aware of it, it becomes planned, deliberate, and can be a very positive experience. When not aware, it is rote and ordinary, and can have unintended negative consequences. Proactive communication comes when utilities send out bills or other reoccurring information, and reactive communication is typically the result of customers contacting about bill inquiries, requests for service turn-on and shut-off, or to report a problem or service outage.
Communicating with customers has become more challenging with the exponential growth of new energy alternatives—including renewable and non-renewable distributed energy resources, demand response, energy efficiency, and a potential myriad of other services that a utility might offer. According to a study by West Monroe Partners, 94% of customers say their provider has not approached them about alternative electricity options. These services are not traditionally offered by utilities, but when they are, they are often outsourced to a third-party.
In jurisdictions where utilities are competing with energy service companies to provide such services, utilities have a significant leg up. They already own the customer relationship and possess much of the data necessary to segment and target services directly to customers. Despite this advantage, however, utilities are slow to benefit. Energy service companies in the meantime are using state-of-the-art e-channel and multi-media campaigns to attract utility customers in large numbers. These companies offer new energy alternatives and services and often electricity, competing directly with utilities.
Utilities are adept at communicating with customers through various media and communication channels across a wide spectrum of devices. But, the messages themselves are often muddled and not directly relevant or actionable to particular customers. Successful marketing and messaging is simple, consistent, and continually reinforced. Messaging should be targeted and tailored to each of the major customer segments.
In order to make communications more effective, utilities need to have a strong understanding of their customers’ needs and interests. Utilities need to know the response they are seeking from customers when planning their communications and outreach. Sending monthly bills with an insert providing information to a customer is passive and not very effective. Although the audience is captive, a poorly targeted message is often ignored. When alternative energy offerings are made to customers, the value proposition of that offering must be the cornerstone of the message for that market segment. Posting information on a website—unless a customer is actively searching for it—will likely not be found. Email blasts, and social media campaigns will reach customers, but may not lead to action. Such messages are typically read when in transit or multitasking, making them an afterthought. So, it often takes several pushes for these messages to resonate before action is taken.
When communicating with customers about the availability and benefit of new energy alternatives, utilities’ approach should focus on engagement and education. The message should be simple, clear, fact-based, and consistent. Here are seven core principles that make up an effective marketing communications plan.
- Two-way communications – Communication is a two-way street. Ongoing dialogue should be shared and parties need to be actively engaged. It’s important views and information are exchanged and issues are heard and responded to.
- Message – A message has no meaning if it’s unclear and irrelevant. Messaging format and language must be readily understandable and tailored to the needs of each customer segment.
- Channels – There are many ways to communicate, but information and messaging is most effective when delivered through channels preferred by customers. Whether it’s text, email, or phone call, it’s crucial to recognize.
- Issue resolution – There is bound to be miscommunication or problems that arise, so it’s necessary to have mechanisms in place to respond to customer interests and concerns.
- Adaptability – Constructive criticism is key to successful communication. Customer feedback refines the communication approach, message, and use of channels, to optimize the objectives.
- Digital by default – More and more of the consumers prefer digital channels for two-way communications, notification, and requests.
- Low customer effort call to action – Customers want convenience, which means the marketing campaign needs a very low effort call to action. This will help dictate the channels for each campaign.
Marketing new energy alternatives to customers requires utilities to know customers’ interests, values, and wants in advance by market segment. The goal is to position the product or service to pique the customers’ interest, support the customers’ values, and meet customers’ wants and needs. Distinguishing wants from needs can be tricky because customers already are receiving reliable electric service at regulated cost-of-service rates. Linking a utilities’ return on investment with customer “good will” – providing customers with services that make them feel good and promote societal well-being — go hand-in-hand. They are complementary with one another rather than competitive.
Successful marketing and communication of new energy alternatives requires laser-like utility providers to focus on the evidence of outcomes and benefits to support claims being made. Such evidence must be clear and compelling, as well as support and strengthen customers’ values and beliefs. This is best accomplished through use of facts, testimonials, and expert opinion. Utilities can have a significant competitive advantage; they just haven’t fully embraced it yet.
Paul DeCotis is a senior director in West Monroe Partners’ Energy & Utilities practice, based in New York City. He leads the firm’s Energy & Utilities team on the East Coast and is a leader for the Energy & Utilities regulatory offering.
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