The X Factor in the Power Market’s New Math

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How power companies are using experience management, or XM, to reshape customer relationships and reveal new revenue opportunities

Here was a company with one of the largest investor-owned electric systems in the U.S.-the owner of close to a dozen electricity distribution entities-and a strong desire to pursue new opportunities outside its traditional regulated business. Those ambitions were fed by research about today's energy consumers that company leadership found highly compelling:

• A significant share want energy-efficiency products and services, including electric vehicle charging, smart thermostat, high-efficiency lighting, and solar options.
• Many of those consumers want the convenience of being able to source, and get advice about, these products and services from the same companies that supply their energy.
• Being able to conveniently purchase not just a commodity but products and services that enable them to use that commodity more efficiently, and in ways that improve their lives, is but one element of the elevated experience that today's consumers expect from the entities with which they do business. Indeed, research from Capgemini found that 81% of consumers-and 73% of utility customers-would be willing to spend more for a better experience. Unfortunately, while most utilities, 79%, believe they are delivering a customer-centric experience, only one-third of consumers agree.

In those findings, the aforementioned U.S. electricity supplier saw an opportunity to improve the experience it provides to its customers, and to wed that elevated experience with an online marketplace in which it offers (via a new unregulated subsidiary) the kinds of lifestyle-oriented energy products and related consultative services for which consumers clamor: EV chargers for lease; a connected home plan built around a smart thermostat; even connected home audio/visual equipment.

Delivering all this to customers, and doing so via a seamless multi-channel experience across regulated and unregulated entities, would, the company realized, require a powerful digital platform capable of collecting and gaining insight from both business operations (O) data and experience (X) data, insight the company then could use to create positive experiences around its brand and its products, for its customers and for its employees. This is the essence of experience management:

X + O = XM

where experience from the first point of interaction with the customer and the employee, right on through their entire journey, connects directly to business outcomes.

A heightened focus on XM, beyond traditional concerns about service reliability, has been instrumental to the success of the aforementioned company's e-commerce product and service marketplace, helping to position it not only as an energy provider but as a trusted source of solutions and advice for energy consumers-in short, the kind of company with which people want to do business. With customers increasingly demanding additional value from their relationships with energy providers, there's a huge opportunity for power companies to expand their scope beyond delivery of an energy commodity.

And what happens if they do the job of trusted consumer ally well? When consumers have a very good customer experience (CX), they are 3.5 times more likely to make additional purchases than if they have a very poor CX, according to research by the Qualtrics XM Institute. In a world where companies are disproportionately rewarded when they deliver a great experience and punished when they don't, a utility company can increase its revenue by $476 million over three years (assuming a baseline of $1 billion in annual revenues) by modestly improving the experience they deliver to customers. In this particular case, what began as a trial balloon by a regulated electricity provider has in less than two years become a growing source of revenue, and a powerful vehicle for building customer and brand loyalty.

Given how heavily energy consumers value experiences, XM is becoming increasingly critical, not just to ensuring those trial balloons ultimately soar to find success, but to the long-term competitive standing of energy providers. Regulated or not, power companies must be able to create quality interactions and experiences along the entire customer and employee journeys. Once they gather the X and O data and synthesize insight from it, it's critical that they have in place a robust, responsive CX environment capable of translating that understanding into outstanding experiences. That's where the following digital capabilities become critical:

• The ability to provide a seamless omni-channel experience that gives customers convenience, control, and customization, taking advantage of new technologies like artificial intelligence (AI).
• The ability to listen to consumer feedback and interact with consumers in new, meaningful ways to build an XM roadmap that prioritizes what matters most to customers-what turns them on and what turns them off. For example, utilities today are using digital channels to trigger feedback from both customers and technicians after a service experience. Maybe there's a case where the customer tells the company that the service technician didn't seem knowledgeable on the issue that needed addressing, while the technician says he didn't feel adequately trained by the company to address that issue. Not only does the utility gain real-time insight into the key factors influencing service key performance indicators, it also can move promptly to remedy any customer issues while adjusting its training protocols to better prepare its technicians.
• The ability to use both X and O data sets to get quick, accurate insights into how to most effectively expand the direct-to-consumer channel and to implement programs that ultimately delight their customers. With XM capabilities, a company can capture feedback to better understand customer preferences around adoption of new products and services before they are introduced. If a large segment of customers were to tell a company in no uncertain terms that residential solar appeals to them, but only if they have the option to lease the equipment instead of purchasing it outright, the company then can tailor its business model and sales strategy accordingly. With machine learning and AI-driven tools, utilities also can use data insight to deliver highly personalized offers and bundles to customers to drive conversion and deepen relationships.

In an energy business where commodity margins have eroded and competitiveness relies increasingly on customer experience, XM is fast becoming a business imperative. As the large electric utility is proving with the success of its e-commerce marketplace, the insight gained from combining X and O data can lead in exciting new revenue-generating, customer-pleasing directions.

-James Eardley is a Global Director in SAP Hybris Industry Marketing and is responsible for demand generation in the utilities Industry.

The post The X Factor in the Power Market's New Math appeared first on POWER Magazine.