To meet the ever-changing needs of customers, utilities are increasingly launching online energy marketplaces. However, with the average e-commerce site conversion rate between 2% and 3%, utilities remain a small part of an already crowded market.
To increase customer awareness and drive traffic, utilities are making bold moves to differentiate their marketplaces from the plethora of options in today’s e-commerce landscape.
“I think utilities are realizing that if they don’t bring energy efficiency solutions to their customers, somebody else will,” says Ryan Prestel, Vice President of Business Development at Questline Digital. “Utilities are looking for ways they can meet customers where they are and provide them with choices. They want to be thought of as trusted advisors that bring proactive solutions to their customers.”
Education meets e-commerce
According to Felicia Chiles, Marketing Director at FirstEnergy Corp., utilities should be thinking of their marketplace as an educational resource first and foremost — and as an e-commerce platform second. FirstEnergy partnered with ibex, a company focused on creating customer experiences, to build a comprehensive energy marketplace designed to guide customers along their smart home automation journey.
“When entering the marketplace space, we didn’t want to be a point solution like Best Buy or Amazon where a consumer purchases one thing and moves on,” Chiles says. “Our objective was to create a marketplace where our customers can go to a trusted resource to get more education about smart home automation and energy efficiency, as well as purchase products.”
Smart home automation is a complex topic — that’s why educational content is key to give customers the confidence to make significant purchases, such as a smart home security system. Marketplace resources can be purely educational or provide step-by-step instructions on how customers can install or use the products. FirstEnergy Home is sprinkled with in-depth content, including blog articles, interactive info graphics and video, to help answer common customer questions.
“eCommerce success requires more than just selling — it also requires giving back,” says Charlie Garcia, Chief Editor at WP Dev Shed, a website development company. “By assisting your target audience in finding answers to their everyday problems, you become useful.”
Build it and they will come?
While utilities are creating e-commerce sites with the best of intentions, marketplaces are not a “build it and they will come” solution. Before customers can visit a marketplace, they must know it exists in the first place. That’s why continued promotions are vital to increasing awareness.
“Utilities will wonder why they aren’t getting visitors to their marketplace. My question for them is, ‘Do your customers even know it exists? Did you do anything to educate them on the benefits and how to use it?’” Prestel says. “You can’t expect customers to find your marketplace and figure it out on their own volition. If you don’t make it easy for them, they will just go somewhere else.”
FirstEnergy Home is using blog posts, videos and info graphics to educate customers on marketplace products and how they fit into their daily lives. The content is shared in emails, on social media and throughout the website to keep the marketplace top-of-mind for customers. The utility also takes advantage of seasonal changes and important milestones, like moving, for relevant and timely product promotions.
“There are different ways to use smart home automation that customers haven’t really considered before,” Chiles says. “Back-to-school season, for example, is a great time to promote the benefits of smart home products to parents who have kids coming home by themselves. We invest a lot of time and effort into content and promotions.”
The power of personalization
Utilities are taking advantage of personalized content to reach segments of customers, whether renters, homeowners, new families or older adults. One example is sending marketplace promotions customized to renters with energy efficiency products ideal for apartment living. With the right message, utilities can bring value to a target audience.
“If done correctly, email marketing can be a very effective consumer interaction approach,” says James Rehm, Chief Operating Officer at Skuuudle, a retail analytics firm. “The aim here is not to email your customers, but to do it correctly and with the right message. Never go overboard.”
Utilities are also utilizing behavioral emails, triggered when a customer leaves a page, abandons their cart or completes a purchase. For example, when a customer purchases a smart thermostat from FirstEnergy Home, they automatically receive an email with information on the utility’s installation services.
“This keeps customers from having a frustrating experience and helps us manage returns,” Chiles explains. “Once they get home and find installation is a little tricky, they know we have a service available to install the product for them.”
Taking personalization a step further, FirstEnergy Home bundles certain products and services together to meet the unique needs of different customer segments. For example, the utility’s Energy Efficiency Starter Kit features a Google Nest, Google Nest Thermostat and Sengled Smart Wi-Fi LED light bulbs. “With our bundles, customers are able to purchase products and services that we know work well together,” Chiles says. “This makes it easier for them to get started with smart home automation.”
Customer experience expectations
Utilities are revamping their marketplaces to ensure customers have the kind of user experience they have come to expect from other e-commerce sites. For example, utilities are organizing products in easy-to-find categories, providing customer reviews, using abandoned cart emails and other e-commerce best practices.
“The consumerization of everything is upon us and utility customers expect the convenience, flexibility and choice that they are accustomed to in their everyday lives,” Prestel says. “Traditionally, utilities haven’t been able to provide a comparable experience, but that is changing. In the future, an amazing customer experience will be a requirement, not a nice-to-have.”
A key element of a quality customer experience is an easy-to-navigate, intuitive website that makes it easy for visitors to find products, services and educational resources. The more complicated an e-commerce site, the less likely customers will come back in the future.
“The easier a site is to use and engage with, the happier the customer will be and the more likely they are to come back to it,” says John Cammidge, Managing Director and Founder of e-commerce and advertising firm JTC Consultants. “Your site is a reflection on your brand, so it is vital that it functions fully in every format. Many businesses neglect to optimize their sites for mobile use, and this causes them to miss out. User-friendliness is crucial.”
According to Cammidge, using best practices in the marketplace checkout process builds trust and ensures a smooth and streamlined process. Additionally, utilities should be clear about shipping fees and other potentially hidden costs early in the transaction.
“This promotes trust and allows the customer to make an informed decision,” Cammidge says. “Limit the number of clicks necessary to complete the checkout and make the process as easy as possible for your customer. Putting the customer journey at the center is the best way to strengthen your chances of success.”
As more customers make smart home and energy efficiency purchases, online marketplaces will be an expectation going forward. Utilities must find ways to differentiate themselves from their competition and give customers the personalized experience they desire. With the right strategy and user experience, marketplaces are a great opportunity to provide value, be a trusted energy resource and improve long-term customer satisfaction.
“We don’t want to go toe-to-toe with the retail giants. That would be a waste of time,” Chiles says. “What we can do is play our own game… Offer products and services in a unique way and be a trusted advisor to our customers.”