Electric Utilities and Re-imagining The Customer Experience

Electric Utilities and Re-imagining Customer Experience

In some ways, electric utilities are like any other business. They have demanding customers. However, utilities face challenges that other businesses do not. That includes differences in scale, such as supplying power to industrial customers like data centers and small seasonal cottages on a lake. Also, what each customer wants from the utility can vary widely. Some customers want to engage with the utility and participate in the details of their projects or closely monitor their power use to minimize their power bills. On the other hand, some customers don’t want to hear from or be bothered by their utilities. They want the utility to be invisible.

That creates an interesting dilemma for utilities. After all, how do you improve the customer experience when the customer’s interactions with the utility and what they want are so different? Not only that, but Utilities are frequently asked to provide an as-yet-unformulated solution to meet the customer’s needs. It’s not just as simple as pulling a pre-made item off a shelf or whipping up a burger

in a fast-food restaurant.

Most Utilities are very conscious of their customer experience challenges. They are well aware of the perception that they have a monopolistic advantage, since most customers can’t just ‘go somewhere else’ when they are frustrated. However, frustrated utility customers can (and do) go public and complain to local politicians, regulators, or the press, which, in many jurisdictions, has led to the implementation of performance standards that the Utility is expected to achieve.

The Engine Room has worked with numerous utilities (and companies in other industries) to improve customer experience or streamline internal processes, thereby increasing their success in meeting customers’ expectations.

A guiding principle in the Engine Room’s customer experience engagements is research indicating that a critical factor in whether customers view a business favourably is the level of customer effort required in their interactions with the company, especially when something has gone wrong.

A practical example is the reaction most of us have when faced with a flight interruption. Frequent flyers generally understand that delays due to bad weather or mechanical problems happen. They also understand that a delay is better than a plane crash. However, a simple delay can become infuriating, especially if the airline treats passengers poorly and the process is painful.

An interesting conclusion advocated by experts in the field is that trying to make customers happier or more loyal by providing more ‘features’ may be the wrong strategy. The idea is that once customers are sold on the company’s product, focusing on avoiding actions that make customers disloyal and considering customer effort a central theme is the right strategy. So, when customers are already interacting with the business, especially when something goes wrong, researchers have found common characteristics that increase customer effort and become the drivers of dissatisfaction. Those include:

• Having to call back multiple times over the same issue.
• Being pushed into channel switching (In-person, phone calls, website, letters, etc.)
• Being passed from one person to the next.
• Having to repeat information (“I already gave you that number, why are you asking me again?”)
• Being forced to endure explanations of the company’s policies and procedures (“I’m the customer, that’s not my problem”).
• Anything that contributes to the “hassle factor” (“This experience is going to be a pain”).

It turns out that people may have an intuitive belief that customer satisfaction is based on factors such as fair pricing, value, or brand recognition, but it’s more than that. Also, some of the biggest mistakes companies make in how they treat customers may seem innocuous, but they can infuriate customers. Something as simple as the explanation for a schedule change can make the customer feel good about the company or be so maddening that price becomes secondary.

Utilities have made meaningful progress in improving aspects of the customer experience. A good example is the increased availability of clear, accurate information on power outage status and restoration timelines. Providing customers with timely updates during outages helps reduce uncertainty and frustration during service disruptions. However, utilities have been less successful in other areas. In some cases, they have overestimated customers’ interest in actively managing their electricity use through smart meter apps or shifting routine activities, like doing laundry in the middle of the night. While some customers may adopt these behaviours to reduce costs, they are rarely viewed as convenient or low-effort solutions and are often met with quiet resentment rather than enthusiasm.

Weighing the pros and cons, we suggest that many in the utility sector unde