Utilities Need Advanced CIS-Enabled Call Centers
By John Powley
Deregulation first started transforming the telecommunications world in the long distance wars of 1984, and now it is changing the utility industry`s landscape. Utilities that do not take appropriate measures to hold onto their high-value customers run a high risk of losing millions of dollars to new competitors in deregulated markets. Wholesalers, larger utilities, aggregators and other opportunistic enterprises will soon be trying to “cherry pick” smaller utilities` high-value commercial and residential customers by offering them better service at a lower cost. Most customers would prefer to stay with the same electric company or natural gas company that has served their business or family for years, but ultimately “defect” because they cannot refuse the cost savings offered by competitors who are free to wheel and deal in a deregulated marketplace.
Today, as much as 80 percent of distribution revenue comes from less than 20 percent of utilities` customer base. Fierce competition continues to drive customer service to the forefront as a major competitive difference. New technology will emerge to help companies create efficient, real-time-enabled and integrated customer service support centers. If utilities want to hold onto their high-value customers, they must remain competitive by reshaping their customer relationships.
CIS-enabled Call Centers
The best strategy is to build advanced customer information system (CIS)-enabled call centers. An advanced CIS-enabled call center allows companies to store pertinent customer information in back office knowledge databases and share it with the front office when customers call. An advanced CIS enables a company to create an application platform integrating the billing system, phone statistics, contact information, reference materials and state utility regulations. It provides total integrated data flow needed in a consistent manner, no matter how the utility company is contacted–be it by phone, fax, online or via a service call. The system gives service agents all the information they need and displays it on their desktop workstations. This information gives service agents wide latitude in handling situations, providing faster problem resolution for their customers.
When a customer calls, the CIS-enabled call center`s interactive voice response unit is automatically engaged, retrieving all the customer`s account information. The call is then routed to the best-qualified service agent. With this technology enhancing its call center, a utility can know more about its customers` respective value to the organization. This knowledge enables utilities to better serve customers` needs, determine where to target services and products, and up sell and cross sell their high-value customers. Customer knowledge is power and the CIS is the weapon utilities should deploy to share that knowledge with every department throughout an enterprise to better serve and retain high-value customers.
Almost all utilities already have some form of a CIS in place to manage customer information, but very few have one advanced enough to allow their call centers to segment customers based on their respective value. Most utilities` call centers have a few people to answer phones. They do their best to help customers and efficiently process transactions such as bills, service discontinuation/restoration, etc.
However, outside of maintaining a reasonably accurate database of customers` names, addresses, type of businesses and residences, these call centers do not have the technical infrastructure to develop a stronger customer relationship during a given transaction. Utilities that maintain traditional call centers are not able to take advantage of customer interactions to support customer relationships or develop a better understanding of their customers.
As the Table 1 illustrates, there are five stages to forming a strong customer relationship. Most basic call centers operated by utilities fulfill the first two stages of answering phones competently and processing transactions efficiently. An advanced CIS-enabled call center incorporates these two stages and then refocuses its attention on building stronger, proactive customer relationships in the final three stages.
The third stage embodies the principle that customer relationships are assets and these relationships can be cultivated as a call center agent processes a transaction. To do this, utilities can implement technology to identify patterns, assist with fraud detection and shape customized customer programs such as billing, problem resolution and account management. Excellent customer data is now available, but not exchangeable and updateable throughout the utility company. This stage also sees customers requesting more customized support services.
Customer demand then drives utilities to target the fourth stage known as the “heart of the business.” Here utilities share customer information throughout the organization. For example, think of two special customers: one is a high-value customer who owns a block of downtown businesses and the other is on life support systems. If either calls to report a power outage, the front office call center system would automatically route the call and the customer`s concern to the back office CIS. The CIS would then identify the customer based on the home or business telephone number from where the call was received.
Next, the CIS would route the call to the system`s customer consultant branch. This branch is comprised of software functions that manage customer relationships and service customer problems and inquiries. It also contains records of customers` names and addresses. The call would then be routed from the customer consultant branch to a call center agent most qualified to deal with the situation. All of the customer`s account information, the customer`s concern and options available to service the situation are displayed on the service agent`s desktop workstation.
Ideally, the customer`s electricity meters are electronically linked to the CIS and the utility knows about the power outage before the customer calls, and responds by contacting the customer, giving him an idea of how long it will take to restore power. Depending on the situation, the service agent could make a small gesture toward strengthening the customer relationship. For instance, the service agent could give the customer a special discount coupon.
When utilities improve their call center to the world class level in stage five, they are ready to use their understanding about their customer relationships to open up new business opportunities. With an advanced CIS-enabled call center, utilities can devote themselves to finding new ways to satisfy and retain customers, which leads to new business opportunities. The call center is no longer just a vehicle to hear complaints and process electricity bills. It is now an advanced CIS-enabled call center–a major strategic weapon.
Deregulation Requires Advanced CIS Call Centers
When the telecommunications industry deregulated in 1984, consumers were annoyed with countless offers by AT&T, MCI and others in the long distance carrier wars. MCI`s first target was the commercial sector, virtually ignoring the residential sector. Eventually, after the battle for commercial sector supremacy was finished, both carriers went after residential customers.
In both cases, the long distance companies offered customers deals and incentives, give-aways and special discounts they could not refuse. In the end, the company that launched the most aggressive marketing campaigns cherry picked the greater percentage of high-value commercial and residential customers. The same thing will inevitably take place in the utility industry, which is why utilities currently operating in monopoly markets should seriously consider building stronger customer relationships well before they find themselves competing in deregulated markets.
Research conducted by the PIMS Strategic Planning Institute of Cambridge, Mass., (see Figure 1) shows that gas utilities with the best CIS-enabled call centers experienced healthy returns on their investments–far beyond gas utilities that provided low levels of customer service. Gas utilities that provided high-level customer service experienced sales growth 10 percent higher than those that provided low-level customer service. Providing high-level customer service also produced 5 percent more market share for these utilities than for those providing low-level customer service. Consequently, gas utilities with high-level customer service generated 10 percent more return on sales than utilities with low-level customer service. Finally, those that provided high-level customer service earned 25 percent more return on equity than gas utilities that provided low-level customer service. It stands to reason that CIS-enabled call center technology will allow a utility to up sell more services to its high-value customers and retain a greater percentage of high-value customers over the long-term than utilities that choose not to make such investments.
Building a CIS Call Center
Fortunately, technology for an advanced CIS-enabled call center can be designed, implemented and integrated in a year. The challenge for utilities competing in a deregulated market is learning how to market their services based on customer information and value segmentation. It could take years for utilities to shift their culture so all employees act in ways to build customer relationships appropriately. The third stage of the customer relationship model is to integrate the work of call center agents and the whole service organization so they keep each other`s promises to customers.
An advanced CIS-enabled call center needs a technical infrastructure built on several customer information databases. By tying these databases into one proprietary database with intelligent routing technology, customer information can be shared throughout the utility. Customer`s addresses, respective value to the company, the nature of their concerns and options to address their concerns can be freely retrieved from back office databases and forwarded to front office where it can be utilized by service agents, utility crews in the field and other departments. These call centers also need to be equipped with call routing capabilities to make sure each call is forwarded to the appropriate service agent. For example, an Oracle relational database and Vantive customer relationship management software can be used to pull customer information from the customer information databases and display it on call center agents` workstations.
Building Customer Loyalty
To build customer loyalty through more outreach and customer services activities, some utilities have connected their CIS call centers to their main operation centers. By using their advanced CIS-enabled call centers to provide proactive customer service, utilities can contact their customers to tell them there is a power outage and when they can expect to get their electricity back before customers report it. Such functions may seem very basic on the surface, but can go a long way toward generating loyalty to prevent those high-value customers from being cherry picked by a competitor.
Another example of the strategic advantages of advanced CIS-enabled call centers is providing proactive customer service to customers with health-related issues. If a customer hooked up to a kidney dialysis machine suddenly lost power, these special CIS call center functions would enable a utility to communicate this information to its crew in the field. The crew could respond to that customer`s house and render a special service to help them.
Utilities that proactively approach and build advanced CIS-enabled call centers before deregulation hits their marketplace will maintain their high-value commercial and residential customer base. They will preserve the distribution revenue these customers generate for them. Utilities will also be in a much more defensible position to do battle with their competitors, which will enable them to foster new business opportunities to grow market share and profitability. In the long run, utilities that make short-term investments to create advanced CIS-enabled call centers will more than double their money and remain competitive no matter how many other utilities enter their deregulated marketplace. n
Although call centers have become “big business” throughout the United States–serving as the most frequent point of contact with customers–a recent survey conducted by Ernst & Young LLP (E&Y) shows that electric and gas utility industry centers are among the poorest performers in delivering both efficient and effective service. According to the E&Y survey, which polled 326 call center managers from various companies across the nation, call centers in healthcare and banking markets received the highest marks (75 and 70 percent respectively) for above average performance, while not one call center in the utilities industry obtained this achievement.
The survey attributes this deficiency in large part to the “long duration of talk time required for solving service and billing problems.” For example, callers must often be put on hold while information is verified, payment histories are checked or service schedules are determined. The challenge for utility executives, as identified by E&Y, is to follow the lead of other industries and streamline these processes, enhancing the role of the call center as a means of not only retaining customers but also building new relationships.
Most call centers, according to the survey, are primarily managed for efficiency (average time-in-queue, calls per agent, average service lever, etc.) with speed and productivity as dominating factors. Fewer than one-third of the centers surveyed are tracking effectiveness measures such as the percent of first-time-to-final calls and complaints as a percentage of calls. However, a few of the more progressive centers see the importance of balancing efficiency and effectiveness. Call center managers are also beginning to recognize that their objectives and performance need to fall in line with their company`s overall business strategy to maximize value.
“During the next 18 months, we are going to see some dramatic shifts in the nature of call centers throughout the United States,” said Edward Nolte, E&Y Customer Connections practice area`s senior manager. “Of the call centers surveyed, more than 33 percent said that they are planning to place an increased emphasis on customer access and sales rather than focusing primarily on customer care activities.”
Personnel issues have also been revealed by the survey as another key factor that determines a call center`s success. The survey documented the connection between good personnel management and excellent performance. For example, those companies receiving higher “best-in-class” marks hired more selectively, used more performance measures to manage their agents, offered performance-based rewards and retained agents longer.
In addition, call center management realizes the need to upgrade and sometimes replace existing technology. Almost 20 percent of call centers surveyed have implemented computer telephony integration (CTI), and while only 33 percent currently use a separate customer care system (Clarify, Scopus, Vantive), interest in implementing these systems is quickly increasing.
“It`s all a matter of finding the right balance–between efficiency and effectiveness, personnel and technology–to achieve maximum performance,” said Nolte. “As the utility industry continues down its path of deregulation, call centers will play much more critical roles in helping companies connect with their customers to provide the highest-quality service.”
John Powley is vice president of TSC`s Enterprise Customer Management business unit. TSC has worked with utility customers such as Atmos Energy and South Carolina Electric & Gas to help them transform their customer relationships. TSC can be reached at 800-759-2250.
Survey Reveals that Electric and Gas Utilities` Call Centers Lag Behind