Why utilities are spending more to make customers unhappy (and how to do it right)


By: SGN Staff


By Eric Nelson

Smart grid introduction is changing utilities’ interactions with customers. It introduces new rate structures, new invoice formats and new customer interaction and outreach approaches. Confusion born of change will increase customer inquiries, costs and potential increases in formal complaints. Utilities need to deal with these issues proactively. In the long term, this means building towards a 360-degree customer view that enables a high level of personalization and intelligent interaction. In the near term, it may simply mean enabling a range of customer self-help channels to reduce costs, drive satisfaction and meet expectations other consumer-facing industries have already set for customers.


Rising Costs and Key Metrics

According to Purdue University’s Center for Customer-Driven Quality, a typical customer service inquiry will cost a provider anywhere from $5 to $10 per call, with Level 1 technical support calls running $20 to $45 per call. Smart grid introduction is likely to increase both call volume and costs per call because more complex bills, services and equipment will create more complex inquiries.


A review of U.S. rate recovery cases and general rate cases over the last few years reflects a renewed emphasis on reducing customer complaints by investing hundreds of millions of dollars in customer service software and tools. But a review of customer complaint trends over the same period shows no corresponding decrease in complaints as a result of this investment. In fact, the deployment of smart grid capabilities and associated rate structures and smart grid-enabling technologies continue to drive complaints and customer service costs upwards.


Dual Benefits of Customer Self-Help

In order to reduce costs and complaints, utilities need to give customers a sense of control. Their expectations are being raised across consumer-facing industries that offer more ways to communicate, find information quickly and deal with billing and service issues online. As Table 1 displays, online self-help tools not only reduce the cost to field and handle customer inquiries, as compared to traditional communications channels, but also drive a high level of customer satisfaction.


When customers are empowered with options and control over how they choose to communicate with a provider, their level of frustration decreases. Customers that aren’t frustrated are unlikely to file complaints with regulatory agencies. In this sense, pursuit of self-help capabilities that cater to individuals’ preferences serves the dual purpose of reducing call handling costs and protecting utilities’ interests as they pursue rate relief. That rate relief is unlikely to come to fruition if contact center costs begin escalating in parallel with a spike in complaint filings.


Eric Nelson is managing principal for Synaptitude Consulting, which provides offers a full smart grid consulting services portfolio, including experience and expertise with customer service transformation.


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