by Penni McLean-Conner
With the recent release of the J.D. Power and Associates 2007 Electric Utility Residential Customer Satisfaction Study, many utilities no doubt will be interested in benchmarking with the best-in-class companies to identify improvement measures. By benchmarking, they can review, analyze and compare key metrics to help them identify areas where performance can be enhanced.
When benchmarking, Robert Camp with the Best Practice Institute suggests choosing “leading companies that are good at what you need to be better at; it’s a learning process.” Benchmarking performance involves metrics and the identification of best practices; best practices identify those factors that enable an organization to perform at its highest level.
Here are some quick tips to make the most of your benchmarking effort.
Clearly define your purpose and scope. Benchmarking, done thoroughly, takes a great deal of time and resources. Some benchmarking efforts require upfront fees in order to participate. If you are going to spend the effort and dollars, then you should be clear about what specific areas you are going to benchmark.
Define with whom you are bench-marking. Utilities often benchmark against utilities with similar demographics and customer bases. Benchmarking against like peers identifies how you stack up against them, but another avenue is benchmarking against other types of companies. Benchmarking against retail, banking or other industries can reveal transformational ideas and practices.
Identify benchmark metrics and the definitions of each of those metrics. Keep in mind that the more metrics there are, the more comprehensive the analysis will be of a company’s customer service performance. The more robust the benchmarking study, the more resources will be needed to complete the comparison.
Include metrics on cost, quality and customer satisfaction. Each of these areas is important to measure in and of itself, and also combined. For example, if a company is trying to understand how important service levels are to customer satisfaction, it is good to have both the metrics on customer satisfaction and service levels to determine the impact of lower service levels on customer satisfaction. Ideally, when looking at the data, finding situations where the cost is low, quality is high and satisfaction is high will likely reveal a best practice.
Gather benchmark data and scrub for abnormalities or input errors. Data abnormalities are situations where the data deviates significantly from other companies participating in the benchmarking. Scrubbing the data is best completed with a group of representatives from the participating companies. This supports quick analysis and understanding of what may have been included or not included in the data provided.
Explore more than top-quartile performance. With the data scrubbed, it can be sorted and what’s discovered, acted upon. Cutting and slicing the data into multiple views can be very revealing. Too many times, companies just look at the top quartile. It is just as important to understand the range within the quartiles. In some cases, the difference between top and second quartile may be very small.
Identify significant gaps in your performance against others. Focus on the companies and process areas where the cost is low, quality is high and customer satisfaction is high as compared to your performance. Those are clearly areas for improvement.
Avoid becoming defensive. When benchmark data reveals poor performance, there is a tendency for managers to get defensive. They will begin to identify the many reasons that there are differences in the data, taking time away from quality discussions on best practices. Upfront training and communication on benchmarking and the process can help mitigate defensive situations.
Shoppers in a mall. Benchmarking against retail, banking or other industries can reveal transformational ideas and practices.
Utilities that deliver excellent service to their customers do so through defined, consistently delivered processes. The best utilities are constantly measuring their performance and looking for ways to improve their service to their customers. Benchmarking is an excellent tool to use to identify performance improvement opportunities.
Penni McLean-Conner is the vice president of customer care at NSTAR, Massachusetts’ largest investor-owned electric and gas utility. McLean-Conner, a registered professional engineer, serves on several industry boards of directors, including the CS Conference, the Consortium for Energy Efficiency and the Massachusetts Technology Collaborative. Her first book, “Customer Service: Utility Style,” has been published by PennWell Books.