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Sales & Services in the Utility Industry

Sales & Services in the Utility Industry

Energy retailers around the world face a similar set of challenges: decreasing demand, new competition, changing customer expectations, and regulatory pressures. To discover sustainable success amid such a complex environment, retailers need to embark on a major upgrade of both strategy and operations—and the sooner the better.

Maximizing value in the energy retail industry has never been straightforward. If retailers raise prices in order to increase annual revenue per customer, they encounter higher churn and only short-term revenue growth. If they seek out acquisitions as a means of increasing the number of customers, they have the promise of higher revenues in the future—but decreased revenues in the short term. Customer retention measures, likewise, will bring better long-term revenues but disappointing short-term results.

Energy retail transformation that addresses short- and long-term concerns requires an approach addressing three critical areas: overall retail excellence, digital energy retail, and noncommodity energy retail.

Energy Retail Excellence

Retail excellence requires the use of a range of improvement strategies focused on three areas: increasing sales efficiency, improving customer relationships, and building a solid retail foundation.

Increased Sales Efficiency

In order to build more efficient sales operations, retailers must address the following:

  • Contact center optimization
  • Collections management
  • Optimized web presence
  • Digital labor
  • Digital product

Improved Customer Relationships

Customer excellence for energy retailers means pushing capabilities to the next level, focusing on these five primary areas:

  • Customer value steering
  • Churn prevention
  • Advanced pricing
  • Cross- and up-selling
  • Voice of the customer

Strengthened Foundation

To build a solid foundation ready for the future, energy retailers must assess their current status and define their long-term strategy. They should start by benchmarking against other retailers and designing a sales and service vision. They must also evaluate their analytics capacity and sales organization for optimized structure and capabilities.

Digital Energy Retailer

As they face pressures on multiple fronts, energy retailers have no choice but to go fully digital. Consumer behavior is rapidly evolving, digital newcomers are disrupting the market, and data has become an undeniable pathway to success.

The advantages of going digital are many. When consumers can perform a task themselves and avoid a call center, satisfaction rises. Retailers can see increased margins after segmenting customers at a high level of detail and implementing price hikes based on those profiles. And digital retailers can reduce the cost to serve by up to 70%.

Digital technologies offer both challenges and opportunities to energy retailers. Many traditional energy retailers have responded to the threat from digital newcomers incrementally. Instead, they must be proactive and use their strengths while they can to digitally transform their businesses and pursue new growth opportunities.

Noncommodity Energy Retail

To increase margins and retain customers, energy retailers need to reach beyond commodities and explore sectors adjacent to their own. These include:

  • Distributed energy, such as solar PV, cogeneration, and community DER, and associated services
  • Demand management, such as energy efficient products and services, demand response (to aggregate load curtailment and “behind the meter” generation and sell it to energy markets), and collaboration with storage providers
  • Energy services, such as electric vehicle charging, HVAC offerings, peer-to-peer energy trading, and the creation of smart cities, connecting urban infrastructure to grid operations

Utilities can use call centers, for example, as one-stop-shops for home, energy, and other related services. And they can collaborate with other companies to provide smart-home and security devices, providing cheaper prices to customers through the strength of their bargaining power.

Learn More About Sales & Services in Power & Utilities

Meet Some of BCG’s Experts in Power & Utilities Retail

BCG’s consultants and industry experts focusing on the energy retail sector partner with leading corporations to face today’s multiple challenges and bring sustainable competitive advantage. These are our experts on this topic.

  • Leads BCG’s Operations practice in Iberia
  • Networks and infrastructure growth and asset management
  • Retail and customer operations for utilities and telcos
  • Customer experience and contact-center operations
  • Regional practice area leader of Western Europe and South America
  • Downstream oil and gas and petrochemicals
  • Leads BCG's global work in retail and marketing for oil products
  • Commodities trading and risk management
  • Leads BCG's Energy practice in Australia and New Zealand
  • Leads BCG’s green energy topic in Asia-Pacific
  • Established BCG's Network Transformation Services (NetS) to focus on transformation of electricity network businesses
  • Green energy and the environment
  • Leads BCG’s work on retail in energy
  • Go-to-market strategy
  • Customer experience
  • Sales force optimization
  • Leads BCG’s Houston office
  • Strategy
  • Change management
  • Operations
  • Energy sales (B2B and B2C)
  • Sales and service benchmarking
  • Digital in sales
  • Churn management
Power & Utilities

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