As many small- and medium-sized businesses (SMBs) struggle to keep pace with sluggish consumer spending and rising operating costs, including energy bills, utilities have an opportunity to help fuel growth within this important sector, according to a new report by Accenture.
The report, The New Energy Consumer Handbook, says that utilities can help SMBs reduce energy costs and create new ways to attract consumers by providing advice and tailoring products and services to help these companies manage energy usage, reduce business complexity and appeal to “green-minded” consumers.
“In this era of economic uncertainty and fundamental change in the evolving energy marketplace, utilities have an incredible opportunity to engage these often-neglected SMBs, which have long been considered the backbone of economic growth,” says Greg Guthridge, global managing director for Accenture Energy Consumer Services.
In a survey conducted across nine countries, including a range of competitive and non-competitive energy markets, Accenture explored the energy needs and preferences of 2,200 SMBs and found that most are hungry for information and solutions to help them manage their energy costs. Only 35 percent of the respondents believe that the products, services and support currently offered by their utilities are specific to their business needs.
The research identified three areas where providers could better support SMBs while also generating much-needed new revenue streams for themselves:
Helping SMBs boost the bottom line: More than half (52 percent) of SMBs in non-competitive markets and more than one-third (37 percent) in competitive markets believe that utilities should help them better manage energy costs. More than half (52 percent) reported their electricity expenditure exceeds 10 percent of their annual revenue. In fact, in competitive markets, more than two-thirds (67 percent) of businesses reported they would switch providers if that would result in a reduced bill.
Tailoring products and services and aligning with SMBs’ business cycle: Many SMBs are looking to their utilities to help them manage energy costs, and they want tailored solutions, according to the Accenture report. As many as 87 percent of the SMB survey respondents believe it is important for utilities to offer solutions tailored to their business, and 53 percent said they would be willing to pay a premium for such services. As many as 74 percent said they are interested in products that would allow them to generate their own electricity, such as solar panels or wind turbines. Survey respondents said that one of the best times for utilities to approach their companies about new energy-related products and services is during the budgeting period for the year ahead.
Helping SMBs attract customers: While reducing energy costs is an important goal for many SMBs, driving revenue remains the top priority, and utilities can help them achieve that goal as well, according to Accenture. In a related survey conducted by Accenture with residential consumers across 21 countries, 76 percent reported that they would be more likely to purchase from a business that was certified as being “green” by an energy provider. And, 53 percent said they would be willing to pay a premium for shopping at a business certified as “green.”
Accenture’s research also makes it clear that when energy providers are engaging SMBs, it is critical they trust these companies. While the majority of respondents said their companies frequently take actions to reduce energy use, only 38 percent claimed to trust their utility to inform them about energy-saving options. Furthermore, 83 percent of the respondents said that if given the choice, they would consider a non-traditional energy provider, such as a retailer, energy broker, telecommunications company or online site for purchasing electricity, energy-efficient products or related services.
“Utilities that seize the opportunity to deliver a new experience to their SMB consumers, will not only fuel economic growth but also tap into valuable new revenue streams,” Guthridge said. “In competitive markets, they may also strengthen their relationships with SMBs, countering new entrants, who are increasingly entering the marketplace.”