The Utility Customer 2020


By Andrew McKenna, Managing Director, PwC US Power and Utilities practice

Andrew McKenna:

Change is all around us.  Technology continues to impact our lives at exponential rates.  Social media networks and mobile devices are changing the way we interact with the world.  Consumers and enterprises are becoming more energy aware and have more energy-related choices than ever before.  This new awareness has profound implications on the utilities that deliver that energy. 

A vision of the customer of the near future, called the "Utility Customer 2020," defines five potential fundamental changes in the utility customer base, and lays out key issues that utilities should consider to prepare for this change.

1. The Utility Customer 2020 will be digital, connected, and social

The term "digital native" was coined in 2001 as a reference to a person born or brought up during the age of digital technology.  By the year 2020, "digital natives" are projected to make up the majority of bill-paying consumers of energy in North America.  Add this to "digital converts" -- members of the prior generation who have spent most of their adult lives converting to the digital age -- and this number approaches 95 percent of the utility customer population. 

In just a few years utility customers will have dramatically different wants, needs, behaviors, and choice.  Will utilities be ready?

What does this mean for utilities?  It means that, potentially, the overwhelming majority of your customers will want their interactions to be online, mobile, and "in the cloud."  Your customers will rely on social media to share information with (and about) you.  They will demand instant access to information wherever they may be, delivered to and accessible by their mobile devices.  They will expect to have apps to make these transactions simple and convenient.

2. The Utility Customer 2020 will demand -- and receive -- greater choice

By 2020, utility customers will likely demand -- and receive -- more energy options than ever before.  Some of these options will be provided by the utility themselves: choice of energy supply ("green," retail supplier options through deregulation), new energy products & services (including energy efficiency), new payment options and methods, etc.  Some choices will come from elsewhere: meeting energy needs through "off grid" distributed generation and renewable sources, or energy management solutions offered by other enterprises that have a pipeline into the home or business.  In this scenario, the need to focus on customer retention – a prerequisite for survival for service providers in highly competitive industries – will finally come to the utility industry.  Utilities must determine where and how they want to be a part of this era of choice.  Alternately, if utilities are unwilling or unable to participate in the off-grid business model, what can they do to dramatically enhance the customer experience to stave off customer defections?

3. The Utility Customer 2020 will be empowered with information and the ability to self-manage energy usage

The convenience and capability brought on by technology and social networks introduces, for the first time, a utility customer that wants to -- and is able to -- be energy empowered.  Customers will have the tools and knowledge to manage energy usage at scale -- provided either by utilities or third parties.  Empowerment also implies self-service and instant access to information, delivered through channels that customers want.  More than 70 percent of customers prefer using a company's website over a call center, and that number is likely to grow as the digital, mobile generation expands.  And one could contend that even the notion of a "website" might be antiquated in a few short years, yielding to other mobile technologies.

The Utility Customer 2020 is not a distant, theoretical vision.  The transformation is happening today.

Utilities that provide their customers with access to information and empowerment tools will likely be better positioned to remain relevant and in touch with their customers.  A challenge facing utilities right now is determining which tools and information delivery capabilities to build, and how to do so in a cost effective manner.

4. The Utility Customer 2020 will demand a better overall experience

The utility industry has not historically been the most innovative industry when it comes to adopting new, customer experience enhancing technologies and capabilities.  As customers enjoy novel, technology-enabled experiences with other service providers in the retail, telecommunications, banking and insurance industries, they will expect the same from their utility.  To keep up, utilities should develop a better understanding of their future customer, focus on the overall customer, stay current with the latest trends and technologies, and use information to create a more personalized, one-to-one experience.  Failure to do so may provide opportunities for others -- such as telecommunications security, and e-commerce companies -- to disintermediate and become the face of energy management in the eyes of your customer.

5. The Utility Customer 2020 will continue to adopt technologies that will impact the energy infrastructure

Utilities should develop a better understanding of their future customer, focus on the overall customer, stay current with the latest trends and technologies, and use information to create a more personalized, one-to-one experience.

Renewables, electric vehicles, and customer energy management technologies are not new, but utility customers are adopting them at an accelerating pace.  Electric vehicle sales in the U.S. from 2012 to 2020 are projected to reach 1.8 million. While that may not sound like much, it stands to have a significant impact on electric utilities' load profile and on the customer delivery and service organizations that will support that demand, especially in regions where those sales are concentrated.  In addition, many states have renewable portfolio standards with targets focused around the year 2020, and more and more customers may participate in this trend by setting up their own distributed generation and selling surplus power back to utilities through net metering. Finally, the market for energy management devices and systems in home and commercial applications is estimated to double from 2013 to 2018, as residential, commercial, and industrial customers alike adopt these technologies and jump on the energy management bandwagon.  Utilities are not uniformly prepared for the impact of these technologies, and some will likely struggle to adapt -- and perhaps even survive.

2020 is right around the corner

The Utility Customer 2020 is not a distant, theoretical vision.  The transformation is happening today. Utilities should act now to better understand rapidly evolving customer needs and desires, and develop strategies, programs, products and services, and capabilities to meet these emerging needs.  Utilities should also reexamine their core operating model and enabling infrastructure to determine if they are up to the task.  Organizational structures, corporate culture, core business processes, and systems and enabling technologies will have to evolve -- or in some cases radically change -- not only to meet the need of the utility customer 2020, but do so smartly and cost effectively.


Click to enlarge. Credit: Andrew McKenna


About the Author
Andrew McKenna is Customer Experience Innovation leader in PwC's US Power and Utilities advisory practice. He has more than 25 years of experience helping organizations improve their customer services and engagement strategies, including managing complex organization-wide change initiatives, business process, and organizational redesign projects. He can be reached at