The UtilityXpert Series Part 1: A Sitdown with Jason Turner, ID Lab Global
In the UtilityXpert roundups, we typically find the industry’s best news and share it among our audience. This week ask industry experts and thought leaders a few questions and heard their answers on what should drive the utility industry forward.
We’re all busy and want quick reads that give us interesting and actionable things to think about so we’re keep it simple – two questions, two unique answers.
Our first instalment comes from a veteran marketer with over 25 years of experience marketing everything from fast cars, to rock n’ roll, to helping rebuild one of the largest online retailers in the world. His energy sector pedigree is equally impressive.
We invited Jason Turner, Co-Founder of ID Lab, one of the energy sector’s fastest growing marketing and strategy agencies, to kick off our UtilityXpert series.
He’ll be talking about the challenges of marketing for, and with utilities. Here’s what he had to say.
Often, utility marketing and communications is thought of as being far behind other sectors. They compare utilities to consumer products and services companies in the private sector and admonishing the utilities and citing their insufficient use of technology. Why do you think that is?
This perception of utilities is untrue and, in many cases, naive. Too often I hear ill-informed analysts labeling utilities as uncaring, unskilled or lacking innovation when it comes to marketing and communications. For the vast majority of the utilities ID Lab works with this is simply not the case.
Here’s the reality…utility marketers and communicators are trying to get by with what they have. It’s true most utilities lack the marketing technologies needed to effectively compete in what’s becoming a fast moving and competitive market (this market change is new for utilities) – this is undeniable and for the utility marketing and communications departments it’s very frustrating. They know there are better technologies out there, like EnergyX, that could make a world of difference to their marketing efforts. They want to innovate, they want to better target their customers and they want to be more efficient with their marketing spends. They get it and know the path they need to take. However, they have some big obstacles. Some of the biggest obstacles we regularly see at ID are:
IT Support/Capacity: Utilities are notoriously understaffed in IT. Asking IT to implement a new integrated marketing tool takes 1 to 3 years (optimistically).
Budget: Regulators of all types across the country are squeezing and scrutinizing how utilities use ratepayer dollars. Regulators often don’t understand what it truly takes from marketing and communications to motivate customers to save energy and change their behavior help to improve the utilities’ overall cost effectiveness so they are making spending on marketing technologies excessively difficult. Because of this regulator limitation, and other budgetary issues, marketing and communications departments struggle to get the funding they need to engage the technologies that will enable them to the job they know they need to do.
Implementers: Most utilities give the bulk of their program/product/service marketing to implementers and hope that the implementers are using the latest tools and techniques to effectively market on their behalf. Because the utilities are getting their budgets squeezed they, in turn, squeeze implementers which limits the implementer’s budget to spend on the latest tools and technologies. It’s a tough circle that both of them have gotten locked into.
Can these issues be overcome and, if so, how?
There’s no denying that everyone involved is currently in a, what seems to be, perpetual cycle that leaves everyone stuck with the dated status quo.
The good news is that there is a way out for most utilities: deploy SaaS-based tools. Specifically, SaaS marketing and targeting tools that are easily shared and managed across internal and external marketing teams.
I recognize the implications of what I’m saying, and I know that many of those reading this will immediately jump to obstacles like security, customer data privacy, legacy systems, IT department capacity, budget and a host of other obstacles. They are all, somewhat, legitimate but not insurmountable and quite frankly, inaction is not an option. We see the mounting competitive pressure on utilities and we also see that customers are becoming more disenchanted with utilities because most other companies are engaging them so much better than utilities can. Because we did s a lot of consumer products marketing in the private sector, we know what tools it takes to satisfy customers, so we share our utilities clients worry about the future of customer engagement. Also, marketing inefficiencies only get exponentially worse with inadequate tools/technologies because the resources required to compensate for those tools increases as market pressures mount making the TCO (total cost of ownership) untenable.
Look at businesses as straightforward as pizza companies. They have a fraction of the revenue and resources that utilities have yet their use of technologies (marketing automation, robots, self-driving deliver cars, apps, etc.) is lightyears ahead. Look at Domino’s – they’re so dedicated to using technology that they have an 800-person tech team for a company that is half the size of most utilities. Yes, they have simpler business models; so look at highly complex and data-sensitive companies like Blue Cross – same scenario – safely and securely exploiting advanced marketing technologies. Air travel, pizza, healthcare and a host of others are all successfully using modern SaaS-based marketing tools. Today’s reputable SaaS vendors have risen to the challenges utilities face when it comes to safety and security and have platforms that meet utility requirements.
When it comes to working with IT, that’s a tough one. Most utilities’ IT departments are understaffed so, and I don’t blame them, their immediate answer to new technology requests is “no” or “ok, we can put that on the schedule to look at next year”. One thing that’s worked for us are time studies. We work with the utility IT department, a vendor like EnergyX and marketing departments to look at what the TCO (total cost of ownership) is for the current technology compared to the proposed through examining how much time/resources is required to use/maintain the current technology versus the proposed. In the vast majority of cases the new technology ends up saving IT significant effort, time and money.
Surprisingly, cost often meets with the greatest initial resistance but is overcome the quickest. How, by proving out the MROI and/or ROI. If the utility has marketing program performance metrics (by channel), marketing-related costs, market potential, marketing technology support costs and a cursory understanding of consumer behaviour a MROI can be made between current and proposed technologies. If the marketing metrics are not readily available, a simple ROI can be calculated. In ID’s experience the new technology usually wins hands down.