Savvy shoppers wait in anticipation, while Australian retailers are gearing up for the onslaught. Amazon’s arrival is imminent.
Innovation requires creativity but won’t succeed unless it’s also backed by strong execution, consumer focus and a change-ready company culture, Ergon Energy’s group manager of retail customer experience and marketing claims.
“Innovation means a number of things: It’s a mindset, but also the way you engage the business,” Brett Milne told CMO.
“There are lots of innovators out there who fail on execution and their ideas never see the light of day. You need to be creative and look at new ways of doing things, but also be able to execute and take ideas to the market as a commercial product or community need to fulfil.”
Milne is one of three speakers debating the state of innovation in business, brand, product and digital at the next ADMA Queensland 30Below network night on 1 July. He currently oversees marketing, product, pricing and customer experience for Ergon’s retail division, which was established in 2012. Milne has also been a director at a number of startups, and was previously head of marketing at AAPT and head of product development at Telstra.
According to Milne, digital’s impact on innovation, as well as the marketing discipline, directly correlates to customer demand for lower-effort experiences.
“Whatever we do from a marketing or customer experience perspective, it is about driving the outcome of less effort for customers,” he claimed. “That could be the ability to engage customers wherever that customer needs to engage, or making engagement with us simple and easy. Digital is allowing us to do that and at the same time is forcing us to – it’s a push-and-pull effect.”
The energy sector has been significantly disrupted by digital. Milne pointed out it’s not only changed the way people use energy products and services, it’s shaken up the way consumers interact with energy providers.
“In our patch, we’ve had 20 per cent of residential customers put solar panels on their roofs, totally changing their energy consumption,” he said. “Some are using it to make money, others to save money, and that means there are a lot of different dynamics to cater to. On the flip side, the data and digital nature of that, particularly in the way we market and get feedback from customers, is significant.”
Milne’s marketing and CX team is spearheading digital change and helping the wider Ergon business understand the benefits of digital on product innovation. It is also positioning digital as a new-found avenue into how customers are engaging with energy products and services.
As an example of how customer engagement has dramatically altered thanks to digital, Milne pointed to outage management.
“Traditionally, the only way you could tell us the power was out was to ring the call centre,” he explained. “During cyclones, customers can now log online, and mobile devices are our biggest content point during a cyclone.”
Ergon now offers a cyclone-related app, which uses GIS data to look at where customers calls are coming from, where fallen wires have occurred, and how customers relate to where a fault might be located. All of this enables customers to better plan around that event. Milne said it’s a great example of how digital helps companies provide richer information to the market.
“Customers can now see events on the map, for example, and can send in photos of the damage, so field agents know where to go. It changes the whole dynamic in the customer service relationship,” he said.
Shifting from product to value
It’s also an illustration of the shift marketing is making from product and selling, to value and customer experience.
“We will deliver products, but they’re either about the customer experience or delivering value back to the customer,” Milne said. “Knowing more about that energy customer as they have these issues is the common goal we use to solve that problem.
“The whole evolution of solar is the biggest change and this is customer driven. Once upon a time, we would have rolled out new technology because it’s good business, now it’s because the customer wants it. We look at how we deliver it and how we bundle that up so we can deliver on what customers are trying to get out of it, while still providing a reliable energy service to their house.
“The interesting thing is that creates a lot of information that we can use to manage customer relationship and service, something energy businesses haven’t ever been able to do before.”
It hasn’t been easy, however, and marketing, product, CX and pricing teams have had to become savvier around the fast-changing nature of technology as well as types of technology disrupting the energy mix, Milne said.
“We had to bring in new product people, and in our marketing team we now have product engineers sitting in our function,” he said. “You wouldn’t historically have had these skills outside depots but we now need them in marketing. Our CX team are trying to… deliver better outcomes to customers, while the pricing guys are trying to adjust the traditional way of doing pricing to how to manage risk around these new models. The whole team has also had to evolve how to do things and operate faster.”
Adopting the principle of co-creation is one way of ensuring value around product innovation. Milne said Ergon is piloting several new pieces of technology within customers’ homes, allowing end users to test and provide feedback on usability.
“We also run social media sites so the community can share feedback and insight,” he said. “So we’re trying to understand how customers are going to get value, otherwise it’s not worth doing.”
Tips on how to innovate more effectively
Milne’s first piece of advice to organisations struggling to foster innovation is to “free people up”.
“It’s about creating space for people to think and to puzzle things out for themselves, and giving them opportunity to access the information,” he said. “Many companies hide the data, whereas we’re trying to share it. It’s about giving people permission to play.”
Milne’s second piece of advice is to allow your teams to fail. “The more you can do that quickly, the better off you are,” he said.
“That process of working quickly and getting prototypes out to customers in a couple of days to see if it does or doesn’t work is critical to being successful as an innovative business. You can’t afford to sit there with a nine-month window and say we’re going to do this. Yes, you need that time to get a robust product out at the end of the day so the experience is what a customer is looking for, but you also need to iterate and get there quickly by constantly referring back to customers.”
The issue is that most organisations are built on the premise of managing risk and are therefore afraid to change, Milne said.
“Many organisations don’t want things to change because it creates risks that are more difficult to manage,” he commented. “The real challenge is to allow your business to take a risk. In our retail business, we have an aggressive change program and we’ve asked our front-line people to be embedded in that change program so they learn to be adaptable and can change.
“We’re trying to create a culture that is change ready - most organisations don’t do that. They think they can introduce innovation processes but they haven’t created a culture that accepts change.”
In addition, Ergon is working with startups to foster a number of ideas around technology and things that need rapid development.
“Startups play an important role in getting product development, allowing freedom of movement, prototyping and working with customers,” Milne said. “It’s critical to build a platform to enable startups to engage with corporates”, adding that such rapid innovation is often hard to achieve with just an internal IT juggling other pressing priorities.
To further drive home the importance of customer engagement, Ergon has introduced several top-line metrics including cost to serve, NPS and customer satisfaction.
“We are evolving our focus on the types of measures that actually tell us what customers think,” Milne said. “We’re building a system around NPS to enable us to take advantage of it and what we are doing, as well as what the drivers of the score and levers are.”
It’s not easy to get these things right. Milne said the important thing is to measure regularly and have conversations around those measures frequently.
“You also need to get leaders around the table to talk about the measures and drivers, deep dive into each and discuss the impact on the customer,” he added.
Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu