Top customer service issues facing utility professionals

Jennifer Quay Allen, Chartwell Inc.

The past few years have seen utilities getting back to the basics. As such, there’s more emphasis on providing topnotch customer service and products related to the core business. Chartwell research reveals some recent issues facing today’s customer service and marketing professionals.

Balancing cost and customer service

When Chartwell surveyed 100 utility company call center leaders in late 2002, we found that, by far, their biggest challenge is balancing customer service with cost. (See Figure 1.)

Customer satisfaction was not a large issue for utilities 10 years ago, but once utilities started to recognize the value of customers, there have been three waves of general improvement initiatives:

“- improving access to the utility for better customer service,
“- offering more customer contact channels,
“- providing answers.

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Improving customer access to customer service usually means either increasing staff at a call center or adding additional telephone lines. The idea was to essentially get more customer calls answered and to get as many calls as possible. As part of this, utilities began measuring average answer speed, telephone service level, abandon rates, busy rates, etc. Some utility commissions started to mandate that utilities meet certain statistical levels.

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The second wave of customer satisfaction improvement initiatives was focused on offering more customer service channels, including telephone and Internet. Specific initiatives included electronic bill payment and presentment, e-mail as a form of customer contact and the outsourcing of high-volume outage calls. These efforts are still ongoing as more utilities implement Web-based service options, such as sign-up for service and online account history. These efforts alone, however, will not improve customer satisfaction.

Customers who call the company want resolution for their issues before they hang up the telephone. This idea, first-call resolution, means answering customers’ questions immediately without putting them on hold or transferring them and is the third and current wave of customer service improvements. The underlying requirement is integration to other systems such as outage and field services management systems. Integration streamlines efficiency by allowing the utility to tell customers when a service order would be complete, for example. Utilities can designate appointment times within more narrow time frames and can tell a customer when the lights will be back on.

This level of contact doesn’t just translate into call center or self-help Internet applications either. Although utilities have devoted significant budgets to developing customer service systems in the past decade, the field force has had little to no access to the wealth of information available to the call center today. Field workers can’t answer common and simple questions like “when is my next bill coming?” or provide program information.

Marketing green power

As more utilities launch green power programs, the challenge of selling green power falls to marketing professionals and customer service reps who must communicate a potentially complex subject to a large number of interested customers.

The rate at which utilities offer green power has grown from 22 percent in 2001 to 43 percent in 2003, according to Chartwell’s annual utility surveys. (See Figure 2.)

While utilities offer residential customers green power for a variety of reasons, one of them is that customers—from 35 percent to 50 percent depending upon the study—say they want, and will pay, for renewable energy. But when the rubber hits the road, that’s not always the case. Chartwell uncovered the take rates of dozens of utilities; they ranged from less than 0.5 percent to 3.8 percent.

Why the disconnect? The primary challenges utilities are facing when it comes to offering renewable energy are:

“- marketing and targeting customers,
“- concern over recent rate increases,
“- the difficulty in explaining to customers where their money is going and what they’re getting for it,
“- customers distrust of utilities’ green credentials.

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One of the more successful programs, SMUD’s Greenergy, uses a variety of communication strategies including bill inserts; call center contests and incentives; targeted direct mail; retail partnerships with local merchants like Starbucks, Jamba Juice, and The Sacramento Kings; third party endorsements; and regular testing of appeals, offers, list segments and production levels.

Utility customer contact technologies focus on efficiency

Utilities are continually striving to find ways to please the consumer, and technology can be an enabler toward that goal. Chartwell research finds that utilities have progressed with respect to innovation in their customer contact centers, and those innovations focus on efficiencies and self-service.

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More than half of utility companies have an interactive voice response unit (IVR) in place. Technologies such as interactive outage reporting and voice recognition in the IVR are also on the rise. More than half of utilities surveyed also report having online service options for their customers. (See Figure 3.)

While the idea of a totally integrated utility moves far beyond the service center, it is the technologies in the customer care operation that facilitate communications with the customer. By integrating IVRs and other communications technology in the call center with CIS and billing, outage management, geographical information and mobile workforce management systems, utilities should be able to reduce response times and increase productivity through improved communications of real-time information to customers, personnel and regulators.

Back to the basics when it comes to products

With an uncertain future and a shaky economy, utilities are seeing the wisdom in being discerning when it comes to adding new products or services to their mix of offerings. In late 2002/mid-2003, utilities have been in a holding pattern. While many are—or have been—offering a variety of products and services, few are adding new offerings, with only a pittance of utilities launching new products or services, and many fewer than usual considering various product/service offerings. (See Figure 4.)

Surge protection and outdoor lighting are leading the pack. These two offerings made it at or near the top of the following lists:

“- most profitable residential product/service,
“- most popular residential product/service,
“- most commonly offered residential product/service, and
“- most likely to have been added to the product/service mix of utilities not previously offering it.

In a back-to-the-basics move, 8 percent of utilities added outdoor lighting to their products/services mix over the past 12 months—this despite the fact that it’s already the most commonly offered residential product with 61 percent of utilities providing outdoor lighting. And, another 5 percent are considering this product offering.

What’s more, utilities are stepping up their programs, adding more types of outdoor lighting including various types of decorative and security lighting.

These issues and more covered at EMACS conference

These issues and others will be covered at EMACS, Chartwell’s 6th International Energy Marketing and Customer Service Conference & Expo, October 21-24 at The Rosen Centre in Orlando, Fla. For example, among the 40 sessions are:

“- “Balancing Efficiency and Customer Satisfaction” with a presentation from Joan Gamble, vice president of strategic change and business services at Central Vermont Public Service;

“- “Understanding the ‘Green’ Mentality” with speakers from The Natural Marketing Institute;

“- “Redefining the Customer Relationship to Drive Growth” presented by Nick Popielski, marketing intelligence manager with Atlanta Gas Light Co.;

“- Customer service and marketing roundtables covering such issues as customer satisfaction, green power, advertising and promotion, and key account management.

Allen is a research analyst with Chartwell, a utility industry research and information company that provides ongoing research series, research reports and other information via its energy library at also organizes the annual EMACS Conference and Expo.

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