Improving customer experience, leveraging data from smart meters and the twists and turns of developing successful dynamic pricing programs were a few of the hot topics at CS Week in Orlando, FL this week, where senior managers from leading utilities across the nation shared insights and lessons for improving customer service.
Jessica Cain, Director of Customer Relations and Strategy for Connecticut Power & Light, presented results from their dynamic pricing program called Plan-it Wise, including the business case for new pricing. (Dynamic pricing is one of the market drivers for home energy management technology identified in our recent HAN research report.) She also shared some lessons learned and war stories, including some of the ways the project team improvised to keep the program moving forward. The findings in a nutshell: dynamic pricing yields significant peak consumption reduction. Also, home energy management technology like smart thermostats improve results. You can find a copy of the summary Plan-it Wise findings report here.
The pilot involved 1,500 residential customers and 1,500 commercial customers (most studies are residential only). Her team followed best practices by starting with voice of the customer research, then designing and recruiting test cells of 100 customers to study a variety of pricing programs and technology (programmable thermostats and in-home consumption displays).
After carefully defining statistically significant test cells for various combinations of pricing and technology and a successful recruitment campaign, events quickly went awry. In the four months between when people volunteered to participate and the actual start of the project, 75 percent of smart thermostat volunteers had second thoughts and backed out of utility direct control over thermostat settings during heat waves. In an effort to keep home technology as part of the mix, the project team provided alternative in-home display technology to drop-outs; they were provided either energy orbs that change from green (normal prices) to yellow (peak event coming up) and red (peak pricing in effect) or in-home displays from from BlueLine Innovations (specifically, Power Cost Monitor in-home displays).
One challenge was setting the in-home displays to reflect peak prices. To avoid customer training and education, Project team members drove door-to-door to reset prices on the monitors to reflect upcoming peak time prices. Cain also chronicled the back-and-forth process of interfacing with regulators and groups representing low-income constituents and the elderly. (Residents in one nursing home actually turned off the lights in their rooms and held impromptu peak time bingo tournaments to save power.)
Other key lessons from CP&L include the need to explain complex electricity rate structures and electricity consumption concepts in layman's terms, without utility jargon -- think 'speedometer' (current consumption) and 'odometer' (month-to-date consumption), not utility-geek terms like 'KWh consumed' or 'peak KWh readings.' Also, according to Cain, “What customers say they want versus what they prefer can be different.” Customers in focus groups disliked the notion of peak time pricing. But after the trial, customers on peak time pricing were highly satisfied with the new pricing structure. The CP&L findings were consistent with research findings presented in a recent GTM Research webinar on Why Consumers Love Dynamic Pricing.
Cain also showed a YouTube clip of how Yello Strom is using humor to drive consumer engagement in energy management without bogging down in lengthy explanations about the grid and the benefits of home energy management tools. You can view the clip here -- no German language skills required.
Speaking on re-energizing the customer experience, Pam Wheat, Director, Customer Contact Operations for Oncor, a trailblazer in utility customer service, described an inside-out approach to achieving service excellence. According to Wheat, “Studies have shown that businesses that rate high on customer satisfaction also tend to rate high on employee satisfaction.” Business Analyst Jill Beavers of Oncor described a comprehensive company program to deliver excellence in end-to-end customer management.
The Oncor initiative begins with a dedicated cross-functional customer experience team of 14 professionals and four business sponsors tasked with listening to the voice of the customer and developing improvement initiatives. The initiatives feed into a 33-member council responsible for executing initiatives. Lastly, a customer experience steering committee consisting of a cross-section of senior executives aligns initiatives with overall business strategy.
Program manager Amy Erwin from the Salt River Project spoke about the virtues of establishing a roadmap and taking time to thoroughly analyze and document business processes before charging ahead with smart grid technology. Erwin said that SRP took a 90-day "timeout" from implementation after being awarded SGIG stimulus money. The timeout was hardly a break in the action. During the lull, her teams conducted 71 meetings with 166 stakeholders to document 133 business processes across five segments of the business: generation, supply, delivery, customer service and shared services.
The result? Analysis identified approximately 300 business opportunities to apply technology to improve the business across four meta functions: revenue management, customer management, commodity management and asset management. The team used MetaStorm to document the business processes and EnergyICT, one of the vendors covered in our meter data management research report, for meter data management and for aspects of enterprise data management. Says Erwin, “MDM will change how you look at your business. It’s a process, not a project.” SRP is using MDM to improve distribution asset analysis, line loss measurement and load research and forecasting. Erwin’s advice is to think big, but take manageable bites: “Have a roadmap, but knock out small projects -- it’s less risky.”
One of the key takeaways from the conference is that customer engagement in energy management is poised to take hold. But utilities need to jump-start the process by souping up customer service first. The old maxim still applies: if you want someone to take an interest in you, take an interest in them first. Technology is changing rapidly. Human nature, it seems, is not.