Competition for customers has never been higher. As explored in our Transformation talks series, bad experiences often drive customers to shop elsewhere and switch brand loyalty. But, what does that mean to an industry like utilities, where the customer base is often controlled by geography, not choice? Or energy, where competition can hinge mostly on the cheapest price at the pump? Does the need to focus on customer attraction — creating a gravitational pull that draws in loyal brand advocates — still apply? We believe so. And, it could be even more important than ever given changing customer needs and the evolving energy landscape which introduces emerging players eager to step in and potentially take your place.
For decades, competition for customers applied mostly to retail electricity and gas providers in deregulated markets. Now, the energy transition has opened up competition even further. This includes nontraditional companies offering access to clean energy like rooftop solar, battery storage and electric vehicle charging or to new technologies for tracking and managing energy use. The competition isn’t just from new market entrants. Adjacent industries such as chemicals, technology and automotive are entering the picture with products and services that can directly compete for the wallet share of families and businesses during one of the tightest economic times in history.
While new competition exists, the energy transition presents a chance for energy and utility companies to strategically reinvent — taking advantage of new business models emerging from within the energy ecosystem of tomorrow. Companies should consider what customer attraction opportunities could arise from becoming more of an energy platform player, value chain specialist, energy data broker or energy-as-a-service provider.
Customer attraction is derived from two separate but equally important parts — capabilities attraction and values attraction. Values attraction comes from creating and acting on an inspiring company ethos that aligns with your customers’ values. Capabilities attraction relates to how you deliver on those values while serving your customers. Within the energy and utilities industry, we see several actionable ways to achieve greater customer attraction across both dimensions.
The move towards cleaner, more sustainable energy sources has been underway for years, accelerated by many factors including environmental, social and governance (ESG) goals, public-sector support and stakeholder pressure. Our Consumer Intelligence Survey found that 80% of consumers are more likely to buy from a company that stands up for the environment, with over half saying companies should do more to advance environmental issues. Chief Marketing Officers are taking note. In the November 2022 PwC Pulse Survey, 90% of CMOs said they are increasing communication to the marketplace about their company’s purpose and values.
Because energy and utilities sit at the heart of the decarbonization movement, the correlation between what you’re doing to support the energy transition and the impact on customer values attraction is impossible to ignore. The role your company chooses to play in that movement, and how it’s executed, will be a key factor to future success.
80% of consumers are more likely to buy from a company that stands up for the environment
One power and utilities company wanted to find and attract value-seeking customers. PwC helped the company locate customers – at the ZIP Code level – who wanted to reduce their environmental footprint. We worked with the utility to develop a subscription-based solar offering to meet this customer desire. When the program rolled out to targeted customers, the product sold out in hours, creating enough demand to support building even more solar installations in the community. The takeaway: Green messaging is not enough, unless you back it with action.
So, how can you ensure your efforts to decarbonize and build a better tomorrow are heard? Evaluate if you have the right marketing strategy, tools and execution to promote the positive change you’re helping to drive in the world — or risk possibly losing the favor of values-focused consumers.
Just as essential as having a well-aligned and marketed set of company values; energy and utilities should also focus on transforming and modernizing core customer capabilities — bringing values to life in new ways through customer insights, personalized digital experiences and other means. The PwC Customer Loyalty Survey highlighted how customers expect more from their interactions with you. As an example, four out of five customers, or 82%, would share personal data for a better, personalized experience.
This underscores the importance of looking inward at the core capabilities essential to running your business. For utilities, this could include starting and stopping service, billing and rates administration, field service scheduling and dispatching and customer preference management. For energy companies, it could mean looking at your customer loyalty rewards programs or competitive pricing.
82% of consumers would share personal information for better experience
Historically, gas stations obtained customer and competitor insights primarily through manual consumer surveys and market research. It wasn't uncommon to physically drive around to gauge competitors’ fuel prices. PwC helped one gas station chain expand its data insights capabilities for an analytics-driven approach to fuel pricing. Now company leaders can more precisely understand the competitive landscape and use data to make near-real-time pricing decisions in order to attract customers. The takeaway: Tap into your data to drive profitability and customer attraction.
The ability to execute core capabilities in the most insights-driven, personalized and customer experience (CX)-positive way is essential for creating capabilities attraction. However, these capabilities must bring to life your corporate values. For energy and utilities this includes the deeply ingrained drumbeat of affordability, reliability, safety and a commitment to a sustainable, cleaner energy future.
Finding innovative ways to incorporate your values into routine customer interactions can take several forms. For example, if you start a customer’s electricity remotely instead of dispatching a truck, you could include a message on the customer’s first bill showing how much carbon emissions they helped reduce through smart meter technology. Or, you could expand your mobile payment app to include the ability to report safety issues, demonstrating your commitment to your employees and the customers you serve.
When it comes to customer attraction, you don’t need to go at it alone. Strategic reinvention on the customer front can mean considering new players in the energy ecosystem not as emerging threats but as possible strategic partners. This includes embracing service and product providers, key players in adjacent industries and other arrangements that help to bring new ideas to life, develop differentiated experiences and create new opportunities for customer attraction.
Customer Transformation, Principal, PwC US
Customer Transformation, Director, PwC US
Customer Transformation, Principal, PwC US