A Threat and an Opportunity
Existential threats can come in multiple forms, such as new competition and new business models. For energy providers, the key changes in their ecosystem are driven by innovation (such as electric cars) and customer expectations established by the likes of Amazon, Uber, and Apple. Success in this new ecosystem will require utilities to shift from a product orientation to a customer experience orientation, and will also necessitate the ability to build partnerships to deliver new services that meet customer expectations.
As one example, consider how the video rental business has changed from Blockbuster and other brick-and-mortar stores to the current incarnation of Netflix and Redbox kiosks. In the energy world, a service could be “72F and bright inside the house year-round for a fixed fee per month.” New players like Tesla and Ambri are challenging conventional thinking to deliver just that.
As utilities adapt to this unfamiliar environment, many are forced to rethink the fundamentals and reshape their conventional business models by examining the following:
- What they want their company to look like in 10 years
- How they can better understand and engage the customer behind the meter
- How they can reinvent their brand to make it more compelling to the communities they serve
- How they can work with governments and regulators to enable conversations with consumers that will help them better understand energy prices, conservation, and safety
Active engagement between utilities, governments, regulators, and consumers is required to overcome the frustrations that result from the price paradox. Utilities will need to lead efforts by influencing these stakeholders and transforming their organization to become more consumer-centric, drive consumer energy literacy, and inform government policy frameworks. Consumers expect all service providers to make changes through competitive market structures and a consumer service orientation.