Getting Business Value from Customer Engagement. Chet Geschickter, Research Director Gartner Energy & Utilities Industries Research

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1 Getting Business Value from Customer Engagement Chet Geschickter, Research Director Gartner Energy & Utilities Industries Research 1

2 How Gartner Delivers Value Gartner research helps clients review, develop, and enhance strategic IT initiatives to support their business objectives. We help define appropriate metrics to drive ongoing performance improvements We provide critical guidance on utility industry specific technologies and trends that will help shape the future of utilities and their success or failure. Our research includes global examples of best practices, survey data, and analytical models to help clients align their IT strategies with business requirements Gartner provides access to an industry client base that represents hundreds of institutions around the world including business and technology leaders 2

3 Gartner Energy & Utilities Research Agenda 3

4 Pop Quiz For Utilities, Customer Engagement is a: a.) Way to amortize investments b.) Form of customer transportation c.) Tactic for moving customers to low cost channels d.) All the above e.) None of the above 4

5 Answer For Utilities, Customer Engagement is a: a.) Way to amortize investments b.) Form of customer transportation c.) Tactic for moving customers to low cost channels d.) All the above f.) None of the above 5

6 Key Issues How can we define the business value of customer engagement for our utility? What process should we follow to create a solution architecture for customer engagement? What is the portfolio of technologies we can use to improve customer engagement 6

7 The Business Value of Customer Engagement 2014 Gartner, Inc. and/or its affiliates. All rights reserved.

8 Customer Engagement Can Support a Range of Utility Objectives Utility Objectives Type of Utility Engagement Benefits Reduce cost to Regulated integrated Drive to unattended service, serve optimize meter to cash Achieve regulatory indexes Regulated integrated Meet service quality indexes (SQIs) imposed by regulators Grow revenue Competitive retailer Target high value segments, retain, cross sell/up sell Acquire new customers Competitive retailer; Regulated (gas) Reduce customer acquisition costs. Improve commodity management Regulated integrated, competitive retailer Reduce peak demand, connect customers to power markets 8

9 Customer Engagement Has a Multiplier Effect Channel adoption and usage creates value More adoption amortizes fixed costs across a larger base Digital is non rival so upside from digital channels is unconstrained (within population) Adoption depends on engagement Big benefits are intangible (e.g. brand loyalty and trust) 9

10 Customer Engagement Drives Channel Productivity MYUtility Mobile App: Build and Deploy Item Amount Development cost $250,000 Engagement rate 1% Adopters 10,000 Cost per adopter $25 Repeat users (10%) 1,000 Cost per repeat user $250 MYUtility Mobile App: Research, Build, Test, Deploy, Market Item Amount Market Research $100,000 Development Cost $250,000 Usability Study $100,000 Marketing Investment $2,000,000 Total Cost $2,450,000 Engagement Rate 3% Adopters 30,000 Cost per adopter $80 Repeat users (50%) 15,000 Cost per repeat user $160 Engagement is The Great Amortizer 10

11 Social Media is the Ultimate Accelerator Word of mouth is free A good app or program can go viral and scale exponentially People make irrational economic decisions in your favor if they are captivated (aka stranger buys drinks effect) 11

12 Process for Creating a Solution Architecture 2014 Gartner, Inc. and/or its affiliates. All rights reserved.

13 Four Step Engagement Process Vision 1. Organizational Objectives User Engagement 2. Metrics, Benefits 3. Group and Categorize 4. Identify Solution Landscape People Processes Technologies Information Cloud Mobile Social 13

14 Step One: Define Organizational Objectives Be specific with what you are trying to accomplish with customer engagement Some examples to get started: Reduction in bill complaints Opt ins to new tariff Lowest cost achievement of energy efficiency targets Water conservation 14

15 Step Two: Translate Organization Metrics Into Specific Metrics Type of Utility Example Objective Example Success Metrics Natural Gas Distributor Increase commodity demand Number of new customer connections Number of new gas appliances coming online (fuel switching) Water Utility Regulated Investor Owned Utility Water conservation to address supply constraints Decrease in gallons per day of consumption per customer Number of water conservation devices installed Lower cost to serve Net increase in customer self service transactions Net decrease in call center call volume 15

16 Step Three: Categorize Metrics Into Program Initiatives Categorize metrics into related groups or subsets Organize into initiatives that define organizational imperatives Example: Objectives Develop new tariffs Demand management Resource conservation Distribution planning Initiative Consumption Insights 16

17 4. Identify Components to Support Initiatives Identify people, process and technologies to support the initiative Remember to include common infrastructure components People Example Customer Insights Initiative Components: Consumption analytics Customer demographics Interaction context Customer financial data Technology Customer Profile Database Process Customer Master Data Mgmt Data Scientists Predictive Modeling Engine Data Governance Database Administrators Consumption Database 17

18 Completed Solution Landscape Example Context Understand the current interaction Solution Landscape Delivered Experience Deliver an impactful user experience Web Analytics Portal Portal Customer Demographics Consumption Analytics High Bill Detection Social Analytics Consumption Analytics Conservation (incl EE, DR, H2O) Customer Master Data WCM Customer Self Service CIS Integration OMS Integration Multichannel Campaign Mgmt Social for CRM SMS Text Mobile App Social WCM Document Management 18

19 Technologies for Customer Engagement 2014 Gartner, Inc. and/or its affiliates. All rights reserved.

20 Customer Interaction Customer service chat Customer service management Multichannel surveys Self serve portal Mobile self service SMS channel Social for customer engagement Virtual agent 20

21 Customer Service Collaborative customer interface Customer service scheduling Outage restoration portal Outbound notifications (payment delinquency, outage, DR events) 21

22 Analytics End user consumption analytics Peer consumption benchmarking Rate plan analyzer Social media monitoring Theft prevention/revenue assurance 22

23 Billing Complex billing engine (or advanced or convergent) Electronic bill presentment and payment High bill alerts Prepayment Quotation and contract management 23

24 Energy Efficiency / Conservation Energy efficiency gamification Energy efficiency program management Energy efficiency tips Water conservation measures Usage data exchange Usage presentment 24

25 Example Selection Criteria Utility Efficiency High Medium Low Customer Effectiveness Utility Efficiency: Cost to serve reduction Regulatory service quality indexes of achievement Revenue growth Commodity management risk Customer acquisition Customer Effectiveness: Secure and reliable power Opportunity to save money Fast and easy to communicate Variety of rate plan options Easy to do business with Insight into consumption 25

26 Engaged Utility Customers Are More Likely To Participate in optional utility programs such as energy efficiency or demand response Give higher marks for customer satisfaction Help themselves instead of calling for help In other words, do what we want them to! 26

27 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Measuring Results

28 Yesterday: Transactional Metrics First call resolution Average call handle time Number of complaints received Number of complaints resolved Average time to complaint resolution Agent productivity 28

29 Today: Self Service Activity Metrics Number enrolled in self service Number enrolled in online bill pay Number of online bill pays Number of log ins Page views 29

30 Where to Go Next With Customer Self service Find the Delivery Gaps Track each person who has attempted self service Measure completion rates of self service Measure escalations Detail escalation paths. Example: Google, to community, to your website, to a chat, to an IVR, to a human Measure and publicize satisfaction with each channel, and overall Identify Net Promoter Score drivers 30

31 Pop Quiz Answer Key For Utilities, Customer Engagement is a: a.) Form of customer transportation yes, we can move customers from initial interaction to where we want them to go b.) Way to amortize investments yes, engagement drives adoption which lowers the cost per user c.) Tactic for moving customers to low cost channels yes, digital channels are non rival and scalable d.) All the above e.) None of the above 31

32 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Questions?

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