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Effective Customer Engagement Begins by Knowing the Score

By Rod Walton, Senior Editor

OK, let's set a few relationship rules up front: We only talk when I want to talk. You just have to be there when I need you. We can do this by phone, laptop, Facebook, Twitter or email. And, no, you don't have to be perfect but, yes, you do have to fix it when you mess up. I don't even want to have to ask because I expect it. That is all. Have a nice day!

What sounds like a high-maintenance relationship is kind of what utilities face every day with customers, especially during this golden age of analytics and social media. This high-wire act now spans generations, portal choices and expectations in a way that your father's utility could never have predicted decades ago.

Any effective approach to customer engagement will take those wily millennials into account, wooing them assiduously via social media while not losing the favor of their parents who've been there from the beginning but are satisfied with a simple phone call every so often. One thing that unites those generations is their understanding that problems happen but sternly expecting you'll work it out and quickly.

The difference now is you've got to be all things to all people. Instantaneously

"I think we're in the middle of a sea change, and that's a hard place to be when you're in the middle of it," said Patty Durand, executive director of the Smart Grid Consumer Collaborative (SGCC). "One utility used to have a two-week metric for solving complaints. Now, we can't imagine that."

The rise of the social Web and grid analytics gives the modern utility no excuse for not being on "top of it" all the time. Nobody knows this better than the companies that work to keep the grid going. Their customer-service focus has shifted from simply repairing outages and sending bills to doing that while also figuring out how to personalize each service in a way that keeps them connected and relevant. And, in this day and age of demand reduction, distributed energy options and deregulated choice, customer satisfaction might be the most important survival skill of all.

Have Convenience, Will Change

For example, data indicates that millennial customers want to be eco-friendly. Thus, they want clean, renewable energy and billing practices that eliminate the muss and fuss of paper billing. But there's a little secret about that: They want their good old-fashioned utility to handle most of the details for them.

To that end, some time ago FirstEnergy hired marketing and public relations firm Eric Mower & Associates (EMA) to tailor a campaign for getting more customers to adopt electronic billing. Initially, an average of about 2,500 FirstEnergy customers were signing up for the e-billing option, but planners felt it could be better targeted and more widely adopted.

Contractor EMA spent several months doing some audience segmentation, starting by looking at in-house data. Online advertising was added to help expand on the key profiles EMA was developing about customers. Stephanie Crockett, senior vice president and managing director at EMA, noted that it was pared down to identify those from whom the notion of convenience mattered and for whom paying something online was going to be comfortable.

"People really wanted the option to go paperless… and people overestimated the security fear (of going purely online)," Crockett said. "But what we found in the research was that the real motivator was around convenience, the notion that they could do this easier. That was critical to the campaign we deployed."

It was successful. EMA's efforts helped push FirstEnergy's e-billing enrollment to 5,000 new signups monthly, a 117-percent increase over the previous pace. The campaign achieved several ends, among those was becoming more efficient on billing practices and gaining a deeper understanding of customer dynamics.

"I think the segmentation is really critical, so that the utility doesn't look at customers as all the same animal" Crockett said. "You have to think like a retailer."

That's because many modern utilities are becoming more like retailers, even to the point of selling goods and services previously unknown to power providers. SGCC's Durand noted that Georgia Power, for instance, has launched a retail marketplace where customers can buy programmable thermostats such as Nest, LEDs, power strips and automatic door locks.

"You don't have to go to Lowe's or Home Depot to buy that stuff," she said.

Savings Seekers, Early Adopters and the Status Quo

Ultimately, utilities may use their customer-facing channels to offer products such as electric vehicles and charging stations. After all, who better to recommend EVs than the utility that will be providing the power to make them go? SGCC's "Empowered Consumer" report also identified smart thermostats as "one of the easier gateways through which utilities and their partner can approach consumers." The smart thermostats are relatively easy entry points for getting customers on board with new technology, saving money and environmental impacts.

Drilling down to really understand your audience's habits and personality types is key to effective customer engagement. SGCC's own Consumer Pulse research segments customers into preference types, thus helping it and vendors better offer products that meet needs. The Consumer Pulse found that 30 percent of consumers are environmentally oriented, or "green champions." It seems to be the segment growing most over the past decade, according to reports.

Twenty percent of SGCC respondents are "savings seekers," while 18 percent are "status quo" and relatively happy with the ways things are. Slightly below that, or 17 percent, were determined to be technologically cautious. Finally, 15 percent were "movers and shakers" and "early adopters," the type most likely to pursue and purchase the Nest smart thermostat and similar new products.

These statistics could be broken down numerous ways. The environmentally oriented and early adopters, for instance, could be seen as two peas in a pod and combined for 45 percent of SGCC respondents. The status quo and techno cautious are 35 percent. And, although those so-called savings seekers add up to only one-fifth of respondents and typically are less satisfied with their utilities, it's safe to say that most of them won't turn their noses up at the potential for lower bills.

"Many more are interested in pricing plans than is widely understood," Durand said. "Many are interested in time-varying rates."

In an Inc. magazine online article about customer engagement, author Wendy Lea noted that it is "no longer a series of one-off experiences" but an ongoing dialogue. "Companies need to be good listeners in the digital age, and that requires a new set of skills."

Another way of listening, of course, is by doing the homework. Researching their customers to determine where they share the most common ground is perhaps the best, first step on the road to effective engagement for utilities.

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