CloudSense recently commissioned IDC, a premier provider of global market intelligence, to explore how CPQ solutions have evolved over the years beyond the typical “quote-to-contract” workflow, to a more comprehensive solution that can help energy and utility providers achieve three strategic imperatives:
1. Product innovation and personalization
2. Customer experience improvement
3. Operational efficiency
In our digital-first world, there is genuine interest among consumers to build a sustainable relationship with their energy suppliers, where their various needs can be met with multiple solutions.
But energy suppliers haven’t yet responded to this change in customer expectations. According to Associate Research Director at IDC, Gaia Gallotti “implementing CPQ is not at the forefront of energy and utilities companies’ strategies, which is a missed opportunity.”
Energy and utilities companies fall short when it comes to providing a consistent omni-channel experience and an efficient digital-first service. In order to meet the evolving needs of digital energy consumers, they must digitally transform their revenue and customer operations.
As a tool that supports and enables new operations and innovation, CPQ unlocks multiple efficiencies and opportunities, becoming essential for customers to be able to put together their preferred packages with flexibility. By implementing a powerful CPQ tool, energy providers can move away from being seen as a value-wasting organization, towards being the main point of reference for empowering consumers with sustainable solutions.
1. Personalization and Product Innovation
Energy suppliers are under pressure to shift from a pure commodity business model to one that combines commodity and non-commodity products and services. Consumers are demanding more and more from energy providers, urging them to become more than just suppliers to them.
According to Jean-François Segalotto, Associate Research Director at IDC, “in competitive markets the business of energy supply has changed to the point that selling energy is no longer the goal. If you want to be a credible brand as an ‘energy advisor’ the point is no longer selling more commodities to your customer.”
Energy and utilities companies struggle to capture demand from consumers as they lack tools to tailor and personalize their products. Currently, energy providers have large complex product portfolios, slowing down their product bundling, preventing them from innovating commercially, and leading to further dissatisfaction.
Almost half of energy providers have named product innovation as their number one strategic business priority in the next 24 months. By adopting a modern CPQ, energy suppliers are able to bring new products, targeted bundles, pricing and promotions to market quickly, meeting emerging customer needs and matching competing offers.
“CPQ is enabling mass-market personalization of energy and non-energy products and bundles for a larger customer base, becoming a quintessential part of CRM and B2C energy suppliers,” Segalotto continues. Through offering personalized and innovative products and services, energy suppliers are meeting consumer needs and demands, creating a dynamic and more satisfying relationship between the providers and the consumers.
2. Customer Experience
Utilities have always struggled with customer satisfaction, and there is an imminent need for utilities to offer a customer experience that meets the modern energy consumer’s needs. However, statistics show that energy and utilities companies have a low Net Promoter Score, with 25% of consumers switching periodically. With fragmentation and limited back-office integration across marketing, sales, commerce and service functions, utility companies recognize convenience as the number one driver for improving consumer experience.
With the help of a modern CPQ, products and services are made simultaneously available across customers’ channels of choice, improving cross-channel consistency. In reducing customer effort, improving services, and streamlining negotiation processes, energy providers are able to reduce their customer sale time by over 50%. Through simplifying a consumer’s buying journey, the modern CPQ supports flexible self-service, enabling energy suppliers to present personalized bundles.
3. Operational Efficiency
It is expected for utilities to be among the most operationally efficient industries, given that consumers immediately experience its service (e.g. turning the lights on and off). In their data however, IDC found that this was not the case, with only 20% of energy suppliers feeling that they are mature with regards to operational efficiency. To further add to this, consumers are not satisfied with the way they communicate with energy suppliers, with 64% calling in after failing to complete a task on a digital channel.
Modern CPQ systems are necessary to empower customers to do more with the help of digital self-service. CPQ has evolved from a tool that was mainly used to support B2B sales to one supporting product innovation and customer experience, with the help of a 360-degree customer view. It’s an increasingly integrated element of an energy supplier’s revenue operations, especially in a digital-first world.
“CPQ is part of a bigger movement away from meter-to-cash to a broader lead-to-cash or solution-to-cash process, accompanying the utilities’ shift away from only selling commodity to selling commodity on top of a whole range of other products and services,” concludes Jean-Francois Segalotto.