There’s a major trend happening in energy that is not measured in barrels or BTUs. Utilities are becoming much more focused on deepening their customer relationships. As state after state deregulates electricity, forcing utilities to compete with retail providers, and more efficient homes and emerging green technology flatten load growth, energy utilities have had to look within and figure out strategies to improve customer engagement.
And this customer base is changing. By 2025, Millennials will make up to 75 percent of the work force, as the next largest generation, the Baby Boomers, retire in droves. This means their buying power will only increase in the next decade. The 80 million Millennials in the U.S. currently spend $600 billion per year, a figure expected to increase to $1.4 trillion by 2020.
A Brookings Institute study identified key values of this generation that must be considered by companies wishing to successfully engage with them. These include an emphasis on corporate social responsibility, ethical causes, and stronger brand loyalty for companies offering solutions to specific social problems; a greater reverence for the environment, even in the absence of major environmental disaster; and higher worth placed on experiences over acquisition of material things. These can all make for better customer engagement.
The first truly “digital generation,” Millennials spend 90 hours a month using smartphone apps, and they have the greatest interest in smart homes, with 86 percent willing to pay up to 20 percent more in mortgage or rental payments for smart home technology, such as smart thermostats, according to a Wakefield Research study. They are also are interested in green energy, with 56 percent indicating a desire to incorporate solar panels, according to an Accenture consumer survey.
Digital Tools for Customer Engagement
Utilities are benefiting from offering tools for digital engagement including smartphone apps for bill paying and usage management, text and email messages, and a secure and accessible website experience. For example, offering an app that enables residential customers to view energy consumption in their homes results in better informed and more engaged customers who can help make grid operations more efficient.
As a utility’s core business of delivering power and maintaining infrastructure requires vast resources, partnerships with third party providers are enabling utilities to offer value added services and new products to help strengthen customer relationships.
Value-added services can fall under three main categories: energy services, home services and information services. Energy services can include items as simple as surge protection, lighting, weatherproofing or as complex as energy storage and electric vehicle charging.
Home Energy Management
Information services include home energy management systems, energy reports and real-time usage information that enable customers to manage consumption and costs through real-time data. Millennials, in particular, want their utilities to increase smart technology and renewable energy options. The above-referenced Accenture study also indicates that over 60% of millennials within the next 5 years want to sign up for a digital application to track energy usage and control home elements.
Home services is a developing market that includes home inspection, landscaping, emergency home repair plans and bundled services, such as home security systems. According to research conducted by HomeServe, those customers who received an emergency home repair plan through their utility rated their provider higher than those who didn’t have policies. In addition, 59% of utility customers surveyed who don’t currently have a policy responded that their opinion of the utility would be improved if they offered repair plans.
The time for utilities to raise the bar on engaging with Millennials is now. As technology continues to evolve and customers are looking for more than power, utilities have a great opportunity to deeply connect with this generation.
HomeServe, a leading provider of home repair service plans, partners with utilities across the nation to offer utility customers affordable protection from potentially expensive repairs of electrical lines, water heaters, HVAC systems and water and sewer lines. To learn more about a partnership with HomeServe, contact us.