Thursday, January 26, 2017

Exploring Consumer Expectations in the World of Amazon, Uber and Apple

Last week, following the Jan. 9 release of the “Customer Experience & Expectations” report, we presented a webinar to delve into some of the key findings of the research. I was joined on the presentation by Bridget Meckley, SGCC's Research Coordinator, and Gomathi Sadhasivan, Lead of Customer Decision Sciences at DNV GL, and SGCC's Research Committee Chair.

Bridget started things off with an overview of the research. SGCC undertook this research as we wanted to truly understand whether experiences with a variety of service providers were affecting how consumers viewed their energy provider. Grid modernization has now been going on for several years, and we sought to understand how the environment is changing.

For this research project, we conducted a survey of 2,000 online respondents and collected information on consumer awareness of smart grid concepts and benefits, interest in six value propositions and experiences and preferences for six typical touchpoints in the consumer-provider relationship.

In all of our research, we try to understand consumer behavior and attitudes, and for the “Customer Experience & Expectations” research, we looked at consumers through three dimensions:
  • SGCC's segmentation framework: Green Champions, Savings Seekers, Status Quo, Movers & Shakers and Technology Cautious
  • Technology use: All tech, leisure tech, transaction and no tech
  • Energy use: Significant use, average use and baseline use

Value propositions

Within this framework of consumer segments, energy user profiles and technology use, we examined consumer propensities for six value propositions and six touchpoints.

For each value proposition presented to consumers, we looked at four elements:

  • Control – the amount of control that the consumers retains
  • Transaction burden – the consumer's investment in money, time and/or effort
  • Information sharing – the level of personal information that the consumer must share   
  • Incentive – the size of any benefit plus any other inducements
While both transaction burden and information sharing do seem to have some impact on consumer interest, we found that control has an enormous effect on consumers' willingness to participate in a program. However, for value proposition six, we took away consumers’ control and still saw a fair level of consumer interest due to a high incentive offered.

Consumers make trade-offs every day in their purchases, and how energy stakeholders mix and match the trade-offs is important in how they structure and communicate offers.

Finally, Bridget closed this section by reviewing key tips for marketing offers for consumers from the updated version of the “Consumer Value Proposition”, which will be released in the coming weeks by SGCC’s Education & Outreach Committee:
  1. Use specific, positive words and phrases
  2. Dependable service, economic benefit and quick power restoration appeal to almost all consumers, but marketers need to focus on the end results not the process.
  3. Use short, direct statements.

Touchpoints

Next, Bridget turned the presentation over to Gomathi, who covered the touchpoints that consumers generally have with their utilities and other service providers.

We looked at the typical things that every consumer does with any service provider – pay a pill, sign up for a service, report a problem, resolve a problem, receive personalized offers and receive general information. We used these touchpoints to help consumers tell us what they liked and who did those things well.

For bill payment, consumers reflect a desire for ease; more than half indicate that they prefer to pay their utility bill online. However, Status Quo and Technology Cautious consumers do still prefer to pay by a check in the mail.

When probing customers on how they would like to receive general information, customers prefer to be able to access that info on their own time for customer-initiated interactions. Across all segments the favored method is a website inquiry, and a phone call with a customer service representative was a distant second for most segments. This touchpoint reveals that autonomy is important to all consumers, as most consumers do not prefer to receive information through push notifications or monthly emails.

When customers are looking for information that may be deemed complex or unusual, however, customers overwhelmingly prefer a high-touch method. When establishing a service, 64 percent prefer a phone call, web chat or in-person contact. When reporting a problem, 77 percent prefer phone, webchat or in-person contact. And finally, when resolving a problem, over 80 percent of consumers prefer a phone call, web chat or in-person contact.

Next, we took a look at personalized product and service offers aimed at consumers and compared utilities against online retailers, banks, telecommunications companies and home security companies, to name a few. The key takeaway from this part of the research is that over half of consumers believe that no service providers do this well. Not a single service provider passes the 20 percent mark, but utilities do come out on top at 17 percent.

This represents a huge opportunity for utilities as they have access to customers’ energy consumption history, and this data can be mined to develop tailored offers customers value and find useful.

Opportunities

For the final section, we reviewed opportunities for utilities that can be taken away from this research. While utilities are doing relatively well overall at providing customer service, they have much to learn about innovation, at least in consumers’ minds. Banks and online retailers, for example, are regarded as much more innovative than utilities.

When asked whether they believe that utilities are “consistent”, “knowledgeable”, “efficient” and “easy to do business with”, the vast majority believe so, with 89 percent of the Green Champions and 93 percent of the Technology Cautious.

However, at the same time, the majority of Movers & Shakers, who can be seen as the early adopters of new technologies and services, see utilities as “costly” and “bureaucratic”. This discerning subset of consumers is looking for innovation, and utilities have an opportunity to improve here.

When customers are looking to resolve a problem, providing excellent customer service is essential to maintaining customers’ satisfaction. We asked consumers to rank a group of service providers from best to worst on how they handle problem resolution. Utilities did very well, finishing second behind, once again, banks. Utilities were ranked higher than communications providers and even online retailers.

Conclusion

A major question that we sought to answer with this research is “Are consumers comparing utilities to service providers from other industries who have done a lot of digitization and modernizing of products and services?” The extent to which consumers have been affected by companies like Uber, Amazon and Netflix varies significantly by segmentation. While many consumers do prefer a high-tech experience, there is also a role for high-touch customer service – even for technologically savvy groups of consumers.


To learn more about the “Customer Experience & Expectations” report, download a free Executive Summary at www.smartgridcc.org.