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Surprising insights and best practices for Beyond the Meter and Service Plans for utilities.

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Mark Wilkinson's picture
SVP Products Ibex Digital

Helping utilities and their customer experience teams transform customer journeys,  decode customer insights  and enhance revenues for nearly 15 years.  At Ibex, I lead the teams delivering...

  • Member since 2019
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  • Apr 8, 2022

I’ve been busy doing research for Beyond the Meter programs and best practices for utility programs, and hosted several interviews with vendors and service providers across that landscape to learn more about that industry.   Recently, I sat down with Steve Davidson, Vice President of Consumer Products - Warranty Sales, at Fortegra, a global specialty insurance provider that has operated for over 40 years. As a warranty and service contract provider, Fortegra supports a variety of markets, including utility, retail, and manufacturers, through products such as home and consumer electronic protection plans. And, Fortegra’s leadership has a long history of work in the utility industry, so I wanted to get their thoughts about trends related to utility operations and beyond the meter programs.   This article excerpts parts of that conversation to highlight Steve’s insights and illuminate a few surprising facts I learned.  I jumped past the introductions and niceties to get right to the details, and though this audience might get some value. 

Mark:  Utilities saw pressure in virtually every area of customer operations during COVID, including customer engagement, payment and account delinquency challenges, budget pressures, and customer satisfaction (CSAT) hurdles. But, every challenge contains its own opportunity, and we think utilities need new strategies for amplifying the relationship to their customers. From your vantage point, what are some of the key challenges and trends for utilities and their customers?

Steve:   I agree, those are all real challenges. We’re hearing similar sentiments from several of our utility partners. To combat these challenges, it’s important to find ways to deliver additional value through increased customer engagement. Service contracts are a great way to engage with customers and build loyalty, because they provide genuine value, and extend the relationship with the customer into their homes.  For each of our partners, we collaborate to create custom plans that appeal to a wide variety of utility customers, from long-time homeowners to first-time renters. Most importantly, programs must be customer centric and user friendly.  If a customer needs to submit a claim, they engage with us directly, through our claims administration, customer service, and continual outreach programs. That omni-channel strategy really allows us to interact with customers in the channels they prefer, whether that’s through our website or call center.  Importantly, though, service plans don’t just offer value to the customer.  Revenue from service plans increases opportunity for utilities whether it’s to return to customers or invest in other customer engagement and support programs.   Service contracts are one of the largest and most dependable revenue opportunities proven to work for utilities because customers appreciate and depend on them so much.

Mark:  Let’s consider the customer engagement aspects.  Utilities have struggled a bit in J.D. Power scores, NPS, and CSAT during COVID. So, utilities certainly have to be sensitive to any program that could adversely impact customer satisfaction. Is now the right time to launch new types of offers to customers?

Steve:  We think it’s exactly the right time to launch the right kind of program. It’s important to strike a balance — utilities need to find incremental revenue but don’t want to risk a negative experience for the customer. Any new revenue source therefore must have the dual purpose of adding something to CSAT and customer loyalty. We consider CSAT to be a major benefit of our programs. Unlike some providers, we allow our partners to white-label, or brand, the programs, so our partners can sell service plans under their own name. This keeps the customer engagement, attention, and loyalty focused on our partner, and keeps the information and branding consistent for customers.

Repair and protection plans are proven to engage utility customers. The plans are affordable and specific to customer needs, avoiding the high-pressure sales that often occur with insurance products, and protecting customers from the high cost of unexpected repairs in specific areas of the home. There’s no need to overpay to protect the whole house when they can use a custom service plan to protect key items. If a customer needs to submit a claim, we’re on hand with professional assistance to manage the process and provide a quick payment to cover their expenses. Customers need some relief right now. Prices are rising everywhere, and a service plan can amplify the value of a utility and increase goodwill. In addition, the revenue benefits make this a positive-feedback cycle — the revenue from these plans builds month over month for the utility to invest in other parts of the business or return to customers in other programs.

Mark:  A lot of utilities face regulatory scrutiny or complexity related to Beyond the Meter programs. Is there a best way to get started if utilities have an interest but haven’t yet launched a program?

Steve: Pilot programs provide a great starting point for new entries, allowing customers to demonstrate interest. For example, we provide a turn-key program, including an off-bill program, for partners to start with. Promoting an off-bill program removes pressure to put anything on the electric bill, and programs can be offered with a new customer experience that reduces cost and drives quickly toward meaningful revenue. It's important to work with a partner that can handle the initial customer outreach, program administration, and can fund the overall effort to internalize the program for utilities. All these reduce risk and increase the speed to launch a program.

Fortegra happens to bring unique insights into how home protection and appliance programs enhance a utility company’s offerings and still abide by the labyrinth of utility regulatory requirements. Our Chief Executive Officer, Rick Kahlbaugh, began his career as an attorney specializing in public utility regulation. He represented commercial and industrial users in utility service negotiations, established stand-by capacity and cogeneration programs, as well as intervened in major rate cases with gas, electric, and water utilities. Rick is well-versed in the concerns raised by the Offices of Consumer Advocates and is experienced with working through complex utility law requirements for his clients. In addition to our CEO being an expert in utility regulatory matters, Fortegra’s Chief Compliance Officer, John Short, has nearly 20 years of utility regulation experience and led the State Regulatory Affairs department at Sprint. He represented water, gas, electric, and telephone companies before State Public Utility Commissions in matters such as rates and mandatory extensions of services, to name just a few.

Within the Warranty Solutions industry, Fortegra stands apart from our competitors because of Rick’s and John’s utility experience. Their insights help shape Fortegra’s product mix to ensure they provide valued coverages to utility customers, while also complying with the public utility regulatory framework for these types of optional services. 

Mark: I didn’t know that detail about your company’s leaders’ experience in the utility industry.   From my own experience working with utilities about BTM programs, I think most people still may think of service plans as only for homeowners.  Is that still the case?  

Steve:  They used to be! The industry, and service plans in general, have really matured. Today, a well-rounded program offers a plan for just about every customer persona. Consider Millennials and GenX customers who may be moving to their first apartment or first home. A high percentage of these customers are renting their residence and don’t need a bulky home insurance plan, but still have a lot of money invested in consumer electronics like big screen TVs, computers, tablets, and phones. Offering these customers a Consumer Electronics coverage plan that will repair or replace their expensive devices with an all-in-one plan to cover their consumer electronics products at a fraction of the price. Those younger tech-savvy customers increase their protection and save money just because the utility offers that plan; those customers end up being much more likely to engage digitally with the utility in the future. 

Mark:  And, those are the generations about to start buying their first homes, moving to their first jobs, and accelerating change for digital engagement.  What are the best practices that your team offers to  a utility considering a service plan component for their Beyond the Meter program?

Steve:  Well, the keys to success vary for each program. One key aspect for all programs is finding the right catalog. For example, plan a program for renters and owners, not just for commodities (add gas and water protection at the electric utility, for example). Consider customer engagement and content more than transactions – it’s about focusing on the customer and not just the sales. The sales come in after customers learn about the offers and do their research, so be ready to educate customers on what you have and why it matters. Depending on the desired program or what the utility is looking to offer, Fortegra engages and explores ways to achieve specific goals. This includes a discovery process to understand needs, customer demographics, and which service offerings make the most sense. It’s also important to be flexible and have a willingness to try new digital programs. That’s another benefit of Fortegra’s pilot programs – our partners don’t need have to have all the answers up front. Pilots are used to engage customers and gather data before launching an expansive program.

Conclusions: I appreciated Steve’s insights and his company’s history of working in the utility industry.  It’s clear that Beyond the Meter is a major trend given all the new seminars and industry working groups we see tackling those challenges, including UCRC and Utility 2030 Collaborative.  My own perspective tells me that high performing BTM program need to expand appeal of their offers to include all types of utility customers in order to achieve escape velocity and create meaningful revenue enhancements. 

Steve surprised me with repeated points about customer loyalty benefits from service plans, as traditional loyalty metrics don’t always apply to utility performance.  Yet, it’s clear that happy customers who receive the benefits of their repair plan and avoid an unexpected cost would be great promoters of the utility.   I’d make a point of giving customers an easy claims experience and an easy way to share reviews in those types of programs.  As utilities can offer service plans to a wider array of customers, and younger generations, those digital channels of choice will become even more critical. 

And, I appreciated how Steve talked about the benefit of partnering.  That's a key advantage for utilities who may be interested in testing a program.  The advantage of launching a program billed to a credit card instead of the commodity bill makes sense, and gives utilities the opportunity to test the customer engagement channels without budgeting the high cost of a full launch.  It's always better to let the customers tell us how much they are interested in a pilot or a test before we have to integrate or launch a full scale program, and pilots often show Utilities and their partners what to tweak between a pilot and a broader launch.

My interview with Steve covered far more topics than could be summarized here, so please leave questions in the comments section, and I’ll try to get answers for everyone.

Matt Chester's picture
Matt Chester on Apr 8, 2022

And, I appreciated how Steve talked about the benefit of partnering.  That's a key advantage for utilities who may be interested in testing a program.  

Is this an overall trend you're noticing-- utilities bringing in outside partners more rather than trying to bring programs to fruition from the ground up? 

Mark Wilkinson's picture
Mark Wilkinson on Apr 11, 2022

Matt - We certainly see partnering happening more often as a result of the move into marketplaces and new revenue programs.  It's understandable, as utilities have a defined infrastructure for the commodity product depending on their core competency, but digital channels and new products or offers don't always fit that operational model.  A number of utilities have been successful with service plans through partnerships to get to scale, and then it's a simple business decision about whether to "in-house" some of the capabilities or remain with partners.

That's also the case with marketplaces and digital engagement for BTM programs.  Most utilities lack experience in ecommerce and segmented or personalized digital outreach, so success with BTM usually happens faster with experienced partners who can help accelerate the learning curve or supplement Utility operations until they develop in house expertise.

Jamie Wimberly's picture
Jamie Wimberly on Apr 13, 2022

Great article Mark!  Couldn't agree more with you and Steve about the need for moving towards a new partnership model with utilities.  I also believe that utilities and vendors need to work closely together to ensure that that the service model is a smooth one from a customer perspective.  Beyond the Meter (BTM) customer requirements are going to be different than your typical utility customer over an extended period of time.  For example, I can imagine there are going to be a lot of questions around billing that will require vendors and utilities to seamlessly answer.

Appreciate the shout out for the UCRC Beyond the Meter Working Group!  

Jamie Wimberly


Mark Wilkinson's picture
Mark Wilkinson on Apr 13, 2022

Very true, Jamie.  Delivering a BTM program does require utilities to think differently about the new offer or service delivery.  At minimum, utilities should incorporate the new service plan detail with  the customer record and arm customer service with details to help customers get answers to the new types of questions.  Vendors and partners should be in a position to support that effort on a low-tech basis, especially at the start of a program, to minimize investment and maximize the customer experience for the better.  And, digital self-service and communication about the new services helps improve the customer onboarding to the new service and any new portals they may use for the BTM service.  Proactive engagement in the BTM program can build the CX lessons to apply across the entire customer lifecycle.    Great insights.

Mark Wilkinson's picture
Thank Mark for the Post!
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