Energy Strategy
Satisfying Customers Online?
October
15, 2000
By Paul Shea
Use
new measures to find out, or be left behind.
"How
well are we meeting customer expectations?"
It's a question
I hear at energy companies all the time. For years, utilities have measured
their performance through mass-mailed customer satisfaction surveys. Completed
forms would flood in, and marketing and sales teams would evaluate them.
It's been a good approach in many respects. But annual survey mailings
alone won't cut it in a deregulating energy market where business increasingly
is conducted via the Internet.
As a growing percentage
of customers is able to choose their electric and gas suppliers, energy
companies have become more proactive about meeting customer expectations.
They pour over tools such as the J.D. Power and Associates/Navigant Consulting
"Electric Utility Customer Satisfaction Study," to gain a better understanding
of how they perform compared to competitors. Poor rankings can mean that
an energy company is vulnerable to losing customers to a more customer-focused
provider.
The number of
variables for measuring performance has grown significantly with increased
use of the Internet. Customers now can access the energy provider using
the web, and receive in real time, anytime, products and services that
once required assistance from a customer service representative. And the
impact of the Internet will only grow. There is no doubt that energy providers
that choose not to use the Internet for e-business or that do so in an
ineffective or limited way will reap the consequences. As these firms
face customers that have more information and switching ease than ever,
their survival will depend on exploiting the potential of the web.
Energy
Initiatives are Hit or Miss
Several energy
companies have been aggressive in using e-business to better serve customers.
Florida Power
& Light uses its website at www.fpl.com as a vehicle for offering products
and services to customers, as well as information on current events, storm
preparation, and home and business safety. For example, the site offers
customers opportunities to save on their energy bills through a free home
energy survey for residential customers and energy-management services
for business customers.
Detroit Edison
is another company that's been innovative in e-business. Through its site
at www.detroitedison.com, the company allows its business customers to
review online monthly bills and energy consumption costs, and receive
graphical analysis for use in improving energy efficiency. This tool,
"Energy Audit," helps companies forecast annual usage and spending, as
well as time-of-day usage and seasonal expenditures.
Though FP&L and
Detroit Edison have taken the lead in e-business, many energy companies
continue to offer little in the way of online products. Recently I contacted
a Northeast utility and asked the customer representative to explain the
Internet services being offered, and why I should use its site instead
of a competitor's. Unfortunately, the representative was not familiar
with how the site operated, nor could he offer a reason I should use the
utility's website. Instead, he suggested that I e-mail the utility for
Internet support.
I found this was
a common scenario when I called random energy providers and utilities
for information. Based on my experience, energy companies that fail to
implement e-commerce initiatives will be rewarded with less than stellar
results, regardless of their speed, innovation, and flexibility in other
business areas.
Too
Soon for e-Business Measures?
It is the rare
energy executive that would launch an initiative without establishing,
at a minimum, a means for measuring the return on investment over time.
My research and discussions with energy practitioners reveals, however,
that while the use of e-business continues to increase in the industry,
the ability to measure its impact is limited. But this need to measure
the positive and negative results of Internet investment will increase,
and once benchmarks are established, the findings will be useful.
For now, at a
minimum, utility companies should develop simple cost-benefit models that
analyze online spending patterns, customer "hits" on a website vs. Internet
products sold, and Internet spending per customer vs. total marketing
spending per customer. These tools seem trivial and traditional, but they
are effective. A company may need to weigh the value of an initiative
with a negative or breakeven cost-benefit, regardless of its glamour.
Additionally, energy companies should not lose sight of traditional sources
of feedback-namely, customer satisfaction surveys.
Some energy providers
allow customers to contact them through e-mail. The majority of the time,
these communications are informal, and the level of attention they receive
is based on the customer's size and energy spending. Energy firms would
benefit from developing online customer satisfaction surveys, and using
the data gathered to improve their web initiatives. They also should let
customers know what changes they can expect based on survey findings,
and when. The personalization and speed of online interaction will help
energy companies better meet customer expectations and improve loyalty.
For the companies
that have taken a chance with e-business, the investment appears to be
worthwhile. For those that remain unsure of how to take advantage of the
Internet, there are plenty of opportunities to launch initiatives already
proven by the first-movers. But all energy companies need to focus on
measuring the success of their efforts. Regardless of this e-business
trend, the basics of serving customers won't change. New products will
be launched to meet customer demands, companies will need to be competitive
on price and service, and shareholders will insist on having consistent
growth. Ensuring these fundamentals will require measurement and customer
feedback.
Paul Shea is
a project manager at BusinessEdge Solutions, Edison, N.J. He has been
providing energy consulting and solutions to clients for more than five
years. Please contact Shea at pshea@businessedge.com.
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