Growing New Relationships
Ahmad Faruqui is a principal with The Brattle Group. He has worked for more than 140 clients on five continents and authored more than a hundred articles, papers, and books on energy economics. Henna Trewn is a research analyst with The Brattle Group. She supports utilities, energy companies, and government organizations across North America, Europe, and Australia on ratemaking methodology, renewable finance, market development, rate design, and business risk.
For decades, utility strategy has been dominated by an engineering mindset, focusing on the generation, transmission, and distribution of electricity. The customer has not played much of a role in guiding business strategy, even though it was the customer's consumption that delivered the revenues for utilities to stay in business and prosper.
Unsurprisingly, customers at various times in the industry's history have been called a load, a meter, or a ratepayer. Thus, customer research in the utility industry has often been carried out in a desultory fashion, as an afterthought, and has been underfunded.
Activities inside the customer's premises have been unglamorously dubbed 'behind-the-meter'. What if a retailer like Nordstrom were to describe what the customer does with their fashionable merchandise as 'beyond-the-cash-register'? Would any business survive if it had such a closed mindset toward its primary revenue-producing asset, the customer?
In 1960, Ted Levitt began his iconic "Marketing Myopia" essay in the Harvard Business Review with these words: "Every major industry was once a growth industry." He went on to say that industries that were once thought of as seasoned growth industries had stopped growing.
Levitt argued that in every case it was not that the market had stopped growing. The fault was with management that had defined the industry's boundaries too narrowly.