Tech, people and data: top priorities for energy and utility companies
We recently took a deep dive into the issue of energy deregulation, exploring three case studies of liberalized markets (in Sweden, Japan and the United States) to learn more about the challenges, pitfalls and opportunities that deregulation can bring.
You can download the full report for free here, but three major takeaways from our report were that energy and utilities companies need to:
- Keep up with technology
We found that younger companies can wield an advantage over older ones if the latter are not technologically prepared. Energy retailers must familiarize themselves with new digital tools and financial products that enable the creation and provision of value-adding services.
- Focus on value to customers
After some initial missteps one of our profiled providers found post-deregulation success by placing the focus on delivering value to customers. Innovations need to convince customers that they are getting exactly what they want, at a price they are willing to pay.
- Make use of your data
Too often we found that energy providers have either sat on their customer data, or allowed it to fall into other people’s hands. With quick access to customer data, you can better tailor packages to their needs.
This is a pattern found across all industries and in all regions: business priorities are being driven by evolving customer expectations and a rush towards digital transformation. Successful energy and utilities providers will be those that can fully embrace new technologies and apply them to all aspects of operations, trading, services and products, including:
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- Power and gas spot markets
- Futures contracts, swaps and hedging strategies
- Net metering
- Locational and time-of-use transmission charging
- Renewable Energy Credits
- Distributed energy resources
- Direct-to-customer digital utilities
- Virtual power purchase agreements
- Virtual power plants
- Demand-side response
- Smart EV charging
On the customer side, we’ve written about how the no-longer-young cohort we call Millennials are shaping how successful utilities attract and retain customers. The new generation of customers are digital natives, who expect personalization, speed and ease of service and a social conscience from businesses they buy from.
This 2018 research by Accenture revealed that 91% of consumers are more likely to buy from retailers who recognize them, remember previous purchases and tailor recommendations accordingly. They also found nearly 80% of millenials would consider switching energy providers if they aren’t given a seamless digital experience.
Furthermore, according to a 2021 study by GreenPrint, 75% of Millennials are willing to pay more for environmentally sustainable products and services, compared to 63% of Gen Z, 64% of Gen X, and 57% of Boomers.
The profile of the average energy consumer is changing. Ongoing success requires up-to-date tech, an understanding of the customer base and extensive data.
