By Peter Warren, TELUS Energy Solutions
A growing supply of meter data is revolutionizing how people use and pay for the energy they consume. This wealth of information is already creating an increase in daily customer-utility interactions. According to a recent TELUS-sponsored white paper by IDC Energy Insights, “35 percent of utility respondents have seen an increase in customer call volume of between 10 and 30 percent. Companies that have not yet completed their smart metering deployment also expect an increase in customer interaction. A total of eight out of 10 companies expect increases in call volumes, especially at the onset of deployment.”
The Promise of Good Data
Dramatic change in the utility industry is being fostered with the advent of smart meters, smart grid and distributed generation, providing electrical utilities with powerful tools to manage power supply, respond to outages and gain efficiencies. At the same time, residential and commercial consumers are being empowered with solutions such as in-home displays (IHD), increasing their ability to proactively manage their energy consumption and carbon footprint like never before.
Forward-looking utilities are leveraging smart meter and smart grid solutions to differentiate their customer service and marketing strategies. The digital capture of meter data becomes a marketing asset, enabling energy companies to better understand customer consumption patterns and introduce plans and pricing to deliver more value to customers and better returns to shareholders.
Traditionally, most utility customers paid steady rates and did not see detailed consumption data or complex pricing fluctuations. Utilities have been able to manage customer service demands internally with a moderate staff of customer care agents using traditional methods such as in-bound phone. The default mode of outbound customer communications has been the bill insert. In the new energy economy, this is changing.
With the promise of good data, the challenge is that more engaged and educated consumers will ask their service providers more questions, putting a potential strain on utilities’ customer service capacity. To address this, utilities must begin to look at their communications infrastructure and customer services processes as an integral part of their smart system upgrade. But are utilities ready to take on this more holistic view?
Putting Customer Needs First
While meter and grid data is valuable, its true worth to a consumer will be unlocked only when the volume of interval or real-time usage data is converted into useful information that utilities can understand and interact with.
Historically, utilities, retailers and governments have identified new energy products or services based on technology and economics rather than on customers’ needs. For example, utilities know that many customers are concerned about energy costs. They want some kind of current bill calculation, but few appear willing to pay up front for the ability to see detailed or real-time data. This leaves utilities looking to drive maximum customer value from new infrastructure in a challenging position.
In many respects, consumers view a kilowatt-hour as a commodity product, much like long distance and local services sold by telecommunications companies. Innovation in the telecommunications sector came from the introduction of technologies such as the Internet, Web-based applications and moving from a product focus to solutions focus to serve specific customer needs. Gradually, people began to alter their behavior to match new billing models that encouraged consumers to use their phones on evenings and weekends rather than during weekdays. This was only possible with the ready availability of useful data along with the realization among telecommunications companies that they needed to be customer-focused first.
To maximize their client communication, telecommunications companies began to segment markets based on customer demographics, knowledge, needs, values, motivations, price sensitivity and other factors by using robust data analysis. The same technique can be applied to the new utility technologies. With a wealth of customer data available, utilities will develop a better view of their customer markets and will understand what is required from a customer service level.
The Customer Service Link
Customer service is closely linked to meter data management. Data from a customer meter is delivered up for customer presentment, along with associated cost data to support the customer experience. With the implementation of smart meters and new customer offerings, customer service and meter data management are two of the biggest challenges faced by utilities, accounting for one-third of the total responses. (see Figure 1).
According to the white paper, only three of the 60 utilities interviewed had invested in any of the following customer service strategies:
- Voice of customer research,
- Customer data analytics to identify patterns,
- Customer experience training,
- Contact center staff compensation linked to measured customer satisfaction, and
- Products and services development based on customer input.
Instead, most customer service investment to date is in software applications or phone systems.
Another customer service reality utilities face is online interaction with their customers. Today, the Internet is a preferred method of interaction for many customers. There has been little investment, however, in customer contact supplements such as live chat that could aid in the online service experience. According to the TELUS white paper, only 10 percent of utility respondents use live chat, and only 60 percent of utilities report having a Web portal (see Figure 2).
As utilities continue to implement smart metering and demand response programs, forward-looking utilities will find they can better manage these new customer care demands by having multiple and convenient communication channels to interact with their customers. Finding ways to use meter data to drive value to customers and remain competitive in this emerging new industry will require utilities to be more interactive, responsive and transparent with their customer base. Customers are expecting solutions that align with their preferences, including the option to communicate with their utilities using multiple channels including phone, e-mail, chat and now smart phones.
Customer Service Partnering Opportunities
Utilities have made progress toward segmenting customers and evolving customer service to meet increasing interest in the environment and consumption. With the advent of smart grid and the increased challenges with meter data management, it will be interesting to see how utilities continue to advance their segmentation and customer service models and whether utilities continue to handle customer care in-house or partner with care specialists so they can focus on the core business of delivering power.
To fully leverage the value of meter data, further investments will be needed in customer service solutions such as customer information systems, contact centers and other communications technologies that can leverage the vast amounts of data in meaningful ways for utilities and customers. These investments also must be scalable to handle all the increased customer participation in a reliable, cost-effective manner.
Forward-looking utilities are starting to examine their customer care models and how they will meet these looming demands. With service quality having as much influence on consumers as the products being offered, many utilities realize the best way forward is to focus on their core expertise of delivering power while remaining open to external partnerships with companies that specialize in customer service and engagement.
More than 40 percent of utility respondents in the white paper said they outsource energy efficiency programs, including customer contact functions. As a result of the scale up of energy efficiency programs and the need to market different products to different customers based on consumption patterns, these numbers are likely to increase.
Utilities that look at smart grid and other technologies as an opportunity to develop comprehensive customer experience strategies in addition to enhanced power service will thrive in the new energy economy. Remaining open to partnerships with a customer care specialist that can match multiple touch points with new customer segmentation and preferred communication channels may be the way for utilities to move to a customer-centric focus and get the most out of their new meter data.
Peter Warren is a senior manager with TELUS Energy Solutions, a practice dedicated to serving oil, gas and utility clients. The TELUS-sponsored white paper with IDC Energy Insights is available at http://telus.com/utilities.
Beyond AMI, Analytics (Em)Power Utilities
By Michael Madrazo, Detectent
The advent of AMI and the communication system it employs will give utilities more data than before. Having more data is one thing, but how it’s mined, monitored, modeled, managed and analyzed is another. Transforming this data into actionable information will lead to better peak-load management and will allow utilities to perform informed customer outreach and targeted campaigns, empowering them to become energy efficient.
Research conducted by the Boston Consulting Group found that 66 percent of respondents said they would like more communication from utilities about smart meters and their value. Whether for energy efficiency, demand response or pricing programs, utilities’ natural next step is to analyze customers’ energy use. Communications and programs specifically tailored for customers based on individual usage patterns and energy use lifestyles, will drive customer satisfaction and energy reduction to new levels.
Through AMI, utilities can show customers how much energy is consumed hourly. However, AMI is just a piece. By applying analytics and statistical algorithms, utilities can process hourly smart meter data and determine which major electric appliances are used when. Presenting energy use to customers at the major appliance level allows them to better understand their total energy use, but more important, understand which components of this total use they can do something about. Customers are not likely to change the time they eat dinner with their families to reduce energy use during peak time, but they would most likely delay using their electric dryers until later in the evening if they were educated on what a simple behavior change could save in dollars and energy. Moreover, with specific knowledge of each customer’s energy use, a utility can communicate with its customers when the messages are meaningful.
Having access to granular-level, energy use data will be critical in planning, delivering and monitoring customer programs. For example, a utility can use these new analytical techniques to accurately quantify the number of homes with swimming pools before launching a variable-speed pool pump program. The program campaign can then be tailored based on how much of a customer’s overall energy use is attributed to his or her pool pump. The same tools can be used by the utility to validate and communicate to the customer the energy savings that was achieved by installing the variable-speed pool pump. Demand response programs will be more effective, as well, when the utility knows which homes have air conditioning and exactly which homes use air conditioning during peak periods.
In contrast to today’s mystifying monthly utility bills, presentation of disaggregated energy use and personalized messages to customers will help them understand their energy use habits and what they can control, such as changing the pool pump timer and setting the thermostat for an early morning pre-cool of the house. The knowledge of when and for what each customer uses energy is needed to take the dialogue further–to reducing overall energy consumption and helping reduce global warming’s impact–and go beyond fleeting messages. True impact will take a continuous discussion about energy use with each customer.
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