Kassel. The energy industry is undergoing major change. There are more and more providers on the electricity and natural gas market – and the resultant heavy competitive pressure is making life tough for municipal utilities and squeezing profits. Ingo Seeligmüller, Managing Director of NEULAND PR – NPR Strategische Kommunikation GmbH, explains in an interview with WINGAS what energy companies have to do to be fit for the future and why citizen participation and social media play a key role in that.
Mr. Seeligmüller, energy service providers have to realign and reposition themselves in times of fierce competition and new market realities. How can municipal utilities cope with this change successfully?
By developing new business models. Municipal utilities have to get away from the old, traditional model of a supplier. Electricity and natural gas have long since become a commodity. Since the markets have been opened, energy is sold by many different providers and competition has increased. That means municipal utilities have to think outside the box and go new ways, for example by entering the field of storage technology or offering services to a greater extent. If energy suppliers want to keep on earning money, they have to come up with ideas.
How long does it take to accomplish that process?
That's difficult to say. What's clear is that pressure will continue to grow on municipal utilities. That means such a process needs to be initiated swiftly.
What current trends are there in customer communication?
Basically, I regard digitization of communication and specifically social media to be one of the most influential trends. Social media has made communication more open, transparent and dialog-oriented. Municipal utilities should take this seriously and see it as a gain: It's never been easier to obtain feedback from the customer. Communication used to be from the top down, i.e. one-sided. Now customers supply direct input via various channels and you can put that information to wonderful use.
What advantage does dialog offer energy suppliers, in particular against the backdrop of greater customer wishes?
Social media gives municipal utilities a good indicator that very quickly tells them what makes a customer tick. That enables them to offer products tailored to the customer. In particular, smaller municipal utilities in a region can also join forces and get something off the ground together. Of course, the political will to do that must exist, but it may make sense with regard to their future positioning.
Municipal utilities have begun involving customers in individual energy projects. What role do such participation models play in strengthening customer loyalty?
In general, it's important to involve citizens, who are often also customers. Such projects give them the chance to support and help shape their region. In particular in the energy sector, these participation models are possible and also an economic factor. Regional value added is retained and the money that's invested benefits the city, town or municipality.
How should municipal utilities communicate these projects?
It's not so much about communicating individual projects, but practicing the values that have been defined and credibly representing them externally. Just about every municipal utility has enshrined its core beliefs, guiding principles and values in a mission statement. Municipal utilities must be aware of these values, live them and act in accordance with them. Otherwise they lose credibility. Values are really nothing other than promises. If I don't keep them, I break them and forfeit customers' trust.
Do you have an example of successful customer communication by a municipal utility?
I believe there's a raft of municipal utilities where there's an awareness of the new challenges in customer communication. Many are already implementing new requirements. In principle, customer communication must always be assessed individually for each municipal utility. Wien Energie is a fine example of the subject of social media – even though it's a large energy supply company. It began early on to use social media to supplement traditional communication measures and gear its own communication department accordingly.