What marketing should mean to electric utilities
- McKinsey Co., Washington, DC (United States)
As the electric utility environment becomes more competitive, increasing numbers of executives are exhorting their companies to become [open quotes]market-driven.[close quotes] In companies that include Pacific Gas and Electric, Public Service Colorado, Northeast Utilities, and Southern California Edison, those words are being translated into successful action, and the utilities are discovering that some of the basic tenets of being market-driven run counter to what they have traditionally associated with marketing. For example: Customer value is not just driven by price/rates; customers care about service features, too; All customers are not alike; even apparently similar customers can have very different needs; Being market-driven does not mean being responsive to customers at all costs; it means meeting customer needs profitably. These utilities have learned that they achieve significant benefits by becoming truly market-driven. They have also learned that moving in this direction required a new understanding of what marketing means, as well as new organizational skills, techniques, and capabilities. Increased sales growth per se is not the objective of becoming market-driven. Many utilities and regulators have voiced concern about efforts to build sales, efforts that could mean higher costs for customers if expensive new generating and transmission capacity are required to satisfy increased needs. Whether increased sales are desirable really depends on individual company circumstances. The two principal benefits of being market-driven-namely, more satisfied customers and less spending to produce them-far exceed the out-of-pocket and organizational investment needed to achieve them.
- OSTI ID:
- 6049480
- Journal Information:
- Public Utilities Fortnightly; (United States), Journal Name: Public Utilities Fortnightly; (United States) Vol. 131:10; ISSN PUFNAV; ISSN 0033-3808
- Country of Publication:
- United States
- Language:
- English
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