By automating communications, Aquila and Alliant improved customer service.
by Pat Whelan
The utility industry has an identity problem with its customer base. Ask the general public to describe the local utility company and you are likely to get few responses beyond generic rate complaints, anecdotes surrounding the last power outage, and occasionally, a heated discussion of why the lack of regional competition has led to poor customer service.
Given these poor—and often erroneous—perceptions, utility administrators are tasked with finding a way to improve the customer experience. It’s not just a nice-to-have ideal, it’s a business necessity. Consider this: When most utilities make their rate cases before their state commissions to have rate increases approved, they have to demonstrate a reasonable level of customer satisfaction. In other words, customer satisfaction has become even more fundamental to the utility’s business.
Of course, the other fundamentals can be just as difficult to achieve: reduced operating costs, increased program effectiveness and enhanced shareholder value weigh just as heavily on utility administrators’ minds. In addition to their primary responsibility of operating a functional and fiscally responsible energy provider, they must work to establish and maintain positive public perception.
Unlike many businesses for whom the CEO can become a public “face” of the company, utilities must rely more on a public “voice.” Customer call centers have traditionally served as the utility’s voice, with customer contact occurring most frequently around three specific activities: billing and delinquency processing, disconnects and service calls, including furnace and equipment inspections.
On the surface, none of these activities can be considered excellent opportunities to improve public perception. They are transactional in nature, and likely to create discomfort for the customer.
Billing and delinquency processing, which potentially lead to a disconnection, can be trying for all those involved. On one hand, it’s an embarrassing and awkward conversation for the delinquent customer. On the other, the call center agent must walk a fine line between generating revenue for the utility and handling the situation with diplomacy and tact.
Similarly, high seasonal demand for service calls such as furnace inspections, usually after the first cold snap of the year, make it a challenge for the utility to meet the needs of thousands of customers in a short period of time, creating yet another potential dissatisfaction point for customers.
In both of these scenarios, the traditional call center is ill-equipped to deliver the superior customer experience necessary to create a positive perception of the utility. Customers are looking for personalized, relevant conversations with someone who understands their preferences and can respond to individual needs. Contrast that desired outcome with what usually happens in a typical customer call center:
The customer experience is inconsistent. Depending on which agent a customer speaks with, the variations in tone, message, delivery and call flow can completely outweigh the consistent scripts the agents follow.
The agents don’t have enough time or attention to devote to each individual customer. Half of all customer service representatives in a traditional call center are talking, e-mailing or chatting online with another customer, with 25 percent of them handling up to four people at once.
Agents aren’t incented to provide a superior customer experience. One third of all call centers do not measure customer satisfaction, which means they aren’t able to reward agents for providing great service
Despite serving as the brand “voice” for the companies they represent, agent satisfaction isn’t deemed important. Half of call centers do not measure agent satisfaction, leading to low morale and low incentive to deliver a superior customer experience.
But things are changing. Realizing the limitations and challenges of the traditional contact call center model, many leading utilities are turning to technology as a way to not only effectively address their traditional business challenges, but also improve customer service and create positive public perception of the utility.
Improved customer service via automated communications: Aquila Energy
Aquila Inc., a Kansas City-based utility serving nearly one million customers in five states, faces the same challenges many utility companies face: improve revenue recovery, reduce account write-offs and disconnections, and—of course—improve customer satisfaction.
At the same time, Aquila has been getting back to basics, refocusing its efforts on its core business. The utility had previously relied on an outbound contact center of 40 agents based in Michigan to handle all collections efforts. As part of its process improvement initiatives, Aquila wanted to centralize its operations in Kansas City, which would either require relocating the staff or hiring and training 40 new contact center agents and supervisors, both costly and time-consuming propositions. Both choices meant building out the contact center infrastructure in Kansas City, another expense, considering the necessary investment in a dialer, hardware and telephony expenses.
For many utilities, the collections process is a good candidate for leveraging automation to reduce costs, increase cash flow and forego the capital expense of hardware and infrastructure. That was true for Aquila and its goal was to implement an interactive communication solution to contact customers prior to a disconnection notice and allow them to make a payment without involving an agent.
Aquila also wanted to reach more customers with fewer call center agents, earlier in the pay cycle, to reduce delinquencies and therefore, the number of disconnections. And, by presenting more choices and more personal dialogue, the utility hoped to improve customer service.
Aquila first developed a complex set of business rules to ensure each automated interaction would be within the regulatory guidelines of each respective state. Then the utility worked with its automated communications partner, Varolii Corporation, to create different communications protocols for different types of customers, long-time customers or new accounts, in an effort to reduce receivables without alienating loyal customers and inform new customers about payment options to encourage prompt payment. Aquila also created a set of automated communications for customers who were relocating and had already received their final bill to thank them for their business and reduce instances of late or no payments.
The business results were significant: a 39 percent reduction in account write-offs, a 34 percent increase in disconnect order fulfillment and improved customer satisfaction.
Aquila’s customers soon realized a benefit with this new solution in place. Now, they could make a payment at the push of a button by choosing the option to transfer to Aquila’s new IVR-based payment processing system.
Taming the disconnection challenge
The disconnection process is challenging for any utility. It’s even more so for Aquila, due to its many rural customers in a five-state service area. A round-trip technician visit costs anywhere from $75 to $125, depending on the location.
Due to sheer numbers, collections agents were unable to call through a daily customer list, which delayed disconnect orders and escalated disconnect volume. In fact, monthly disconnect volume was too high for Aquila’s field technician staff to handle, so only 65 percent of disconnect orders were actually fulfilled.
It was imperative for Aquila to resolve accounts earlier and to actually disconnect when trucks were rolled. Within the first few months of using an automated, interactive solution, Aquila realized significant results. With the solution acting as a supplement to agents for contacting customers just prior to disconnection, Aquila increased its contact rate, therefore collecting on more accounts, disconnecting fewer customers, and allowing field technicians to fulfill 99.3 percent of all disconnect orders.
The increased contact rate, about 15 percent higher than with agents alone, and resulting success in Aquila’s residential customer base influenced Aquila’s decision to expand the initiative to include its commercial customers. The utility now uses its automated solution to treat 95 percent to 98 percent of its commercial accounts.
Over time, collections managers noticed something else—customers appreciated the service. Aquila’s customer communications are consistent in volume, in treatment and especially in professionalism, tone and delivery.
Reducing seasonal service call variability: furnace inspection scheduling
Appointment requests always spike at the beginning of cold-weather season as utility customers prepare for greater furnace usage through the winter. These calls significantly strain field technicians and call centers, producing a surge in overtime that can prove extremely costly to the utility. The capacity stretch can also be frustrating for customers and the call center agents who speak with them, as long waits for service and complaints escalate.
Aquila soon recognized it could also use automated communications to respond to this issue, easing the pressure on its call center, spreading the workload of its field techs over a greater timeframe, and ultimately responding more quickly to the needs of its customers.
The utility proactively contacted those customers with service contracts or those who had scheduled previous inspections in prior years. The automated system allowed Aquila customers to schedule appointments, with the system checking available dates and times in real time. A final automated call sent a reminder to the customer that the service was forthcoming. This approach proved extremely successful, deflecting 15,000 calls seasonally, significantly reducing labor and overtime and benefiting the customer by helping them plan in advance for their needs.
Increased customer satisfaction
Aquila found that automated communications, in conjunction with traditional call center operations, helped the utility engage customers in an ongoing dialogue and meet its business objectives at the same time. The company has improved its revenue recovery rate, reduced its total number of disconnections and write-offs, and, perhaps most important in the long run, found the right approach to increased customer satisfaction, better brand recognition and enhanced goodwill among its customers.
Customer service for commercial customers: curtailment
Whether due to weather conditions, power plant problems or a transmission line overload, successfully managing unpredictable peaks in energy demand requires quick and efficient communication with customers, the key being that when a curtailment event becomes necessary, utilities can reach a large number of customers at a moment’s notice.
Alliant Energy serves more than 1.4 million customers in Iowa, Minnesota and Wisconsin. As part of its load management program, the utility offers reduced rates to commercial and industrial customers that agree to curtail their energy usage during peak periods.
When the program was originally introduced, Alliant used its sales systems support group along with proprietary light panel technology to alert customers of imminent interruptions. In states without panels, this manual process took up to four hours and offered no guarantee that customers were being reached in a timely fashion, which led to unnecessary fines and a perception of poor service.
Recognizing the need to collapse the cycle, ensure message delivery and improve customer satisfaction, Alliant Energy automated its communications approach to more rapidly deliver curtailment notifications to its commercial customers, gauge their ability to reduce consumption, and provide a complete audit trail of activity to ensure regulatory compliance.
Alliant has enabled its customers to indicate how, when and where they were to receive load curtailment notifications, selecting from a variety of contact methods—phone, e-mail, pager, SMS or fax. Recipients are even able to adjust their notification preferences based on their schedule, selecting different contact methods for different periods or times of day.
The goals for the system were ambitious and met within a short timeframe:
- Whenever possible, provide customers with at least an hour’s notice of an impending interruption
- Shorten the notification cycle from hours to minutes
- Eliminate the dependency on staff resources for manual calling
- Track customer response to ensure compliance with load management agreements
Since Alliant introduced the automated communications system, customer feedback has been decidedly positive, convincing Alliant to roll out a similar program for its natural gas customers.
While the unfortunate reality is that power plants can’t be built as fast as communities grow and businesses move in, load management programs and rapid curtailment notification systems enable today’s utilities to better manage the energy they are already generating and keep the lights on for their customers. (Visit www.elp.com for more articles on customer care.)
Pat Whelan is senior vice president, business development, at Varolii Corporation. He was more than 20 years of information technology management experience in sales, business development and marketing and provides guidance and direction to the company’s business development and consulting functions. In his career, Whelan has been responsible for building successful businesses, including start-up operations, reconstructions and mergers.