A feeling of energy communication déjà vu
Forty years into my career in public affairs, history may be repeating itself, giving me that Yogi Berra sense of “déjà vu all over again.” My experience has been in the worlds of petroleum and electricity, and both industries have had their episodes of public unhappiness.
Some 30 years ago the oil industry experienced big changes in customers and communications. Now it is that time for the electric industry. What lessons can be transferred from communicators in the oil patch to communicators with the electric industry?
Recall the corner gasoline service station (if you are of a certain age that is). The foundation of sales was one-on-one service and “TBA” – tires, batteries and accessories. Oil companies had a lock on what went into the tank, under the hood and onto the wheels.
Life was sweet and customers were fairly dependable. What could go wrong?
That business model flew apart. Customers’ options and preferences changed. Tire stores, fast lube shops and big box department stores stocked wipers, headlights and plugs. Service stations gave way to entrepreneurial convenience store owners opting for corndogs, Slushies and smokes. The recurring need for gasoline was married to a recurring desire for these non-automobile convenience extras.
Check out some benchmarks about today’s gasoline customer. A 2015 report from the National Association of Convenience Stores says that (1):
When buyers purchase gasoline, 35% of them also go inside the store;
More than one in three consumers would drive 10 minutes out of their way to save 5 cents per gallon;
Of consumers 18-34 years of age (who have the longest runway ahead as consumers), 42% went inside the store the last time that they purchased fuel, 36% bought a drink of some sort, 33% a snack, 24% cigarettes and 22% lottery tickets.
This is a far cry from the fuel, batteries and belts of the old service stations; it says something about price sensitivity, too. But beyond that is the loss of the sales floor of the vertically integrated gasoline delivery system that took the product from drill bit to pump nozzle at thousands of stations. Major oil companies formerly owned virtually all service stations, the points of intense consumer contact. Today they own less than 0.4% of all convenience stores selling fuel.
The electricity sector is learning the new language of a changing marketplace. That was driven home last August at the annual Electric Power Research Institute’s Summer Seminar, which looked in-depth at “The Changing Customer,” and the crossroads of technological change and business strategy.
Two particular groups were there: Utilities and electric-oriented companies entering the electric sector business. The divergence of their market orientation was stark, both understandable in their perspectives.
Utilities provide electricity service that is safe, reliable, affordable, environmentally responsible, and have done it exceptionally well for decades.
New entrant tech companies aim at customer choice, convenience, control and comfort, and are doing it with products such as rooftop solar panels or smart thermostats seamlessly integrated with time-of-use rate plans or home security systems.Read full article at Intelligent Utility