A utility CEO sees the light
I’ve spent a lot of time with utility executives. And it’s rare for me to hear one who really, really gets it about the customer – that is, what the customer wants and what utilities are really selling.
I heard one last week.
Leo Denault, CEO of Entergy, addressed an intimate gathering of utility strategy folks at the EEI Strategic Issues Roundtable last week, and I thought some of his comments were worth sharing:
“Technology isn’t going to send us into the death spiral.”
His point was that utilities spend an inordinate amount of time focused on technology, how will they be beat on technology, how they need to step up their game on technology. It makes sense – utilities ARE getting beat on technology. But it’s not about the technology; it’s about what people can DO with the technology. If Alexa can turn up my thermostat on command or, better, Nest handles it without my even having to ask, now I’m free to not think about it and focus my attention on one of the other things screaming for it. My life is better. And that’s what Leo said, “… focus on the customer experience, not on the technology.” It’s just a means to an end.
“The value of our service is not the electrons, it’s what customers do with them.”
They buy lights, they buy heat – they buy a way of life. Leo counseled the group to think about what customers are doing and how energy companies can enable that vs. getting in the way of it (my words, not exactly his).
“Amazon buying Whole Foods was a real wake-up call for us.”
As I’ve written about before, many traditional, conventional industries have/are undergoing disruption, and the utility industry is ripe for it. Who could have predicted 10 years ago that Amazon would be in the grocery business? The television production and delivery business? Ten years ago, who could have seen Airbnb, Uber, etc. coming? Utilities make 20- to 30-year plans … what can’t they see coming in the next five to ten years that will have a more efficient way of enabling our lifestyles and force them to rethink those plans? What if they went ahead and re-thought their plans now?
“What’s the industry missing?”
Leo made a point about restaurants – that what they missed in all their polling, in all their work to enhance the customer experience in the store is that 30% of consumers never wanted to be in the restaurants having dinner in the first place. It was a means to an end – the family needs to eat, they didn’t have any ideas (or ingredients) for a meal at home, so they wound up going out to dinner. Blue Apron, HelloFresh and PeachDish picked up on it, created a new category and business model and took a bite out of the restaurant business. Now, Shelton Group’s data has indicated for years that about a third of utility customers would happily buy electricity from someone else – and a majority would buy from a non-utility – if they could. In deregulated markets, we haven’t seen those kinds of numbers … but I think it’s because we also haven’t seen the equivalent of a BlueApron or an Uber. That true disruptor who makes it easier for me to have my lifestyle (meaning, run my computer, make my home comfortable, light up my house, etc.) just hasn’t appeared yet. My bet is he/she/it will in the next five years (and to some degree Elon Musk fits that bill … in my view he’s only getting started).
So, if you work for a utility and you’re reading this…
Start focusing on what your customers really, really want, then metaphorically “break” your company and rebuild it from a blank sheet of paper – and build a company people really value and want to buy from. That’s your best bet for warding off the disruptors and thriving in the future.
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TAGS: Efficiency & Conservation, Energy & Environmental Marketing, Energy & Renewables
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