Our homes are getting smarter. They respond to our commands via voice assistants and smart devices; see everything thanks to the latest security and monitoring systems; and can even warn us whenever they notice a maintenance problem. Utilities have a prime role to play in this revolution, if they can embrace change and keep pace with their customers’ needs. To that end, here are 5 global customer trends Utilities can positively leverage.
5. Don’t forget the 50+
Millennials ¾ this large group of consumers currently between mid-20s and late-30s ¾ have been on everybody’s mind. Much has been written about their influence on customer service, tech-savvy, and stinging punishment when they don’t get what they want.
Utilities are not immune to the power of Millennials but many “are simply unable to purchase homes due to poor job prospects, student loan debt, and lack of access to credit,” reports The Atlantic. US census data shows a drop of 10% (from 52 to 42%) in home ownership between 1980 and 2010 amongst the 25 to 34-year-old age group.
As such, it might be more beneficial for Utilities to shift their focus away from Millennials, at least for the moment, and toward another growing demographic, the 50+, who now account for “almost a quarter of everyone on the planet.”
Focusing on the 50+ can greatly benefit Utilities as they tend to:
- Own mortgage-free homes in greater number
- Have more disposable income
- Want to keep their homes secure and in good working order
- Look for ways to cut costs and save on insurance
- Be receptive to technology allowing them to stay in their homes longer
The rise of smartphone ownership has given consumers more control over many aspects of their lives. With almost 60% of the world’s population expected to be using a smartphone by 2022, the device presents almost limitless possibilities for Utilities who can tap into their customers yearning for energy savings, peace of mind and added security.
A device like Cocoon for example, listens to your house when you’re out and reports any anomaly, allowing you to tap into live video streaming directly on your smartphone and to sound an alarm. As a bonus, the system is backed by home insurance company Aviva.
Because they “feed” the home with the resources it needs (electricity, gas, water), Utilities should be at the forefront of smart home technology. But where to begin? Home security (49%), lighting controls (43%), and heating and cooling (41%), top the list of home operations customers would like to control via an app, according to HomeServe.
Through partnership with app developers and service providers, Utilities can offer their customers the control they want over their homes. HomeServe’s Leakbot is a good example of the type of system that can alert homeowners when a change in air or water temperature suggests a leak thus saving them expensive insurance claims.
3. Instant gratification
Let’s face it… today’s consumers keep their smartphones on a very short leash. This has made them “empowered and emboldened by information,” says Google’s VP of Marketing Lisa Gevelber. It’s also made them impatient, impulsive, and constantly looking for instant gratification, she adds. While on its face this might seem like a difficult obstacle to overcome, it also presents Utilities with a great opportunity to connect with their customers.
Simplicity was one key factor customers wanted their supplier to focus on, according to research by the Institute of Customer Service. “This requirement will intensify amid the advent of the digitally-enabled customer that will want its supplier to make things as easy as possible.”
Utilities can leverage technology to provide their customers with instant information. By promoting the installation of devices such as smart thermostats and sensors, Utilities can gather consumption data they can then pass on to their customers along with their rates and billing information.
Consumers are increasingly aware of the benefits attached to energy and water conservation. That said, they’re not that interested in doing the hard work to make it happen. Utilities are in the best position to offer consumers the convenience and the benefits they’re looking for, without having to lift a finger.
This convenience comes in the form of smart technology. One billion sensors will be connected to the internet by 2022, according to UK regulatory body OFGEM. Smart “meters at the heart of the home give the energy sector a huge opportunity,” says the report. They can have “a major influence on energy conservation and sustainability by helping to shape and target consumer behaviour.”
Take tado for example; it can save customers up to 31% in heating costs by monitoring the weather and adjusting the temperature so it remains just the way they like it. But that’s not all.
Based on the information collected by these devices, Utilities could also start offering “targeted value added services to consumers.” Toon for example, gives customers a lot of insight into their energy consumption. At a glance, they can identify which of their appliances waste the most energy and soon, they’ll be able to know when their boiler needs an upgrade.
In addition to signalling leaks, HomeServe’s Leakbot, mentioned earlier, is another valued-added product as it gives customers a path to book an approved expert plumber directly from the app when a problem presents itself.
Trust could truly benefit Utilities but attaining it can be tricky. Currently, consumers have a love-hate relationship with their Utilities. On the one hand, more than 70% say they’re satisfied with their provider and when asked who they would trust to install smart technology, consumers still give their energy supplier the top spot with 34%.
That said trust is an ongoing relationship and Utilities have to work harder to retain it nowadays. “Loyalty towards organisations is decreasing and becoming more conditional – consumers seek a clear articulation of benefits to them and a growing reluctance to accept underperformance – 6m domestic energy supply accounts switched in 2015,” in the UK alone, according to OFGEM.
A UKCSI survey saw Utilities clinch the second to last spot when it comes to trust, leaving a lot of room for improvement. Not only are high brand trust scores “required to attract customer use of alternative energy offerings and to increase the preference to use utilities as providers of these products,” reports Business Wire, but they also present many advantages.
In 2017, the most trusted brands saw an increase of 7% in their customers’ support of rate hikes and a jump of 27% in positive comments. But how can providers gain this trust?
The solution is actually quite simple: focus on your customers. “Ultimately, the winners in this space will be highly-trusted organisations with an unwavering focus on customer-centricity,” says the report Attracting and Retaining Customers in a Disrupting Energy Market. This focus will be sustained by “a keen understanding of the power of data to drive a personalised customer experience.”
One of the key ingredients for developing a trusted brand is nurturing a customer focused environment amongst employees. If you look after your staff, they will take care of customers. Enel, listed in Forbes’ ‘Top 20 World’s Best Employers’ list in 2017, places emphasis on staff wellbeing and internal innovation ideas to “empower and motivate those who work in our Group” says CEO and General Manager Francesco Starace. Iberdrola are connecting with future employees and partners via a university training program, Iberdrola U, ‘collaborating to develop innovative solutions to face the challenges of the energy sector’.
In the current fluctuating ecosystem, Utilities must do more to offer their customers targeted, value-added products that can be integrated into larger smart home systems. If they can leverage customers’ demands for control, instant gratification, and convenience, they stand to gain their trust, and ensure a bright future for themselves.
As the smart home market continues to grow, Utilities, OEMs and HVAC companies are, or should be, racing to capitalize on this unprecedented opportunity to become more relevant in customers’ homes.
HomeServe announces strong financial performance in Membership and further investment in growth initiatives
With increasing energy demands coinciding with the move to deregulation and regional concessions for electrical supply, it is the first movers amongst the private Utility companies who are set to reap the rewards.