Engaged and informed customers can help utilities drive value through operational cost savings. The key to finding the right balance between active engagement while reducing contact and outreach costs is the right mix of multi-channel digital platforms.
According to J.D. Power, disengaged customers are less satisfied with their utility service1, and low satisfaction correlates with reduced operating margins2. In addition, disengaged customers are most likely to resist new utility initiatives, ranging from smart meters to rate increases to a variety of other projects. Utilities must create right channels and protocols of continuous engagement with the customers to deliver on their environmental goals of water and energy efficiency.
Mobility is Key
Using the right multi-channel engagement approach and digital platforms for real-time communications, utilities are seeing tangible improvements in customer satisfaction, operational savings, and water and energy efficiency. An important aspect of that is the use of mobility. As consumers have embraced this digital mobile shift, businesses are now focusing on transforming the way they conduct business, with consumers rewarding those who welcome the shift and, at the same time, punishing those who fail to adopt.
Take for instance, the utility industry. Customers spend only minutes a year interacting with their utility provider. However while utilities move through this transformation from demand services to a managed services approach, they are increasing adoption of technologies such as cloud based software, big data analytics, mobility platforms and Internet of Things. These platforms allow the utilities to analyze an enormous amount of data that is being acquired through smart meters, smart grid, customer engagement platforms, etc. This data allows utilities to further learn about their customers’ usage patterns and demographics, and with such knowledge, can educate and motivate customers through targeted marketing campaigns providing tangible results to the utilities.
Engaging Customers through Mobility is key to Efficiency & Operational Cost Savings
Traditionally the customer interactions with the utility are transactional and initiated by the customer for specific need around billing and service management functions. Utilities are starting to utilize digital engagement techniques to convert the customer engagement into an ongoing two way relationship to drive value for both parties. As an example, real-time notifications for service status, water leaks, and high bills can help reduce call center calls while improving overall customer experience. Mobile and cloud technologies are enabling the utilities worldwide to deliver these services using real-time communication with their customers.
Utilities around the world are activating customers by investing in Customer Engagement platforms that allow them to deliver the right message to the right customer, through the right channel, and at the right time. This approach — which borrows from the success seen in other industries that have employed similar techniques, such as retail, personal banking and even social media — creates a personalized and highly tailored engagement approach for each customer and has also been proven to increase customer sentiment.
Improved Cost-Effectiveness & Increased Adoption of Consumer Focused Programs
As utilities continue to expand their program offerings, they need to utilize mobile and web channels to educate customers on a wide variety of efforts, including self-service options, usage insights, and conservation programs and recommendations. Traditionally, utilities have used standardized, one-size-fits-all mass mailing to drive education, and have struggled with low open and recall rates. With modern technology, utilities can now offer highly personalized outreach through both digital channels. Utilities can also boost their marketing effectiveness by segmenting customers based on a variety of customer information (demographic, psychographic, and behavioral) and tailoring messaging and channel choice to meet the needs of each individual customer.
Delivering highly engaging, personalized recommendations via Mobile and Web to customers to drive behavioral change and water conservation is key to utilities having success. Mobile and web based engagement can be significantly scaled to reach millions of customers with personalized messages at little cost. By saving on per-customer fixed costs, utilities can either increase participation using the same marketing budget or reduce the budget while still realizing the same participation levels.
Reduced Cost-To-Serve Via Proactive Engagement through Mobile Platforms
Using digital and proactive mobile customer engagement utilities can reduce cost to serve because engaged customers are more likely to use self-service tools and be more responsive to program and service signals, especially with the use of their smartphones.
Specifically, proactive customer engagement leads customers to shift to lower-cost interaction channels (Mobile and Web), increases the adoption of paperless billing, and increases on-time payments.
Call center efficiencies - Customers typically call their utility providers in relation to account details, billing, and moving service (50% of all calls, on average). Some of these calls (high bill calls in particular) result in expensive call escalations and truck rolls to investigate potentially faulty meters. But when customers receive detailed account information including billing and payment options, self-service options, and other recommendations in real-time on mobile and web they are more likely to take advantage of self-service tools and call less frequently, thus saving the utilities time and expenses.
Increased Adoption of e-Billing - The utility industry significantly lags other major industries in its ability to get people to pay their bills electronically. By transitioning to e-Billing, utilities eliminate the costly need to print and send paper bills. While the exact value and duration of value from switching customers to electronic payments varies widely across the utility industry, the one common theme is that there is a savings to the utility.
Improved payment discipline through mobile and reminders - Mobile technology helps customers pay on time and helps utilities avoid 30- to 90-day payment delays from some of their customers. By improving accounts receivable turnover, utility providers can save on the cost of working capital. Given an average monthly bill of $100 and an average annual utility cost of capital of 10%, a 30 day acceleration in bill payments translate into annual savings of $1 per household.
Digital mobility and associated platforms promise a new era for businesses to engage with their customers. Mobile technologies are impacting utilities by enabling effective customer engagement, improving service levels and delivering critical business insights through big data analytics.
1. J.D. Power, 2013 Consumer Engagement Study, 2013
2. J.D. Power, How Customer Satisfaction Drives Return On Equity for Regulated Electric Utilities, 2012
