25% INCREASE in customer satisfaction

3 TIMES AS LIKELY More than

37% INCREASE in signups for energy products and programs

to recommend their provider

$5 Annualized increase in earnings* for utilities with highest customer satisfaction

DIGITALLY ENGAGED CUSTOMERS SHOW IMPROVED CUSTOMER SENTIMENT

C-SAT TRANSLATES INTO HIGHER RETURN ON EQUITY3

$18/HH$8.80

$4.40

$2.65

$2.15

Increased revenue(Cross-sell)

Decreasedbilling costs

Decreasedrevenue management

Total utility value

Decreased call center costs

CUSTOMER ENGAGEMENT DRIVES OPERATIONAL VALUE2

Averaged acrossall customers

Customer engagement is no longer just a business issue. Utility business leaders around the world are recognizing the value of engaging their customers. But, increasingly, theyʼre realizing that transforming the customer relationship is just as much an IT project as it is a business project. Too often, IT is consulted at the end of the conversation and seen as a roadblock that keeps business leaders from keeping up with customer expectations.

This is a missed opportunity. By thinking holistically about the front-end and back-end aspects of customer interactions, utilities can implement an IT solution that is suited to the unique needs of customer engagement.

CUSTOMER ENGAGEMENT IS THE NEW FRONTIER OF UNTAPPED VALUE.When utilities deliver a higher level of service at moments that matter, customers are more satisfied, participate in more programs, share information more easily, recommend their utilities more often, and feel more loyalty toward their energy providers.1,2 This translates to higher customer lifetime value in competi-tive markets, increased ROE in regulated markets, and customer care and operational savings for all providers.3

There’s also a long-term strategic benefit to providing better customer experiences. For example, as demand flattens, utilities can offset declining revenues by earning their customers’ trust and becoming their providers of choice for new products and services. Being customer centric is becoming key to how utilities secure their place in an evolving energy ecosystem.

CUSTOMER ENGAGEMENT HELPS UTILITIES AND CUSTOMERS UNLOCK NEW VALUE.

ENGAGED CUSTOMERS ARE A VALUABLE ASSET

10% Among most engaged customers

ENGAGED CUSTOMERS SWITCH LESS2

MILLION

LOWER CHURN

THE IT ARCHITECTURE UTILITIES NEED TO UNLOCK THE VALUE OF CUSTOMER ENGAGEMENT | ©OPOWER 2015

1 Accenture, New Energy Consumer research program, 2015 consumer survey

2 Opower, Moments that Matter: A customer-centric approach to experience management, 2015

3 J.D. Power, How Customer Satisfaction Drives Return on Equity for Regulated Electric Utilities, 2012

POSITIVE CUSTOMER EXPERIENCES INCREASE LOYALTY2

Was bill easy to understand?

Did CSR offer advice on reducing bill?

NO

YES

NO

YES

Intending to stay with provider

Intending to churn

Positive experience yields 67% increase in loyalty

Positive experience yields 75% increase in loyalty

THE IT ARCHITECTUREU T I L I T I E S N E E D TO UNLOCK THE VALUE OF

CUSTOMER ENGAGEMENT

1

*on a $1B base

Unfortunately, when utilities try to tap into the value of customer engagement, existing systems often turn out to be more of a barrier than an enabler.

Customer preferences change fast. To keep up, utilities need applications that can pull in new streams of customer data, adapt, and innovate.

Existing systems weren’t designed for customer engage-ment. They were purpose-built for operational objectives. As Gartner has pointed out, systems of record like CIS, MDMS, and OMS can process transactions and manage data, but they can’t deliver innovation or differentiation because of their slow pace of change.4

As a result, even with expensive retrofitting, existing systems struggle to deliver the results utilities need to meet today’s customer expectations and tomorrow’s business model.

UTILITY SYSTEMS AREN’T UP TO THE TASK OF CUSTOMER ENGAGEMENT.

“The system you just installed was built to requirements that are now two, three, four years old, and the world has changed. The world did not stop while you wereimplementing to yesterday’s requirements.”

UTILITIES FACE AN ENGAGEMENT GAP THAT EXISTING INFORMATION TECHNOLOGY CANNOT FIX

Todd Arnold, Rethinking Utility Customer Care

UTILITY MARKETINGAND CUSTOMERCARE

CUSTOMER

CIS

/CRM

MD

MS

OM

S

IT INFRASTRUCTURE

Unable to leverage data across systems.

Purpose-built for operational objectives.

Expensive and time-consuming to change.

CUSTOMER ENGAGEMENT PLATFORM

4 Gartner, Accelerating Innovation by Adopting a Pace-Layered Application Strategy, 2012

THE IT ARCHITECTURE UTILITIES NEED TO UNLOCK THE VALUE OF CUSTOMER ENGAGEMENT | ©OPOWER 2015

CROSS-CUTTING CUSTOMER-CENTRIC AGILEIntegrates and analyzes

data from multiple systemsBuilt to engage customers Adapts to new customer

expectations

Creates a unifiedcustomer record

Sends the right message, to the right customer, at the right time

Iterates quickly and easily

Rich analytics Delivers multi-channelexperiences at scale

Extends to new use cases and future growth

Gap 1: Siloed Information

Customer data currently lives in several locations within the utility, including MDMS, CIS, and OMS. A customer engagement platform aggregates data from all utility systems. It gives utilities a unified view of the customer on which to base a customer engagement strategy. Through analytics and data science, the platform can also make that data actionable by revealing patterns and making predictions.

A CUSTOMER ENGAGEMENT PLATFORM IS A NEW KIND OF SOFTWARE.

Gap 2: Focused on customer operations instead of customer

Existing utility infrastructure is operational. It was built to maximize the efficiency and repeatability of a fixed set of mandatory transactions.

In contrast, a customer engagement platform is built to deliver customer-facing applications and services. It delivers the right messages to the right customers at the right times. It offers seamless, unified experiences across every communication channel, at scale. And, it monitors how customers are engaging, and automatically adjusts their experiences based on their past behaviors.

NEXT-GENERATION UTILITY SYSTEMS NEED CUSTOMER-CENTRIC CAPABILITIES

THE IT ARCHITECTURE UTILITIES NEED TO UNLOCK THE VALUE OF CUSTOMER ENGAGEMENT | ©OPOWER 2015

Gap 3: Slow pace of change

Long lead times for on-premise solutions are out of sync with the fast-paced nature of customer preferences and expectations. For example, a seven-year IT investment cycle can’t keep up with a consumer world that changed from flip phones to smart-phones and Blockbuster to Netflix in the same time period.

Customer expectations will continue to evolve, and customer engagement platforms should, too. That’s why they’re built to learn, adapt, iterate, and extend to new use cases — effectively future-proofing your business.

SaaS

In-house

= 1 month

TIME TO VALUE

PLATFORM MATURITY

UX DESIGN

WHERE TO GO FROM HERE.Utilities face three key questions when considering a customer engagement platform that can meet the needs of both the business and IT:

Should you build it or buy it?Customers’ expectations are being set by national brands with tens or hundreds of millions of customers. But utilities with a few million customers are unable to match the internal resources Amazon or USAA devotes to customer engagement. To keep up with customers’ expectations and lower costs, more companies are choosing Software-as-a-Service instead of building their own solutions.

SaaS built specifically for the utility industry allows you to leverage best practices that have been refined across hundreds of implementations and millions of customers — giving you more bang for every buck of your technology investment.

SaaS lowers the total cost of ownership by leveraging open-source databases and software, commodity servers and storage, and economies of scale. A customer engagement platform can also support multiple business units and help you consolidate vendors. Doing so can cut costs by about $2.5 million per year.

In addition, SaaS offers agility and flexibility, short time to value, and option value to add new features. It also offers extensibility and can enable an ecosystem of pre-integrated partners.

How can you tell if it will deliver value?In order to deliver results, a customer engagement platform has to engage customers and motivate them to act, whether they’re reducing usage during peak hours or moving to paperless billing. As a result, being customer centric goes beyond segmentation and cross-channel delivery. It is also critical to be able to design a great user experience. A top-tier CEP provider needs UX experts in engineering, consumer marketing, interface design, and behavioral design.

How do you manage risk?To manage risk, utilities should look for mature platforms that deliver repeatable results. Early-stage companies offer a lot of flexibility, but, as they grow, they can’t achieve quality and customization at scale. To achieve platform maturity, companies need to make significant investment in an architecture that enables flexibility.

INTERACTIONDESIGN

VISUALDESIGN

INTERFACEDESIGN

NAVIGATIONDESIGN

INFORMATIONDESIGN

INFORMATIONARCHITECTURE

Around the world, leading utilities are embracing customer engagement platforms. Now they’re reaping the rewards — from greater revenues, to lower costs, to happier customers.

To learn how Opower’s customer engagement platform can help your utility achieve its goals, contact platform@opower.com.

Year One Year Two Year Three

TOTAL COST OF OWNERSHIP

In-house

SaaS

Cumulative cost 50% less over 3 years

A FEW CRITERIA DIFFERENTIATE LEADING CUSTOMER ENGAGEMENT PLATFORMS

PLATFORM INVESTMENT

GROWTH TRAP

Vendor SizeFlex

ibili

ty

THE IT ARCHITECTURE UTILITIES NEED TO UNLOCK THE VALUE OF CUSTOMER ENGAGEMENT | ©OPOWER 2015