It used to be that the household electric bill was a simple recurring monthly statement. Regulation gave customers confidence that they were being charged a fair price for their energy. The monthly price fluctuated in a predictable way. Customers got into the habit of setting up a recurring direct debit from their payment account and then not really thinking about it again. But forces are at work now that are causing household energy consumers to pay more attention to the details on their bill and to sense the fluctuations more acutely. So, don’t think your customers aren’t paying attention to the electric bill. Your customers are actually getting increasingly interested in the details of their bill.Three forces are contributing to rising attention to energy bills: consolidation of energy products with other cable and media services; more energy providers and more choice regarding what type of energy to buy; and an increasingly technology-savvy consumer.
In the next 12 to 24 months, industry deregulation will lead to continued consolidation among energy, cable, and media service providers, and, as a result, to a rapid diversification of product offerings by energy companies. As mergers and partnerships continue, the bundling of energy services with internet service and streaming content will be reflected as complexity on the monthly bill. Of course, customers have gotten used to a certain degree of complexity on their bill. They may regularly see supplier fees, distribution fees, taxes, alternative energy credits and these will be familiar line items. In some cases, the bill also includes gas or other non-electric utilities, complexity with which the consumer is generally comfortable. But the degree of complexity in the bill when it also contains Internet service, cable service, and streaming content services starts to get daunting. Not only that, the consolidated bill represents a significantly larger portion of the customer’s monthly overall budget when it includes bundles of energy and non-energy services. This compels customers to scrutinize their bill more carefully to ensure that they are being charged correctly for the products they’re using and that they are paying a price that is reasonable and fair.
The second force is also a product of deregulation. Consumers have more choices with respect to where to buy their energy and can reevaluate their choices more freely. As adoption of solar power and other alternative sources of energy spreads, consumers are also increasingly likely to generate their own energy. The influx of new energy providers and energy sources brings with it more than just competitive pricing. It offers consumers a broad assortment of bundled services from numerous competing brands. This leads to more frequent review of the recurring account charges, and more frequent interaction with the service provider.
The third force is that consumers themselves are becoming more technologically savvy when it comes to household expense management and budgeting. Integration between billing systems, checking accounts, and home accounting software allows customers to detect and respond to anomalies in their bill more frequently and with more accuracy and knowledge. It takes less effort than ever to pay close attention. This, again, leads to more frequent interaction with the service provider.
All this adds up to a more volatile market in which increasingly fickle consumers pay closer attention to the details on their utility bill and interact with their energy provider more frequently; in other words, more opportunities for the service provider to win or lose an account. Whereas in the past, it was the service provider who knew more about the customer’s account than the customer, a more informed and savvy customer base represents a new kind of risk to the CMO. The next game will be won or lost on customer service and customer experience. The successful energy company will have implemented a marketing analytics system through which they can record and learn from every customer interaction. The successful company will apply that learning directly to the benefit of the customer as well as to its overall marketing and sales strategies.
If you think your customers will remain ignorant in the face of these forces, you are in for a surprise.