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Utility Marketing Strategies & Pricing Trends
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Marketing seems to have come out of the utility closet once again, but it is a far sight different from that of the 1970s. While some are still on a “sell, Sell, SELL!” campaign, most are soberly looking at their customers from a different perspective. They are concerned about losing them to other service territories or seeing them vanish to domestic and foreign competition. There is a sense of a “strategic alliance” being sought by the most proactive of utilities in which they become allies of their customers. In this sense, the issue of how much these customers purchased from them vanishes into the shadows of the more important elements of the relationships. Oh sure, there still are some pushing technology as the customer’s answer. And there are others using incentive and other rate gambits to develop strategic load building. But there is a definite trend emerging toward building the relationship for the long haul and putting short range profit or number game objectives on the back burner. This paper investigates the most successful current utility marketing postures, how they are changing, where pricing fits in and what we are likely to see within the next few years. We will also illustrate the potential traps in competitive marketing and customer service that still lie in wait. We still see a major number of current marketing efforts that are unbalanced, unfairly reward luck, are wasteful and counterproductive. As many of you know, we strongly believe marketing must move from technology-based, “silver bullet” competition, frenetic non-competitive load retention dissipation and load claiming to relational-based marketing in which absolute integrity and service and their consequent trust become paramount. We believe utilities must build honest relationships with all their customers, not merely their energy purchasers. These include their fuel suppliers and regulators. When a utility is not trusted, the competitive situation is reduced to that of a commodity supplier in which price and terms constitute the whole of the relationship. Utilities reduced to this level of inadequate customer service ultimately will lose to those that recognize the alternative of adding value. As the nature and consequences of competition increase, so does the importance of breaking from the methods of the past.
Gilbert, J. S. (1989). Utility Marketing Strategies & Pricing Trends. Energy Systems Laboratory (http://esl.eslwin.tamu.edu). Available electronically from