The New Energy Consumer Metering, Billing/CRM Europe 2012 Greg Guthridge, Accenture October 9-11, 2012
Balancing strategic imperatives with emerging and nascent ARBS customer Delivers solutions Four Client Outcomes In the evolving energy marketplace, providers must take a balanced approach to developing Next Generation Customer Strategies 1. Reduce Operational Cost-to-Serve 2. Enhance Revenue Potential 3. Sustain or Improve Customer Value 4. Drive Energy Efficiency Goals 2
New Energy Consumer initiative overview Accenture's New Energy Consumer program has surveyed nearly 30,000 consumers over 3 years and includes insights from over 50 leading providers globally. 2012 Countries Surveyed Global Scope Australia Belgium Brazil Canada China Denmark France Germany Italy Japan Netherlands Norway Singapore South Africa South Korea Spain Sweden United Kingdom United States Survey targeted residential end-customers 10,158 individuals in 19 countries were surveyed in 2012. Over three years of research nearly 30,000 consumers have been surveyed Selected countries represent a range of regulated and deregulated markets Quantitative survey with a sample statistically representative of the general population* Surveys were approximately 30 minutes and conducted online in native languages Includes input from over 50 leading regulated, deregulated, and municipal energy providers in North America, Europe, Asia Pacific and South Africa *In Brazil, China and South Africa sample representative of the urban populations 3
1. Consumer engagement and trust In today's environment, most energy providers lag behind other home service providers in creating a trusted relationship to support emerging consumer energy needs and preferences. Utilities today typically have a one-way, low value customer experience: Energy is typically a low percentage of household spend In Europe, consumers interact on average 9 minutes per year with their provider Over 70% of interactions today are neutral or negative Paradoxically, 75% of consumers instinctively turn to their energy provider to optimize their consumption but less than 30% are aware of utility programs that enable them to do so. While approximately 59% of customers are satisfied with their energy provider, nearly 75% would consider a nontraditional provider for emerging smart products and services. Aside from a vocal minority, most consumers will engage in smarter products and services. 4
2. Customer satisfaction Increasing customer satisfaction is a key ingredient in encouraging consumers to adopt smarter programs and consider innovative energy management programs. While satisfaction is largely driven by price stability, reliability, and service quality; perceived stability and accuracy of the bill is also critical. Most providers have a transaction-oriented one size fits all service model that, regardless of length and number of interactions, has minimal impact on satisfaction and customer mind-share. Choice is a key ingredient to improving customer satisfaction and perception of value. Satisfaction increases by 5 basis points and retention doubles with the addition of incremental products and services. 5
3. Price and rewards Consumers continue to be motivated by programs that offer financial benefits but pricesignals alone won t necessarily drive sustainable interest, adoption or added-value. Financial benefit is the primary motivator of consumers energy decisions but it is not enough to drive sustainable and large scale adoption. Pricing programs are most successful when bundled with other incentives such as loyalty/rewards or other convenience oriented programs. 76% of consumers will actually forgo certain aspects of customer service for discounted energy prices. Pricing simplicity is key to customer engagement and satisfaction; the more complex and volatile pricing is, the more costly to support and maintain customer satisfaction. 6
4. Personalization The definition of a new energy consumer is evolving and the need to offer individualized product and service sophistication is growing everyday. Consumer preferences are increasingly fragmented making it imperative to develop tailored and personalized products and services. There is a minimum of 6 major segments and in-excess of 50 sub-categories of customers in a given geography. Discretionary time is a key factor in addressing both high needs and set-andforget consumers. The more tech-savvy the consumer, the more they prefer setand-forget energy propositions. The definition of a consumer is changing and for providers, the target customer is often the family other occupants of the home, not the bill payer. Personalization must embrace unique consumer values: Simplifies my life Fun and accessible for the family Uses latest technology Connects with community 7
5. Channels of interaction Successful utilities will evolve to a dual customer relationship balancing high touch and self-service interactions. Over 65% of consumers prefer tailored web/mobility self-service for 6 out of 9 primary customer interactions. The key to web/mobile adoption is simplicity, consistency, real-time processing and intuitive ease-of-use. High-touch channels such as in-person or agent-assisted remain important and economical for certain interactions. As pricing and product options become more complex, consumers increasingly desire face-to-face interaction. Interest in social media interactions continues to grow and now over 30% of consumers would like to interact with their energy provider through social media. There are moments of truth when consumers are most receptive to education and value-added product and service sales; moving house, high bill, home renovation, or birth of a child. 8
6. Evolving energy ecosystem Non-traditional market entrants are establishing innovative new product and service bundles that will challenge energy providers incumbency in the marketplace. De-regulated market providers are aggressively pursuing in-home bundled products and services to enhance competitive advantage. Regulated market providers are seeking opportunities to support and participate in the growing beyond-the-meter ecosystem for advanced energy services. Smart meters and next generation in-home technologies (e.g. Nest, Green Button) are facilitating and accelerating the market for in-home offerings. Non-traditional entrants (electronics and home improvement retailers, telecommunications, solar providers, etc.) are quickly entering the market. 73% of consumers would consider a non-traditional provider for in-home products and services and distributed generation. Growth in white-labeling and fighter brands highlight emerging strategies for energy providers. 9
7. Beyond the meter Consumers are increasingly interested in home energy management solutions that offer convenience and simplicity. While 31% of consumers will pay a premium for bundled products, they associate less value to service enhancements. In specific markets consumers show significant interest in home energy generation products. The majority of consumers prefer solutions centered on convenience and setand-forget propositions. Nearly half of consumers will pay a premium rather than actively manage energy consumption. Customers prefer simple bundles that provide a specific lifestyle solution: Save me money, Save me time, Save the planet. Approximately 50% of consumers are interested in bundled in-home products and services including some that are not energy related. Signing a consumer up for at least one additional product or service reduces churn by 50%. 10
The currents of change Four central currents of change are driving providers to focus on developing a specific set of next generation customer competencies. 11 11