Customer Connections + Corporate Services

The Utility Sector Customer-Focus Challenge

At The Engine Room, a utility-sector service provider and performance consultancy firm, we observe and participate in developing trends across the industry. One of these trends is the creation of centralized customer connect groups, which have the responsibility of being the first point of contact with customers.

According to the J.D. Power 2016 Electric Utility Residential Customer Satisfaction Study, there have been measurable, annual improvements in customer satisfaction because of this focus. However, electric utilities struggle to match other industries in customer satisfaction. In the J.D. Power study, satisfaction is calculated on a 1,000-point scale, with electrical utilities averaging 680 points. In comparison, auto insurance companies averaged 811, retail banking scored 793, and airlines scored 726.

The reported benefits of centralized customer connect groups typically include lowering costs and making contact with the utility easier. Many in the utility sector reference what other industries do with their customer service processes by designing their own customer connect capability. However, we see that the type of interactions utilities have with their customers is quite different compared to other industries. Some customers are looking for complex connections, while others call with billing concerns. Then there are the ratepayer customers who don’t call at all, yet they have concerns about cost and system reliability.

Another difference between utilities and other businesses is the degree to which answering a customer’s question requires engaging with additional points of contact.

Consider that when a customer contacts an airline, the customer service representative (CSR) can often tell the customer whether a plane ticket is available, and then a credit card operation completes the transaction. In comparison, many of the customer interactions within utilities require input or data that the CSR does not have at hand, as it comes from others in design, engineering or billing groups.

In pragmatic terms for utilities, the effectiveness of the customer service processes and achieving a desirable level of customer satisfaction is more complex than merely adopting a centralized, customer connect structure.

We see that customer connect groups often evolve through three phases: The first and most straightforward phase is developing the functional team and leadership. The second phase involves integrating customer connect with the rest of the utility’s planning and scheduling process. The third phase involves strategies to reduce customer effort.

While there can be challenges getting a customer connect team up and running, we see that the more significant challenges, which can determine success or failure, are related to phases two and three, which we will explore further.

Whether a utility adopts a centralized customer connect group or not, it does not change the reality that most customer requests for work must be planned and scheduled. This requires that they be prioritized amongst all the maintenance and capital work the utility is also attempting to complete. The creation of centralized customer connect creates another group, along with asset management, engineering, design, scheduling and operations, which needs to participate in planning and scheduling.

However, given that the planning, scheduling and execution process is so critical in utilities, it begs the question: Why is it often such a major source of frustration? The difficulties are not normally complex technical issues — utilities are good at those. We tend to see planning and scheduling difficulties are often people issues, and resolvable ones, at that.

While we acknowledge that every organization is different, we do see a “top four” of the most common, nontechnical problems that can affect a planning, scheduling and execution process:

1. Conflicting objectives
When it comes to high-level strategic objectives, such as “safety first,” we tend to see alignment throughout the organization. However, when it comes to priorities in planning and scheduling, the devil is often in the details. Everyone, from crews to engineering professionals to executive leadership, has deeply held motivators that influence how they prioritize work. We often see:

• Disagreement about which customer’s project should be given priority, and how it ranks relative to other work;
• Disagreement about who gets to do the work and how to resolve crew capacity imbalances; and
• Angst around scheduling maintenance. It’s rarely sexy, it’s expensive and it can often be deferred. But for how long?

2. Decision-making rights
Even if managers within the utility have their own views around priorities, planning and scheduling should still be relatively straightforward. Of course, that depends whether people are clear on who is entitled to make planning and scheduling decisions, and that people respect those decisions. However, we routinely see organizations where:

• The question, “Whose decision is it?” cannot be answered clearly;
• The value of consultation is confused with giving those being consulted veto powers;
• Decision-making is described as “shared,” but with no clear solution when the parties don’t agree; and
• Decisions that are made one day are revisited the next day, because somebody did not really agree with it.

3. Failing to incorporate local knowledge
Many utilities have centralized or outsourced aspects of their planning and scheduling process. It’s common to see the engineers and designers developing plans in one city for the crews in a different city. That works well when the engineers’ view of the situation on the ground at the job site is perfect, but it’s typically not the case. On the other hand, the local crews know the neighborhood and, while they may not be engineers, they know what’s there. In theory, it should be easy to get that local knowledge from those who have it to those who need it, but there often are barriers:

• Engineers and planners often rely on electronic asset databases with flaws in the data;
• Engineers don’t have the time to do site visits;
• Employees in local crews don’t really have the time to respond to questions; and
• Some engineers don’t like to ask for input.

4. Improper accountability
Almost every employee in every utility understands that their boss is entitled to tell them what to do and will hold them accountable for their performance. What people object to is somebody from a different part of the company showing up and telling them what to do, or criticizing them for what they did. A principle to live by in effective organizations is that accountability must follow the lines in the organizational chart. Even in matrix organizations, the logic still follows that accountability must respect the organizational chart. However, it is surprisingly common to see unhealthy practices, such as:

• Planning departments or support groups “overreaching” and attempting to manage operational execution;
• Scheduling groups who think it is their role to hold operations accountable for getting work done on time; and
• Operations groups who worry that they don’t have enough work to do, so they take it upon themselves to tell designers what they need or invent make-work activities.

It’s not hard to imagine that if you have people feuding over planning priorities and an inability to make decisions promptly, then efficient customer connect processes and delivering customer satisfaction will be challenged.

While these types of problems are real, they are just symptoms of the root cause. Unfortunately, we see utilities redesigning their planning processes, restructuring the organization, buying new IT systems, and hiring more people to plug planning and scheduling gaps — only to discover that problems persist.

On the face of it, the solutions to planning and scheduling challenges are quite simple:

• Establish clarity around objectives and decision-making rights;
• Listen to the folks on the ground who have local knowledge; and
• Make sure that accountability follows the lines in the organizational chart, and that leadership is playing an appropriate role in the planning, scheduling and execution process.

Once the customer connect department is up and running, and planning and scheduling is working well, the next opportunity is to pursue strategies that improve interactions with customers. This brings utilities into territory that retail businesses have wrestled with, including questions of what creates customer loyalty and satisfaction. Intuitively, most of us believe that customer loyalty is impacted by things such as fair price, value and quality, but it’s more than that.

We see utilities that have put customer satisfaction strategies in place (such as providing accurate information regarding outage response and return to service) to improve customer satisfaction, which is a good thing. But many in the utility sector under-appreciate the factors that impact customer loyalty.

Specifically, research indicates that one of the most critical elements in whether customers think favorably about an organization is how much customer effort is required, especially when something has gone wrong.

A practical example is the reaction most of us have when faced with a flight interruption. Frequent flyers generally understand delays from bad weather or a mechanical problem. It happens, a delay is better than crashing. However, a simple delay can become infuriating depending on the way the airline treats you when dealing with the problem.

An interesting conclusion that is advocated by experts in the field, such as Rick DeLisi, customer service expert and co-author of The Effortless Experience, is that trying to make our customers more loyal may be the wrong strategy. It may be more appropriate to think in terms of avoiding doing things that make customers disloyal.

When customers try to deal with companies, especially when something has gone wrong, the drivers of disloyalty include:

• Repeat contacts (calling back multiple times)
• Channel switching (trying to contact in-person, through phone calls, website, letters, etc.)
• Transfers (getting passed from one person to the next)
• Repeating information (“I already gave you that number, why are you asking me again?”)
• Robotic service
• Policies and procedures customers must endure
• Hassle factor (“This experience is going to be a pain.”)

Recently, a member of our team was at a professional networking event. Somebody asked, “What do you do?” In answering the question, our team member mentioned working with the utility sector. That led to an unsolicited venting of frustrations from people around the table who were in the rental property business. These are people who interact with utilities frequently. They have to keep the power on in their units, while maintaining a good working relationship with the utilities. These are people who want to make sure the power bill is paid. What we heard was a litany of horror stories about power being cut off, receiving conflicting instructions from CSRs, being directed to the website to fill in forms (only to call back and be told the form did not make it), and CSRs who were so wrapped up in their own process, the customer was left with the feeling that there is little sense of customer service at the utility.

We are optimistic about the opportunity to improve customer service and the customer experience in the utility sector. The optimism comes from the fact that utilities are trying to improve, as evidenced by the trend in the J.D. Power annual survey. Our advice to utilities that are determined to improve is to examine their planning and scheduling integration processes and customer effort.

What makes us doubly optimistic is that the solution is not very expensive. The most effective strategies to improving customer experience and reducing customer effort are built on the following key principles:

1. Front-line employees control the customer experience.
The ideal goal is for front-line employees to provide customer service and make problems go away quickly and easily (without lavish spending), or with what customers perceive as “low effort” on their part.
2. Understand the customer’s wants and needs.
Most customer connect processes are designed to address the need of the utility. Customer satisfaction rises when the customer’s needs are met.
3. Simplify any and all processes.
To the extent that process complexity is inevitable, the key is to not burden the customer.

These principles around customer satisfaction and customer effort are relatively simple to articulate and train. However, we believe that the real opportunity arises from coaching front-line employees and their leaders in techniques and language that create a feeling of advocacy. Advance the ethic that employees are taking a position of active support on behalf of customers.

Studies have indicated that CSRs who advocate for customers can reduce customer effort by 77 percent. Combining that with effective planning and scheduling can only improve customer satisfaction.

About the Author

Duncan Kerr, The Engine Room Consulting Group
Duncan Kerr is a seasoned operations executive and consultant with The Engine Room Consulting Group with more than 28 years’ experience. He has spent half his career working in industry leadership roles spanning operations, engineering, asset management, supply chain, general management and capital projects.