Utilities See Benefits of Social Networking

Whether posting on Facebook or tweeting on Twitter, here are five tips to help utilities better engage customers via social media.

As a widespread phenomenon, social media is only a few years old. Yet it’s already started to irreversibly alter utilities’ relationships with their customers. The case of a Vermont blogger last August offers a bellwether of how the dynamics around consumer interaction have begun to change, and points to where they’re headed next.

On August 28, last year, tropical storm Irene unexpectedly veered directly into the Green Mountain state, dumping torrents of rain, causing floods that rapidly tore through towns, washed out bridges, and knocked out power. As the lights went out around him, a customer of Vermont Electric Cooperative (VEC), a smart energy utility company, blogged about his experience. On VEC’s website, the customer was able to see which areas were affected, and monitor when and where power was being brought back on line.

Despite being without power for seven hours, the customer’s praised his ability to monitor recovery efforts applauded the utility. Not long ago, that blogger would’ve had no other option but to call a customer service number, and likely run into frustrating delays, and potentially incomplete information. VEC’s site turned a potential rant into a very public rave.

These days, websites aren’t the only channel to the customer. Rather, for customer engagement, social media platforms such as Twitter, Facebook, and YouTube have, in just a few years, elbowed their way to the top of customers’ communications preferences—and for good reason. While a utility website is far superior to a phone call to help a customer find out vital service information, social media arguably outdoes the web in a number of ways.

First, there is the opportunity to push critical information when it’s most needed, rather than wait for consumers to fetch it. That is just the start, though: social media also offers a friendly way to engage customers’ daily information habits, with helpful information, account guidance and more. Though its penetration is concentrated in younger age groups, social media is growing fast, and offers an opportunity to open a new, more engaged face to new generations of customers.

Yet despite these advantages utilities are still coming to terms with the business opportunities multiplying in social media. According to a March 2012 study published by Gartner, utility executives cited a lack of clear business case or clear returns on investment as the toughest obstacle to adopting social media. What’s more, nearly half of utility executives surveyed cite this issue, roughly twice the share of executives in other sectors.

Though understandably cautious, utilities risk missing opportunities if they go too slow. Their customers are tapping into these networks at a rate that is growing faster than 80 percent per year, according to Pike Research. Meanwhile, other players—from name-brand retailers such as BestBuy to specialist energy-services providers—are angling to step into the relationship with customers.

Social media offers utilities a ready-made road to start engaging with customers more consistently and proactively in a cost-effective way. Yet the question about how to do so can be daunting. It requires investment in behind-the-scenes information technology and processes, in addition to finding the right mix of specialists to plan, deploy and operate these new services. Here are some key tips to help utilities find their way along this newly opened road.

1. Start with what you know. Social media efforts succeed best when used to enhance existing channels of customer interaction. For example, out west, Southern California Edison is finding that messages about safety are often the most forwarded posts from its Twitter (@SCE) and Facebook accounts. Other consistently hot topics are clean technology and information about outages. Building on growth in these groups, SCE is expanding its social networking via LinkedIn groups and YouTube videos, where it’s focusing on customer outreach on topics such as Edison SmartConnect, EVs, energy efficiency and demand response.  
2. Crisis communications, too. Whether from peak demand days or weather disasters, power outages can rapidly overwhelm call centers. As the Vermont anecdote reminds us, social networks can excel at broadcasting updates at low cost when they’re most needed. The information can even be targeted by area, address or individual account. To make the most of this, offer customers a clear hierarchy of engagement options. For example, only the highest-priority emergency messages are relayed via text to mobile devices, while informational and promotional messages may transmit via Twitter or be posted on a Facebook page.
3. Create a Dedicated Team. Understand, up front, that social media is not another self-service channel, where customers can scan a webpage to excavate answers. These programs link customers to one another, and set up an expectation that real, live personalities are communicating with them at the utility social media accounts. Under resourcing this team is a common error. During good times and bad, this team is critical to help monitor and quickly respond to the spikes of questions, complaints, and complements that surface.
4. Focus on the back end... As in any business, it’s critical to know your customer. Engaging with them more actively through social networks opens up the opportunity to pick up problems early, and capture input that might otherwise not make it over the corporate walls. But to optimize benefit from these communications, analytics are key. Using customer data and software tools, utilities must be able to segment and target consumers reliably and quickly, to deliver the right message at the best time.
5. … to help the front-end hum. Getting right the back-end data systems makes developing the interface that customers see much easier, whether it’s a website, Twitter feed, or Facebook posts. Before social networking efforts scale up, it’s important to ensure the website offers welcome, useful material to the new visitors that social media will attract. Is the site up to date, with recent, relevant content and a clear points of entry for consumers looking for a variety of information? The increased interactivity of social media opens up new possibilities for web applications, such as gaming and reward programs for households or neighborhoods to cut energy use. Facebook offers a community where consumers can crow about these achievements, and spur healthy competition with their peers.  Southern California Edison is teaming with IBM to implement a consistent customer experience that integrates the web, mobile and social channels.

To be sure, social media has its limits. Much as their baby boomer parents redefined cultural and commercial practices as they came of age, today’s millennials have driven the growth of social networking and will, over coming decades, come to comprise the bulk of tomorrow’s customer base. Utilities can’t afford to be shy about joining them online in social networks.

Michael is the Global Energy and Utilities Industry Leader for IBM Global Business Services.  In this role, he is responsible for the development and execution of the industry strategy. Vickie Dorris is IBM’s global solution leader for customer operations in the energy and utilities industry.