The social media revolution - Why energy companies need to act now
November 30, 2012 3:29 PM
by AccentureThe social media revolution has tipped the balance of power from companies to the consumer, and the energy industry is no exception. So, how can the industry harness that power and gain an advantage?
A good starting point would be to ditch the misconception that social media is simply a new channel for engaging with younger customers and recognise its powerful potential to influence your brand, build trust, and help you understand what customers want. This will be key to creating innovative products and services that will make a real difference to their daily lives.
Accenture’s 2011 consumer research showed that a third of energy consumers are already interacting or plan to interact with their provider using social media. And whilst a generational breakdown shows that younger customers are much more likely to use this channel (50%), the 55 plus age group is also active on it (22%). Social media cannot be ignored in the shaping of brand and consumer strategy.
First, a company’s brand is no longer defined by what it says, but by what it does and, increasingly, by what others say about it. People have always been eager to vocalise their feelings about experiences with individual companies or an industry; nowadays they are doing it with a “digital megaphone”.
Moreover, the individual voice has gained significant power - 70% of customers now consult reviews or ratings before purchasing, which demonstrates that people trust the voice of strangers more than a company’s. Some companies are using this to their advantage. Both Verizon and AT&T use social media to interact with customers who are experiencing issues with their fibre optic broadband service. This means that if managed well and solved promptly consumer gratitude is also broadcast to the masses.
Secondly, there has been a significant breakdown of trust between energy providers and their stakeholders. According to Accenture’s research, 84% of UK consumers would not trust their energy provider to advise them on energy efficiency. This staggering statistic highlights the uphill struggle the industry faces.
One way social media can help is by increasing transparency. Social media forums with honest debate about issues facing the industry would positively influence consumer understanding of the challenges of providing energy. People are also more likely to trust a company if their executives are using social media - 77% of buyers say they are more likely to buy from a company whose CEO uses social media to clearly define company values and leadership principles.
Finally, social media presents a huge opportunity to better understand customers. By aggregating social media data on consumers and their energy habits, providers can understand products they want and ways to reinvent their approach to service. For example, 50% of consumers say that they would be encouraged to use social media if they received quick and convenient services such as responses to complaints or to find out about power outages.
But just listening to the social media buzz relegates you to a spectator in the future of your own brand. Companies must play an active role. Nearly half of consumers would be encouraged to join the conversation if an online community provided information about energy-related products and tips on how to reduce bills. E.ON has made a start by creating an ‘Innovation Community’ to gather ideas from consumers on ways they could be more efficient with energy use.
To harness the power of social media and to gain competitive advantage energy providers must engage in social conversations about key issues affecting their customers - one way communication may sometimes be necessary but it doesn’t shape perceptions. Companies must also put digital and social channels at the core of their customer communications because traditional channels are either dead or dying. And lastly, it’s imperative for companies to give customers multiple access points - make it easy for them to reach and interact with their energy providers and engage in conversations with other people about their providers.
Many industries are using social media as part of campaigns to be more consumer-focussed. Energy companies desperately need to make this shift and should act now.
By Greg Bolino, leader of Accenture’s management consulting work in the utilities industry.