Powerful Customer-Centric Strategies for Energy Providers

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1 White Paper Powerful Customer-Centric Strategies for Energy Providers EXECUTIVE SUMMARY Consumer expectations are changing in every industry and the energy and utilities sector is not immune to these challenges. Consumers can now reach a company using many different channels, some of them online channels, in person, or via the phone. They are currently able to communicate at any time from mobile devices and have an expectation that service will be provided 24/7. They increasingly want to decide how and when to engage with their utilities providers, thus increasing the complexity of customer experience management. This call for better services and engagement puts significant pressure on energy companies to become more demand-driven in order to satisfy the needs of consumers. Executives understand the importance of having a variety of channels available that consumers can use to communicate with their providers; however, they are faced with a range of issues in a constantly changing market increasing energy costs, declining sales, more competition from other providers, technological innovations, and shifting consumer values and preferences. This white paper will explore how providers can gain a strategic advantage by offering more value and a personalized experience to consumers. Adopting a multichannel, customer-centric approach can lower costs, improve public perception and impact consumer retention.

2 The New Normal Today s digital and communications landscape has shaped consumers to expect and demand more from their energy utility providers. Gone are the days when consumers had little say in the level of service received. They want a personalized experience that delivers accurate, real-time information about their energy usage. More than 60% of customers are dissatisfied or indifferent with their current supplier. Many providers are responding to this new normal by investing in processes and channels that focus on improving consumer communication and engagement in order to gain a competitive edge. In the current energy utilities environment, it seems there is plenty of room for improvement. For example, a recent customer perception survey shows overall perception of energy service as not very good, with more than 60% of customers dissatisfied or indifferent with their current supplier. 1 This demonstrates a broad opportunity for providers to improve their customer experience platforms and reduce the negative impact of one of the biggest issues energy companies encounter today: increasing prices and declining sales. Increasing Energy Prices and Declining Sales According to the US Energy Information Administration (EIA), residential energy prices will continue to increase in the coming decades (see figure 1). 2 Sales for the residential sector accounted for 36% of all electricity use in 2012, which was an increase from 33% in In 2010, year-over-year sales increased 6%; however, the following two years showed a 5% decline (see figure 2). 3 EIA forecasts flat levels of electricity use through 2015, with growth rates continuing at nearly 1%. This growth, however minimal, is positive news, and in order to be in the best possible position to capture revenue related to this increase, companies should place stronger emphasis on improving customer care. Growing competition from other providers in the industry further underscores this need. Competition Motivates Consumers to Take Action Energy companies should always strive to offer outstanding customer care; however, in markets where consumers have the power to choose their energy providers, the necessity to improve customer experience is amplified. According to a J.D. Power study, 41% of retail electric utility residential customers have taken action in the past year to either switch providers, renew with their current retail provider, or sign up for retail service for the first time, with a majority citing price competition as a primary reason for taking action. 4 As deregulation is expected to continue, it is extremely vital for energy companies to invest in new infrastructure and costeffective programs that deliver optimized processes. The goal is to find contact center solutions that enable providers to still compete on price as well as on the quality of customer service, all within budgets. 1. Teleperformance WW Multichannel CX Survey, Energy Utilities, US Energy Information Administration, Annual Energy Outlook 2014, eia.gov, US Energy Information Administration, US Electricity Sales Have Decreased in Four of the Past Five Years, eia.gov, J.D. Power, Satisfaction with Price Is Higher among Retail Electric Customers than among Local Electric Utility Customers, press release, jdpower.com, Figure 1: Energy Prices by Sector and Source, 2012 dollars per million Btu, unless otherwise noted (Source: US Energy Information Administration, Annual Energy Outlook 2014, eia.gov, 2014) Sector and source Residential Reference Case Annual growth (percent) Propane % Distillate fuel oil % Natural gas % Electricity % Powerful Customer-Centric Strategies for Energy Providers 2014 Teleperformance 2

3 Figure 2: Annual Retail Electricity Sales by Sector, (Source: US Energy Information Administration, Monthly Energy Review, eia.gov, 2013) terawatthours 1,600 1,400 1,200 1, residential commercial industrial (Note: Direct electricity usage and sales to the transportation sector are not graphed as both account for less than 4% of electricity usage.) New Technologies Although consumers still expect to contact their service providers through channels such as voice, , white mail, fax, and face-to-face, companies should add channels that will help acquire and retain younger generations of Internetsavvy consumers. Channels such as IVR, video chat, click-tochat, click-to-call, social media, mobile apps, and SMS/text will help transition the industry from a provider-focused model to a customer-centric one. The Web Some energy companies have embraced new technology to offer consumers an enriched online experience through dynamic websites and online dashboards with comprehensive, on-demand energy profile information (e.g., smart meter data). Utility companies that are slow to adapt their businesses to these new advancements are likely to have a diminished position in the market. Social Media Social media is another rapidly growing arena for energy providers to listen, engage, educate, and understand consumers. Public comments on social media can affect opinions about brands and companies, positively and negatively, and long response times can damage public perception. Companies should hire experienced agents trained in social media customer care. They understand that social media is best used as a complement to existing service channels as some issues are sensitive and therefore should be moved to private channels. Gartner recently identified social media as a top technology trend for the energy and utilities sector, stating, Social media for outage communications is also rising in importance and value for utilities and consumers experiencing outages. Opportunities to use social media to improve internal utility business processes are starting to emerge. 5 If managed correctly, social media can be used as an effective consumer engagement channel that benefits companies in competitive as well as non-competitive markets by Acquiring and retaining consumers Improving communication with consumers during interruptions in power, especially during severe weather events Educating consumers about new products and value-add services Providing money-saving tips and advice on power use Sharing information about programs for energy efficiency and renewable energy Answering consumer inquiries about accounts, contracts, technical support, and billing and payment Mobile Mobile technology continues to develop as a popular channel for consumers, and providers will be smart to find ways to integrate it into their customer experience strategies. According to IDC s recent smartphone forecast, total smartphone shipment volumes in North America will reach 198 million units by 2017, resulting in a CAGR of 8.8% for the mobile industry for With smartphone adoption on the rise, it is expected that this growth will correlate with consumer demands for greater mobile connectivity with contact centers. Energy utility companies that want to achieve the best rankings for customer experience should be responsive to meeting these expectations and offer solutions, such as mobile-friendly websites and apps, to better service mobile users, as doing so can stimulate sales and increase loyalty. 5. Gartner, Gartner Identifies Top 10 Technology Trends for the Energy and Utilities Sector in 2013, gartner.com. 6. IDC, Worldwide Smartphone Forecast and Analysis, Powerful Customer-Centric Strategies for Energy Providers 2014 Teleperformance 3

4 Trust Issues For decades, customers endured arcane processes for pricing and billing and struggled with a very limited number of service channels. Such issues negatively impact levels of trust and satisfaction for consumers. In fact, this is reflected in recent survey results where 2,000 respondents could choose more than one reason for losing trust in their energy supplier (see figure 3). Although some electricity providers have reestablished trust with consumers through improved communication about billing, there are many companies still struggling to find the right blueprint for success. It is no longer enough for electricity providers to compete on price alone. In order to be a preferred provider today, companies need to be proactive in building a positive brand perception. Figure 3: What Caused Customers to Lose Trust in Their Energy Supplier?, 2,000 respondents who could choose more than one reason for losing trust in their energy supplier (Source: Raconteur, Powering the Future, raconteur.net, Ernst & Young YouGov Survey, March 2013) 57% 31% 30% 21% 21% 17% 12% 9% Price increases while making profits Complex tariffs Not understanding basis of prices Lack of consumption reduction advice Poor customer service Unclear bill format Incorrect billing Poor online services 5 Fundamentals for Building a Customer-Centric Approach It is perhaps easy to recognize and agree that improving customer experience is an important initiative, but many company leaders are paralyzed when it comes to organizing, implementing, and following through on a customer-centric strategy. One message is clear: Having a dedicated, experienced customer care team in place to deliver a holistic customer experience is absolutely necessary for success. With the growth of smart grids and imminent competition, utility companies must be prepared to deliver the way consumers want. A good starting point to shape a customer-centric approach is to 1. Focus on customer service topics that can help differentiate and strengthen brand image and therefore encourage brand advocacy by consumers. For example, constantly measure and improve the performance of customer service and the quality of communication as well as offer an attractive price for services. 2. Identify what drives consumer satisfaction, such as: Professionalism of the team Clear and effective communication with consumers about their requests Timeliness of responses Ability to quickly solve issues Agents empathy 3. Offer transparency within platforms and processes to ensure bill accuracy and ease of support. 4. Deliver a personalized experience that enhances the quality and depth of the company-consumer relationship. 5. Integrate analytics solutions to observe client activity, issues, and account management. Consumer engagement relies on consumer insight. The value of this data is twofold: contact center agents can use it the next time consumers call in, and energy companies can predictively engage consumers across all channels to aid them in more efficient home energy management. Powerful Customer-Centric Strategies for Energy Providers 2014 Teleperformance 4

5 Some companies are embracing a customer-centric approach as a chance to reinvent their traditional business model from a simplified role as energy supplier to a more differentiated model, where providers serve as energy management consultants, offering consumers more value and satisfaction. Closing Thoughts There is little doubt that customer experience management will continue to be demand-driven by consumers. To gain a strategic advantage, energy companies should offer a suite of service channels that appeal to multiple generations. In the current utilities environment, this should include online and digital solutions such as click-to-chat, social media, and mobile apps. Implementing a multichannel, customer-centric approach can lower costs, improve public perception, impact consumer retention, and increase levels of customer experience, to name a few. As online and digital channels for service continue to evolve, it will be imperative for companies to gather solid intelligence via research data and analytics for a clear understanding of what companies are doing. A partnership with Teleperformance can help you deliver an exceptional customer experience. Working together as a team, we can discover solutions that are key for your company to succeed in the utilities landscape of today as well as tomorrow. About Teleperformance Teleperformance, the worldwide leader in multichannel customer experience management, serves companies around the world with customer acquisition, customer care, technical support, and debt collection programs. The company s innovative solutions for mobile, customer data analysis, social media management, hosted contact center, and back office integration improve the customer s experience. The group operates more than 110,000 computerized workstations with close to 149,000 employees across 230 contact centers in 62 countries and serving more than 150 markets. It manages programs in 63 languages and dialects on behalf of major international companies operating in a wide variety of industries. For more information, please visit Contact us today for more information Millrock Drive Holladay, UT info@teleperformance.com Please visit our website Please visit our blog blog.teleperformance.com Follow us on Twitter twitter.com/teleperformance Watch us on YouTube youtube.com/teleperformance Like us on Facebook facebook.com/teleperformanceglobal