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A Customer Engagement Best Practice from outside the Utilities Industry

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Rob Girvan's picture
Individual Contributor self

20+ years in Enterprise Software Applications in the Energy Industry, including ERP, Meter to Cash, CRM, Customer Engagement.

  • Member since 2013
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  • Apr 7, 2020
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Configure-Price-Quote (CPQ) software is a term used to describe software systems that help sellers quote complex and configurable products and help customers explore options and pricing for different product configurations.  For example, a car buyer can visit a car manufacturer’s website and find out the price for the make and model of a car, as well as price every available option. This concept applies to utilities too. With the number of rate and program options now available, CPQ is becoming a requirement for progressive utilities.

The emergence of new product offerings has made the Configure Price Quote concept strategic to utilities. CPQ can assist customers in finding the right electricity product offering and help the customer understand how different rate plans would affect their bill.

Configure-Price-Quote for Utilities includes:

  • Configure:  Identifying the load to be priced, such as historic, modified or green field.  Selecting the rate plan, such as time-of-use, flat rate, or demand response.
  • Price:  Price the load profile in real-time on the selected rate plans
  • Quote:  Present the quote(s) to the customer via mobile, web, or call center

This could be applied in the residential utility space with the growth of time of use rates, special EV rates, and community solar programs.  There are also special rate packages for those willing to allow their utility to have some control over their thermostat and electric water heaters. 

Commercial and Industrial customers can utilize CPQ as well.  C&I customer programs typically a larger focus on peak demands, with products such as demand charges and critical peak demand rebates.  With larger loads and greater potential impact, C&I customers need to understand how they can benefit immensely from these programs.

With the obvious fit of CPQ for utilities, why has CPQ not been widely adopted by utilities?

  • The pricing engines currently in use by utilities were inherently designed to perform billing calculations once per month, not on an ad-hoc basis.
  • Utilities have traditionally educated consumers about solar, EV, and rate programs, on an individual program basis, rather than holistically
  • Existing billing & pricing engines are part of larger Customer Information Systems (CIS), which are responsible for many other critical tasks. Encumbering CIS systems with one more large task is very expensive and risky.

In short, Utilities do not have the systems in place to provide the CPQ process.

Adopting an Enterprise Rating Engine can enable the CPQ process.  With an Enterprise Rating Engine, utilities can enable customers to select from the menu of programs available to the customer, including solar, EV, and programmable thermostats.  And allow the customer to understand how the selected programs would affect the customer’s bill based on the customer’s historic of forecasted electricity usage.

Enterprise Rating Engines sit separate from the CIS and are integrated and calibrated for accuracy.  They have the capability to simulate bills in real-time and at scale, with revenue-grade accuracy.  The Enterprise Rating Engine can run bill simulations in real-time supporting the CPQ process via mobile, web, and the call center.  Read here how SCE used this approach during their TOU rate transition as reported by the Smart Energy Consumer Collaborative.

Enterprise Rating Engines support the CPQ process, providing consumers with forward price transparency, allowing consumers to understand future financial implications of enrolling in new utility programs.

“Price transparency can put companies that practice it at a competitive advantage and lift a big weight from the customer psyche,” says Brand Quarterly.

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Matt Chester's picture
Matt Chester on Apr 7, 2020

Existing billing & pricing engines are part of larger Customer Information Systems (CIS), which are responsible for many other critical tasks. Encumbering CIS systems with one more large task is very expensive and risky.

Is this representative of a need for more funds to be directed into these systems (as well as the educational systems you mention)? I don't think the issue is lack of available resources, just how they're being allocated-- can utilities embrace such large projects without leaving other areas of the business short-changed?

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