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“Customers Don’t Speak Kilowatt Hours” – but Utilities can talk their language

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Paul McDonald's picture
Senior Director, Product Strategy Oracle Utilities

Paul is a Senior Director of Product Strategy at Oracle Utilities. He helps energy providers decarbonize and grow their businesses by influencing consumer action. He's responsible for building an...

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  • Aug 10, 2021 3:45 pm GMT
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“Customers don’t speak kilowatt hours” is a great line from Michael Weinstein, home energy management solution line owner at AEP. He remembers the days when contact between utilities and customers meant sending and paying a monthly bill. Fast forward 20 years, and the picture looks much different. In nearly every industry, the customer experience has become much more digital, personalized, and easy. 

While a recent U.S. consumer survey showed that, holistically, phone (24%) and email (22%) are still the most popular channels a customer wants to use to engage with their utility, this is definitely evolving as younger generations establish their own home front. For Generation Z, the desire to interact via text/SMS came in at 20%, the highest of any gage group. Millennials prefer to utilize a mobile app (25%) and were less inclined to lean on text (just 11%). No matter the channel, the key to making these interactions sticky and memorable is experience automation technology, where every word, data point, and pixel gets chosen on the fly to connect to each customer on a personal level.  

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Utilities have huge amounts of customer information, but the jury is still out on whether they are fully using it to create a better overall experience and relationship. This can range from the moment that customer sets up an account, to how their utility helps them manage everything from the overall energy usage to electric vehicle charging. 

As Weinstein recently noted, “The most exciting transformation at AEP is the embrace of big data…we can take that information through analytics and turn it into actionable tips that help customers manage their energy usage. Customers want things that are personalized, and specifically actionable to themselves,” he adds. “It’s been a big realization for utilities that customers don’t speak kilowatt hours – they speak dollars and cents. And another segment wants environmental information, so we talk to them about saving emissions rather than kilowatt hours.”

While AEP is progressive in its approach to speaking to customers, many utilities just aren’t there yet. For example, one of my colleagues recently moved from California to North Carolina and was required to sign up three separate utilities for her water, electricity, and gas. The story went something like the three bears. The largest utility was way too hard to deal with and left a negative first impression, while the medium utility was just okay, and the smallest utility was just right. While the latter created a seamless onboarding journey totally online, the former delivered a painful experience that started online and ended with a 45+minute wait on the phone. Not only did the large utility start their journey off with a new customer on the wrong foot, but they also missed an opportunity to start her off with confidence in using lower cost digital, self-service channels right from the start. 

How one utility is getting customer experience right

For Exelon, avoiding this very scenario and empowering customers with a better digital experience has been a key priority. In a recent webinar, Exelon’s Mike Menendez, IT Vice President, Customer Technology, and CIO of BGE, discussed the company’s aggressive back-office technology and digital investment plan. In the conversation, he outlined how Exelon adopted a customer-centric mindset as expectations overall have shifted. This included finding the appropriate balance between core journey improvements and transforming their business, which requires as much of a cultural and talent transformation as a technology transformation. As part of this initiative, he emphasized the importance Exelon places on recognizing customer signals to empower agents to demonstrate authenticity, empathy, and contextual awareness. This pushed the need to increase their focus on less traditional business metrics and more on KPIs like first call resolution, self-service adoption, and customer feedback. 

To do this, Exelon tightly integrated its back-office technologies (such as its customer information system) to support their Metering and Billing operations, as well as an aggressive digital transformation of their front-office (including its CX and energy efficiency tech). This suite of solutions goes far beyond CRM in order to meet their current and long-term needs. As a result, their agents now have a single, 360-degree view of the customer to deliver personalized service interactions. Having the data and intelligence from these systems tightly coupled is working because they starting speaking the customer’s language. Exelon saw demonstrable improvements to KPIs, including an increase of over 30% in online completion rates for the “Sign Up and Move” feature. In turn, that produced a 10%+ reduction in customer calls and 20%+ reduction in back-office work, and also improved operational efficiencies. 

A new playbook for a new time

While all of these scenarios are critical in creating a connected, positive customer journey moving forward, never was there a more important time to do so than over the past 18 months. The pandemic created a precarious position of super high household bills and the need to communicate with customers more thoughtfully to provide visibility into billing details and management. I.E., utilities needed to adjust their language, and it most certainly wasn’t speaking kilowatt hours. To exemplify the problem, here are some staggering statistics we found in our recent consumer survey and polls:

Household utility bills skyrocketing as high as 20-50% depending on the area.
Over half of the utility customers surveyed reported anxiety about paying their bills. 
70% of utility customers were interested in receiving notifications of an impending high bill, but only 15% were receiving it.
23% noted they could not pay their bill for the first time last year.
56% were not aware of assistance programs their energy provider offers to help.

Let these numbers sink in for a moment - almost a full quarter (23%) of people who normally can pay their bill could not for the first time in the pandemic. This doesn’t even touch the millions of people in the U.S. already struggling with energy burden. In fact, ACEEE recently noted that one-fourth of all U.S. households and two-thirds of low-income ones have high energy burden, meaning they spend more than 6% of their income on utility bills. 

In tandem with flexible customer information systems (CIS), many utilities were able to adapt standard billing procedures. This included halting shut-offs and creating special payment plans and billing to help customers continue to have the power they need. Moreover, offering modern, easy-to-use online customer service options allowed people to regularly check on their bill and usage, use chatbots to answer quick questions, or reach a service agent that has full visibility into their profile and new billing plan to answer any questions. 

But for utilities with an even more connected customer journey, they were able to proactively reach customers with information on billing assistance programs, tips to reduce energy usage, and proactive high bill alerts. For example, Puget Sound Energy (PSE) doubled down on its efforts to provide customers this information and its high bill alert messages achieved email open rates more than 2X the industry average. This kind of proactivity in good times and bad is the future of customer experience. 

In closing, I will remind you all that Accenture famously found that the average home spends just nine minutes a year interacting with their energy provider. That does not give utilities much leeway in getting customer interactions right. As the average consumer’s relationship with energy becomes more complex and their choices for energy service providers grow, the onus is on utilities to create a win-win relationship that keeps that customer happy and well, loyally remaining a customer. A big piece of this effort will be learning the language each customer prefers to speak and where they want to speak it – be it text, chatbot, voice, video, etc. Our success as a utility industry will be ensuring we are delivering tailored, personalized communications that are timely, relevant, and engaging to customers in ways that energize them to act.  

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Matt Chester's picture
Matt Chester on Aug 10, 2021

In closing, I will remind you all that Accenture famously found that the average home spends just nine minutes a year interacting with their energy provider.

This really puts it in perspective. I do think that will change as customers get more energy conscious, plugged into smart devices, as EVs become a part of the conversation, etc. But realistically, what's that going to do-- double it to 18 minutes per year??

Peter Key's picture
Peter Key on Aug 17, 2021

Actually, Accenture found that customers spend 9.2 minutes a year interacting with utilities digitally and 11 minutes interacting with them through traditional channels, and that was in 2017. I'd be curious to see what those numbers are now; I think the financial problems many people experienced during the pandemic boosted it.

That aside, I think a big challenge utilities face in customer service is that they have to deal with wide ranges of people with wide ranges of interest — from electric power gear heads who would love to have the tools to figure out the exact best time to run their dryers on every day of the week to people who don't want to interact with them except when they have to. To accommodate the former, they have to put in place a customer service infrastructure that the latter hope to never use.

Fortunately, much of it's there — as Paul noted, utilities have huge amounts of customer information — it's just a matter of using it to give each customer the type of service they want. As people love saving money, apps and tools that help them do that seem like a good place to start.

 

 

 

Paul McDonald's picture
Paul McDonald on Aug 18, 2021

100% agree on a couple points, Peter: 1) it's not just the growing complexity of customers utilities need to serve, it's the growing diversity of that customer base that makes it a challenge for utilities to serve each of them on a personal level. And 2) The pandemic absolutely got customers more engaged with their energy use. Opower delivers millions of high bill alerts (email, IVR, SMS, mobile push) on behalf of utilities every year, and people open the email versions at about 3X the industry average. Last spring, as we were all spending more time at home, Opower delivered 400% more high bill alerts than the prior year. I doubt one alert added minutes of time thinking about their utility, but it certainly added some time.

Paul Korzeniowski's picture
Paul Korzeniowski on Sep 14, 2021

Excellent points. The reality is that technology has moved at hyper speed rate since the turn of the millennium and certainly in the last 10 years. The pandemic also sped up technology adoption.  McKinsey found that the share of digital or digitally enabled products in company portfolios accelerated by a shocking seven years.  As a result, customer expectations changed dramatically. In order to stay in sync with customer demand, utilities need to change as well. 

https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever

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