Thriving Under Pressure

By Jack Doueck

“What do they want from us?” says the COO of one of the largest privately-owned Retail Energy Suppliers after being fined millions of dollars and banned from marketing in another state. “We comply with all their rules, but these regulators feel that they have to slap us with a huge fine just to show that they are doing their jobs.” I was on the phone with this COO discussing how they can fight back and provide even more value to customers – but he feels like he is under siege.

This is the mood in the retail energy industry today. The New York Public Service Commission is “cracking down” on retailers that it feels are bad actors.  The PSC is debating whether to allow retail choice at all. The Attorney General in Massachusetts has gone even further and is recommending a full-scale retail ban. The state of Connecticut has already banned variable rate products. New Jersey and Connecticut are changing the rules and not allowing standard pass-through costs for fixed rate products. In five states (NY, CT, IL, MD, MA) there are efforts to eliminate retail choice for residential customers.

Additionally, the states of New York, Maryland, and Pennsylvania are requiring new cyber-security insurance and deciding whether to limit retailers’ access to consumer information and utility data systems. 

As my friend Natara Feller pointed out last month in her article for the EMC monthly newsletter no state is an island and legal proceedings on retail choice in one state have a domino effect on others. 

I have spoken with dozens of CEOs over the last few months and the one thing everyone agrees with is the goal for retailers in this environment: it is not only to ‘survive’ but to ‘thrive’ under this pressure.  How is this done? 

This is the theme of the 12th Energy Marketing Conference taking place on September 12th 2019 at the Midtown Hilton Hotel in New York City.

How are the best retailers thriving in this environment?

It is about defense as well as offense.  Defensively, REPS are proactively retraining and supervising their marketers and sales teams. This is about upfront and ongoing due diligence, working with counsel, and stay on top of compliance and regulatory issues.  Offensively, REPs are creating new products and services and winning customers’ hearts.

Let me tell you a true story about surviving and thriving under pressure. 

In 1989, Toyota launched a new Luxury car.  It was the first Japanese luxury car and its debut was surrounded by a media frenzy.   The launch involved 60 designers, 24 engineering teams, 1,400 engineers, 2,300 technicians, 220 support workers, approximately 450 prototypes and more than $1 billion in costs. The resulting car, the “Lexus LS 400”, had a design unlike any previous Toyota vehicles.  The LS 400 was praised for its quietness, well-appointed and ergonomic interior, engine performance, build qualityaerodynamicsfuel economy and value.

The Lexus LS 400 also won awards from automotive publications including Automobile Magazine and Wheels Magazine. BMW’s and Mercedes-Benz’s U.S. sales dropped 29 percent and 19 percent, respectively. 35 percent of Lexus buyers had traded in a Lincoln or Cadillac.

Within a few short months however, Toyota executives were faced with a crisis, as they found a serious design flaw with the car. They received two customer complaints about defective wiring and an overheated brake light. Everyone thought that this was going to be disastrous for a new car in the highly competitive and demanding luxury car market.

What did the Lexus executives do in order to solve their problem, to save their brand and overcome their adversity?  Studying what they did and the incredible results they had has led me to the six steps to overcoming adversity.  This is one of millions of case studies in how to bounce back, how to turn setbacks into comebacks, how to thrive under pressure and overcome adversity.

First, they sat together, cleared their minds, and accepted the reality of the situation: a faulty car and angry customers.  They faced into their adversity.  They accepted the reality – no matter how uncomfortable and painful it was at the time.

Next, they didn’t play the “Blame Game”.  They didn’t try to find a scapegoat.  They were forgiving of any engineer who made an honest mistake with good intentions. They accepted responsibility for the mistake as a team.

Third, they learned the lessons from the recall. They decided to take something with them from this experience.  They would learn how to transform this crisis into an opportunity. They did real research.

Fourth, they started to appreciate what they could do, what unique situation they were in.  They made a list of their strengths, their assets, their skills. They had generally loyal customers and a strong customer care team.  They had a skilled operational team.  They had a passion for excellence and perfection.

Fifth, they decided to connect with the customer in a sincere way.  They put themselves in their customers’ shoes and asked, “What would bring our customers delight? What could make them ecstatic?”  They asked themselves “What can we give our customers?”

Finally, the Lexus executives sprang into decisive action.  First, they sent out a polite, apologetic letter to all the new Lexus owners.  Then, they voluntarily picked up over 8,000 cars from the owners’ homes and left them with a loaner while the Lexus dealers quickly corrected the problem.  Each owner had his new Lexus back within 24 hours, freshly detailed and fully fueled.  They launched a 20-day operation to replace the parts on affected vehicles. This included technicians to pick up, repair and return cars to customers free of charge. They flew personnel around the country and rented garage space for owners in remote locations. 

One year later they did a customer satisfaction survey.  They found that a striking 99% of all Lexus owners said they would buy another Lexus based solely on the way that initial problem had been handled.

The response by Toyota executives to their crisis helped the Lexus brand earn recognition as the new standard in personalized service.  By 1991, Lexus had outsold both Mercedes-Benz and BMW to become the best-selling luxury import brand in the USA. 

The Lexus team proved to the world that every crisis has an opportunity hidden within it.  As Napolean Hill wrtote: “In every adversity there is a seed of an equivalent or greater benefit.” They turned their stress into success, their lemons into lemonade.

The Lexus story teaches us another lesson:  Even the most stressful, disappointing and seemingly unfortunate setbacks can be turned into great comebacks.

Today, the Lexus brand is marketed in more than 70 countries and territories worldwide and has become Japan’s largest-selling make of premium cars.

Retail energy providers today can learn a lot from the story of the Lexus. Thus our theme of this year’s Fall Energy Marketing Conference: Thriving Under Pressure.


Jack Doueck is the co-founder Advanced Energy Capital, LED Plus as well as the Energy Marketing Conferences.