Why Is Customer Experience Management Important for Utilities?
How Do Utilities Get Started with Customer Experience Management?
Customer Experience Management Is a Journey, Not a Race
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The concept of customer experience management (CEM) is simple, but understanding, measuring, and enhancing CEM can be difficult. Utilities across North America are challenged with finding ways to make their customers’ experience a positive one—from redesigning the customer bill to increasing first contact resolution and adopting consistent self-service methods across all contact channels. We examine what CEM is, why it’s important for utilities, and how you can start implementing it within your organization.
E Source defines CEM as the deliberate process of planning and enhancing all customer interactions with a company to deliver superior service and inspire loyalty. Utilities have hundreds of customer touchpoints and millions of customer interactions, all of which have the potential to incite a positive or negative reaction from a customer. For example, the utility website and contact center are obvious places where customers interact with the utility, but less obvious touchpoints could include field staff, marketing materials, and bills. CEM can have a tremendous influence on brand loyalty, customer satisfaction, and ultimately the bottom line, which is why providing a consistent experience during each interaction is worth your attention.
With customer expectations at an all-time high and costs to serve increasing, especially for dissatisfied customers, it’s necessary for utilities to realize the importance of implementing a CEM strategy.
Customer expectations of service levels are often set by other industries. Each day, utility customers interact with banks and credit card companies, purchase goods from online retailers, and send packages across the country. Companies that provide these goods and services work to enhance the customer experience to differentiate themselves from their competitors. As service improves in other industries, the experiences those industries deliver increase the expectations customers have for their experiences with their energy provider. However, utilities have been consistently slower to adopt improved levels of customer experience, mostly because of their status as regulated monopolies. To meet customer expectations, utilities need to raise the standard of service that other industries have set, or else risk having increasingly dissatisfied customers who come at a higher cost to serve.
Dissatisfied customers are expensive because they contact their utility more often, which inevitably increases operational costs. In addition, dissatisfied customers typically choose a company’s most expensive contact channel—a phone call to a live agent—to resolve their issue. Regulated utilities can also be hit with heavy fines and encounter strained relationships with regulators if customer complaints are numerous. Therefore, it’s cheaper to design and implement a positive customer experience than it is to continue down the path of status quo by perpetually serving (or rather disserving) dissatisfied customers. In fact, a study published in the Journal of Marketing found that companies with higher customer satisfaction ratings typically have higher share value and higher projected long-term growth.
Conversely, satisfied customers are less expensive to serve because they are less likely to contact your business and more likely to transact through self-service channels instead of the more expensive live agent. Satisfied customers are also more likely to adopt services such as paperless billing and budget billing, and to participate in energy-efficiency programs. And it’s easier to up-sell and cross-sell value-added products and services, including efficiency services, to these customers. Keeping customers satisfied by enhancing their experiences with the utility is a cost-effective and sustainable business strategy.
Every company has a different customer service philosophy, but whatever that philosophy may be, the first step toward CEM should be to define goals that will make a positive impression on utility customers. Customers vary every bit as much as organizations do, so it’s important to keep in mind that a cookie-cutter approach to CEM is doomed to fail. It’s important to find a way to implement CEM that is suitable to your organizational culture as well as to understand your own customers’ needs.
Some basic steps to take when developing a CEM strategy include:
- Define your CEM goals with ways to measure, monitor, and report on success.
- Complete a full assessment of the current state of CEM within your utility.
- Define the optimal customer experience you would like to provide.
- Develop a clearly articulated brand strategy that is aligned with the utility’s mission and vision. Answer the question, “What are you trying to be to your customers?”
- Identify a budget for CEM activities.
- Identify and understand all customer contact channels and touchpoints.
- Identify the key “moments of truth” with your customers—the points at which they form a positive or negative opinion of your utility.
- Segment your customers and define their needs.
- Complete a road map that your utility can follow to show progress from the current state to the desired state.
- Determine who will be responsible for customer experience. Having a chief customer officer is ideal, but at minimum, there should be a person who is empowered to lead CEM and has the authority to implement change.
- Develop an action plan to break down departmental silos by emphasizing the customers’ needs first.
- Make CEM the responsibility of all employees by measuring and monitoring how they are delivering it. All employees have the power to influence the customer in a positive or negative way.
CEM is a gradual evolution, not a short-term project. It needs to be continually nurtured and refined. CEM is also a cultural shift, moving the utility toward a deeper and lasting customer focus. The endpoint to CEM is reached when every utility employee in every utility department puts the customer first, before every task that they do. And in case that seems too intimidating, E Source is available to help you get your organization to focus on CEM by offering resources that can help transform your utility into a customer-centric one. For more information on the E Source Customer Experience Suite, please visit our website.
The Basics of Customer Experience Management, E Source, UCC-RB-6 (2011)
Customer Satisfaction and Stock Prices: High Returns, Low Risk (PDF), Journal of Marketing (2006)
Identifying Key Moments of Truth
Chief Customer Officer Interviews
Developing a Business Case for Customer Experience Management
Selling Customer Experience Management Internally
For 25 years, E Source has been providing unbiased, objective research and advisory services to over 300 utilities and large energy users. Our energy experts have answered more than 8,000 questions over the past 3 years. This guidance helps our customers advance their efficiency programs, enhance customer relationships, and use energy more efficiently.