Utility Marketing- Numbers Games, Technology Wars or Relational Marketing?

Abstract

Natural gas and electric utilities seem to be feverishly interested in expanding their business base, improving consumption load factors while attempting to preserve their customers' profitability. They have turned to technology for weapons in their battle, niche marketing in their plan and competitive selling in their posture. But are they missing the big picture? Where is the customer in all this? Does the customer see this as competition, service or a circus? Does current utility marketing thinking strengthen or weaken the customer-utility relationship? The purpose of this paper is to illustrate how utilities can market more effectively. With examples drawn from our experience serving 58 electric utilities across the United States, we will illustrate the guiding principles and potential traps in competitive marketing and customer service. Our conclusions indicate that most current marketing efforts are unbalanced, unfairly reward luck, are wasteful and counterproductive. We believe marketing must move from a technology-based, "silver bullet' competition, frenetic non-competitive load retention dissipation and load-claiming game, to a relational-based marketing posture in which absolute integrity, service and their consequent trust become paramount. We believe utilities need to 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, the importance of breaking from the methods of the past.