Getting Business Value from Customer Engagement

Chet Geschickter, Research DirectorGartner Energy & Utilities Industries 

Research

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How Gartner Delivers ValueGartner research helps clients review, develop, and enhance

strategic IT initiatives to support their business objectives. We help define appropriate metrics to drive ongoing performance

improvementsWe 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

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Gartner Energy & Utilities Research Agenda 

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Pop Quiz

For Utilities, Customer Engagement is a:a.) Way to amortize investmentsb.) Form of customer transportationc.) Tactic for moving customers to low cost channelsd.) All the abovee.) None of the above

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Answer

For Utilities, Customer Engagement is a:a.) Way to amortize investmentsb.) Form of customer transportationc.) Tactic for moving customers to low cost channelsd.) All the abovef.) None of the above

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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

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© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.

The Business Value of Customer Engagement

Customer Engagement Can Support a Range of Utility Objectives

Utility Objectives Type of Utility Engagement BenefitsReduce cost to serve

Regulated integrated Drive to unattended service, 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

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• 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) 

Customer Engagement Has a Multiplier Effect

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Item AmountDevelopment cost $250,000Engagement rate 1%Adopters 10,000Cost per adopter $25Repeat users (10%) 1,000       Cost per repeat user $250

Customer Engagement Drives Channel Productivity

MYUtility Mobile App:Build and Deploy

Item AmountMarket Research $100,000Development Cost $250,000Usability Study $100,000Marketing Investment $2,000,000Total Cost $2,450,000Engagement Rate 3%Adopters 30,000Cost per adopter $80Repeat users (50%) 15,000Cost per repeat user $160

Engagement is “The Great Amortizer”

MYUtility Mobile App: Research, Build, Test, Deploy, Market

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• 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)

Social Media is the Ultimate Accelerator

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© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Process for Creating a Solution Architecture

Vision User Engagement

People

Processes

Technologies

Information

Cloud

MobileSocial

1. Organizational Objectives

2. Metrics, Benefits 3. Group and Categorize

4. Identify Solution Landscape

Four Step Engagement Process

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Step One: Define Organizational Objectives

Be specific with what you are trying to accomplish with customer engagementSome examples to get started:• Reduction in bill complaints• Opt‐ins to new tariff • Lowest cost achievement of energy efficiency targets• Water conservation

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Step Two: Translate Organization Metrics Into Specific Metrics

Type of Utility Example Objective Example Success MetricsNatural Gas Distributor Increase commodity 

demand• Number of new customer 

connections• Number of new gas 

appliances coming online (fuel switching)

Water Utility Water conservation to address supply constraints 

• Decrease in gallons per day of consumption per customer

• Number of water conservation devices installed

Regulated Investor Owned Utility

Lower cost‐to‐serve • Net increase in customer self‐service transactions

• Net decrease in call center call volume

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Step Three: Categorize Metrics Into Program Initiatives• Categorize metrics into related groups or subsets • Organize into initiatives that define organizational imperatives

Example:

Objectives InitiativeDevelop new tariffs

Consumption InsightsDemand managementResource conservationDistribution planning

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4. Identify Components to Support Initiatives• Identify people, process and 

technologies to support the initiative

• Remember to include common infrastructure components

Predictive Modeling Engine

Predictive Modeling Engine

Customer Profile 

Database

Customer Profile 

Database

Customer Master Data

Mgmt

Customer Master Data

Mgmt

Data Governance

Data GovernanceData ScientistsData Scientists

Database Administrators

Database Administrators

ConsumptionDatabase

ConsumptionDatabase

Example Customer Insights Initiative Components:• Consumption analytics• Customer demographics• Interaction context• Customer financial data

People

Technology Process

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SolutionLandscape

Customer Master Data

Customer Master Data

……

PortalPortal

ContextUnderstand the current interaction

Web Analytics

…

High Bill Detection

Customer Demographics

Consumption Analytics

Social Analytics

DeliveredExperienceDeliver an impactful user experience

Portal

…

WCM

SMS ‐ Text

Social

Document Management

WCMWCM

Conservation (incl EE, DR, 

H2O)

Conservation (incl EE, DR, 

H2O)

ConsumptionAnalytics

ConsumptionAnalytics

OMS Integration

OMS Integration

Customer Self ServiceCustomer Self Service

MultichannelCampaignMgmt

MultichannelCampaignMgmt

CIS Integration

CIS Integration

Social for CRM

Social for CRM

Mobile App

Completed Solution Landscape Example

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© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Technologies for Customer Engagement

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

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Customer Service

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

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Analytics

• End‐user consumption analytics

• Peer consumption benchmarking

• Rate plan analyzer• Social media monitoring• Theft prevention/revenue assurance

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Billing

• Complex billing engine (or advanced or convergent)

• Electronic bill presentment and payment

• High‐bill alerts• Prepayment• Quotation and contract management

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Energy Efficiency / Conservation

• Energy efficiency gamification• Energy efficiency program management• Energy efficiency tips• Water conservation measures• Usage data exchange• Usage presentment

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Example Selection Criteria

Customer Effectiveness

Utility

 Efficiency

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

Utility Efficiency:•Cost‐to‐serve reduction•Regulatory service quality indexes of achievement

•Revenue growth•Commodity management risk•Customer acquisition

High

Medium

Low

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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 helpIn other words, do what we want them to!

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© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Measuring Results

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

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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

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Where to Go Next With CustomerSelf‐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

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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 gob.) Way to amortize investments – yes, engagement drives adoption which lowers the cost per userc.) Tactic for moving customers to low cost channels – yes, digital channels are non‐rival and scalabled.) All the abovee.) None of the above

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Questions?