understand, empower and serve your customers better

SURVEY REPORT

Understand, Empower and Serve Your Customers BetterA joint PennEnergy/Cognizant Survey

Report on: “Customer Self-Service:

Challenges and Opportunities in the

Utilities Sector”

2 Foreward 3 Survey Summary 11 Appendix 16 Glossary

SPOnSOREd BY:

http://www.cognizant.com

PennEnergy :: SURVEY REPORT :: sponsored by

2

Foreword

ThE COnSUmER REVOlUTiOn has reached the energy sector. The

energy customers of today are more demanding and more digitally

connected than ever before. They want to have choices and to be

in control. Customers also want the convenience of conducting

transactions on their own and in their own time. They expect personalized

services, proactive cost saving tips and better products. These expectations are

driven by the customer’s experience with other consumer-friendly industries

such as Banking, Retail and Telecom.

Customer behaviors are changing, even as utilities continually upgrade their

processes and technology platforms. Not surprisingly, individual utilities are

at various levels of maturity along this paradigm shift. Some have successfully

transitioned away from the traditional cost-driven customer service model and

towards a more nimble and proactive approach focused on delivering responsive

and personalized customer experience. Others are lagging behind.

To better understand this tectonic shift, Cognizant partnered with PennEnergy to

ask utility organizations how they are addressing the core issues of cost, operations,

innovation and - perhaps most importantly in this changing industry - customer

relationships.

The results of that survey are powerful and unequivocal - consumers will

increasingly influence the utilities’ customer engagement strategy. Customer savvy

organizations are learning that one of the best ways to serve customers is to let

them serve themselves. Those forward-looking organizations are reaching out

where customers spend most of their time – the internet, the smart phone and

social media.


3

Survey Summary

ThiS SURVEY YiEldEd a number of key insights. Utilities can use those

findings to define and implement initiatives that will help them better

understand and serve today’s demanding customers.

Self-Service: At the heart of a superior customer experience Enhanced self-service is key to delivering the experience today’s customers seek.

We asked executives to identify their top customer service priorities. The response

was clear: Utilities no longer treat customer service as a transactional means to

reduce cost, and many have transitioned to

focus more on the customer experience.

Over 76 percent of respondents indicate

that extending and enhancing customer

self-service is an important part of their

overall customer service efforts. Innovating

customer self-service is a priority for many

utilities, with 76 percent of respondents

indicating they are seeking enhanced self-service features. Utilities are also working

to launch self-service-oriented smart phone applications.

Other Key Customer Service Priorities are:

:: Improving call center operations (67%)

:: Introduction or extension of smart meter analytics (61%)

:: Reducing the overall cost of customer service efforts (61%)

:: Innovation - Introduction of new products and services (57%)

:: Introducing smart phone apps (30%)

:: Modifying or replacing CIS (25%)

Understand, Empower and Serve Your Customers Better

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Survey respondents gave a number of reasons for why they were seeking enhanced customer self-service capabilities.

Improving customer satisfaction was by far the number one driver for strengthening

customer self-service, cited as top priority or important by 97 percent of responding

utilities.

Some 75 percent of respondents said

improving business processes was

important, or a top priority, when

considering customer self-service. Other

rationale included improving brand

image, with 71 percent and reducing

operating costs or providing new features,

at 68 percent of respondents each.


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Multi-Channel Self-Service: Web is the preferred ChannelTo maximize adoption rates, utilities must employ the optimum delivery channel for

various self-service functions.

WhEn giVEn a choice in how to deliver and access self-service

capabilities, the survey indicated that both utilities and their

customers prefer Web-based solutions.

That result is not surprising. The Web as a channel has evolved

for over two decades, and in its current state of maturity provides all the service

capabilities most customers expect.

After the Web, Utilities’ order of preference for self-service channel is Interactive

Voice Response (IVR), followed by Mobile and Social Media. In comparison,

customers’ preference for channel rates Mobile and Social Media higher than IVR.

One possible explanation for this disconnect could be the lack of other viable options

for the Utility, as Mobile and Social channels are still in their nascent stage. However

for the success of the overall self-service program, it’s critical that the utilities design

their channel strategy based on the customer’s channel preferences.

Customers are very much at ease using smart phone apps to handle daily utilitarian

tasks and to access banking, retail and other services. Utility companies are slowly

gaining familiarity with this rapidly maturing channel, and many are launching

apps for transactional features and online account management. Yet for many

utilities, implementation of the Mobile channel is still in its infancy.


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While utilities are focusing on multi-channel

service delivery, it is important to understand

and leverage the specific capabilities of each

channel. The survey results highlighted

customer-preferred options for various

activities.

The Web channel is preferred for all available

utility self-service functions, including

billing, payments, service order creation,

outage searches and the filing of complaints.

IVR systems are the second most-preferred

channel for accessing billing and payment-

related information and updates on service outages. This ranking is due to the

limited interaction capabilities of the IVR channel.

Mobile applications – and we will see more of them over the next few years – are

preferred for electronic billing and for accessing information on outages and energy

usage. Mobile payment channels are also maturing.

Social networks can be used to accept and manage customer complaints, and to

deliver information on service outages.

To maximize self-service adoption, utilities must deploy the right channel strategy

and should leverage the channels customers prefer.


7


Key factors for success of self-service Technology, availability and reliability – along with customer awareness and education

– are the keys to self-service success.

WhaT faCTORS mOST

affect the success

of a customer self-

service effort? Survey

respondents cited the following:

:: Inertia along with unwillingness on

the part of customers to try these new

services. (40%)

:: Availability and reliability of self-service-

oriented technology. (28%)

:: Customer awareness and the need for education. (18%)

:: Security concerns were somewhat minimal. (10%)

To address those challenges, most responding utilities indicated that they have put

self-service technology and infrastructure upgrades on their planning roadmaps.

Utilities are also working to create greater

customer awareness about their self-

service capabilities. Bill inserts (71%) are the

most popular method to build self-service

awareness. Social media (46%), direct mail

and customer call are also being used.

Incentives such as bill credits or vouchers

are used less often as a means to create

customer awareness and interest in online

capabilities.


8


The need for a transformation partnerCreating a customer-oriented utility can be tough, and requires both internal efforts

and strong external partnerships.

UTiliTY ExECUTiVES RECOgnizE the clear value of next-generation self-

service capabilities for their customers and for their own organizations.

Yet those utility leaders also recognize a number of challenges in their

efforts to deploy self-service solutions.

Survey respondents cited the following challenges they faced in digital

implementation:

:: Securing the needed budget was a primary challenge (67%)

:: Timely availability of internal resources (65%)

:: Challenges of aligning with potential suppliers (64%)

:: Availability of in-house expertise (59%)

While quickly evolving technology offers

real possibilities for richer service channels

and greater functionality, utility companies

often struggle with how best to leverage

those advances.

Survey respondents noted that the lack of

internal experience often limits the benefits

they can realize from these emerging capabilities. Even when they have the needed

resources, internal groups often cannot focus on critical self-service projects in a

timely manner. This often leads to delays in the development and implementation

of much-needed new self-service projects.

For most utilities, digital implementation needs considerable internal effort and a

very strong external partnership. There is a clear need for a trusted advisor and transformation partner to deliver the full value of a digital implementation.


9


To Conclude

TO KEEP UP with ever-changing customer preferences, utilities must

revisit their customer engagement strategies. The focus should be on

understanding the pulse of the consumer and providing the best possible

customer experience.

The results of this utility industry survey highlighted the need for a comprehensive

digital agenda to provide:

:: Connectivity across all available channels

:: A consistent cross-channel experience

:: A right-channel strategy

:: Improved features and enhanced reliability in existing channels

Utility customers will clearly benefit from channel innovations designed to support

seamless transactions and a more consistent and positive user experience. A better

self-service experience will improve customer loyalty, retention (‘stickiness’) and

adoption.

Forward-looking utility executives can leverage these strategies to reduce operating

costs, while simultaneously enhancing overall customer satisfaction.


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Survey Methodology

fOR ThiS SURVEY, we surveyed nearly 104 utility executives in North

America. The survey sample consisted of electric utilities (78.8%), gas

utilities (34.7%) water utilities (21.2%). The numbers are a deliberate

overweight towards electric utilities, due to the major focus on customer

satisfaction and energy efficiency

in that sector.

Survey respondents included

senior utility executives in the

position of Director or above.

This sampling was selected to

provide insights into high-level

future strategies to improve the

customer experience.

With respect to the customer bases

of surveyed utilities, over 35% of the

utilities surveyed have more than

1 million customers. The focus

was primarily on utilities with a

customer base of at least 500k.

This sampling provides insight into

the customer service strategies of

various sized utilities.

By surveying utilities

across various market

sizes and ownership

structures, the survey

supports conclusions

about customer service

strategies across various

segments.

11


Appendix

1. Please rate on a scale of 1 to 5 the top Customer Service Priorities you plan to address in the next 2 years (1 being not important and 5 being Top Priority).

a. Cost Reduction

b. Improving Self-Service Features

c. Leveraging Smart Metering Data

d. Modifying or Replacing the Customer Information/Billing System (CIS)

e. Introducing New Products and Services

f. Implementing Smart Phone Apps

g. Using Social Media as a Customer Service Tool

h. Improving Call Center Operations

2. On a scale of 1 to 5 (1 being not important and 5 being mission critical) how important is Customer Self-Service (CSS) to your customer service strategy?

3. What are the key investments you will be making in Customer Self-Service (CSS) in the next 2 years?

4. Please rate how important the following potential benefits are when considering investment in Customer Self-Service (CSS): (1 being not important and 5 being Top Priority).

a. Reduction in Operating Cost

b. Improving customer satisfaction

c. Providing New Self-Service Options

d. Reduction in Call Center Call Volumes

e. Improving Business Processes

f. Increasing Sales by providing an additional sales channel

g. Improving Brand Image

5. Please indicate which channels customers can use to interact with your company for the following functions today.

a. Bill Information & Payment- Kiosks

b. Bill Information & Payment- IVR

c. Bill Information & Payment- Website

12


Appendix

d. Bill Information & Payment- Mobile Apps

e. Bill Information & Payment- Social Media

f. Bill Information & Payment- Not Available

g. Outage Information- Kiosks

h. Outage Information- IVR

i. Outage Information- Website

j. Outage Information- Mobile Apps

k. Outage Information- Social Media

l. Outage Information- Not Available

m. Energy Usage Analysis/Goals/Tips- Kiosks

n. Energy Usage Analysis/Goals/Tips- IVR

o. Energy Usage Analysis/Goals/Tips- Website

p. Energy Usage Analysis/Goals/Tips- Mobile Apps

q. Energy Usage Analysis/Goals/Tips- Social Media

r. Energy Usage Analysis/Goals/Tips- Not Available

s. Move in/Move Out- Kiosks

t. Move in/Move Out- IVR

u. Move in/Move Out- Website

v. Move in/Move Out- Mobile Apps

w. Move in/Move Out- Social Media

x. Move in/Move Out- Not Available

y. Home Energy Management- Kiosks

z. Home Energy Management- IVR

aa. Home Energy Management- Website

bb. Home Energy Management- Mobile Apps

cc. Home Energy Management- Social Media

dd. Home Energy Management- Not Available

ee. Complaints- Kiosks

ff. Complaints- IVR

gg. Complaints- Website

hh. Complaints- Mobile Apps

ii. Complaints- Social Media

jj. Complaints- Not Available

kk. Enrollment for Products and Services- Kiosks

ll. Enrollment for Products and Services- IVR

mm. Enrollment for Products and Services- Website

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nn. Enrollment for Products and Services- Mobile Apps

oo. Enrollment for Products and Services- Social Media

pp. Enrollment for Products and Services- Not Available

6. Please rate the popularity of the following Self-Service Channels. (1 being Unpopular and 5 being highly Popular)

a. Kiosks

b. IVR

c. Web (Online)

d. Mobile App

e. Social Media

7. Please indicate the current status of the following Self-Service functions of the Online/Web Channel.

a. Bill Presentment

b. Online Payment

c. Enrollment for Product and Services

d. Outage Search and Reporting

e. Energy Usage Analysis/Goals/Tips

f. Move in/Move out

g. Home Energy Management

h. Online Chat

i. Complaints

8. Please rate the popularity of the following Self-Service functions. (1 being Unpopular and 5 being highly Popular)

a. Bill Presentment

b. Online Payment

c. Enrollment for Product and Services

d. Outage Search and Reporting

e. Energy Usage Analysis/Goals/Tips

f. Move in/Move out

g. Home Energy Management

h. Online Chat

i. Complaints

Appendix

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9. What percentage of your customers use at least one of the Self-Service functions your company provides?

a. Under 10%

b. 10% - 24%

c. 25%- 50%

d. Over 50%

10. What are the challenges customers are facing in adopting Customer Self-Service (CSS) in your opinion?

11. What is your company doing to promote Self-Service to customers (check all that apply)?

a. Direct Mail

b. Bill Inserts

c. Free SmartPhone Apps

d. Contact Customers by Phone to generate awareness about Self-Service options

e. Open houses and Public Forums

f. Incentivizing Self-Service (Bill Credits etc)

g. “How to” videos available over Web

h. Promoting Self-Service over Social Media Channels

i. Other (please specify)

12. Which of the following best describe how you manage Customer Self-Service (CSS) implementation?

a. Internal Staff Manages It

b. Seek out Third Party Out-of-Box Solutions

c. Outsource Development and Maintenance

d. Hybrid Model- Internal Staff and Outsource

e. Other (please describe below)

13. how much do you plan to spend on Customer Self-Service (CSS) initiatives in the next 3 years?

a. Under $500,000

b. $500,000- $1 million

c. $1 million- $5 million

d. $5 million- $10 million

e. Over $10 million

Appendix

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14. On a scale of 1-5 (1 being not Prepared and 5 being Very Prepared) rate how prepared you are in implementing your Customer Self-Service (CSS) initiatives.

a. Securing Budget

b. Right internal expertise/skills

c. Availability of internal resources

d. Meeting customer expectations/demands

e. Integration with other systems

f. Security Issues

g. Alignment with suppliers/partners

15. Which of the following services does your company provide (check all that apply)?

a. Electric

b. Natural Gas

c. Water

d. Other

16. is your retail electric service deregulated?

a. Yes

b. No

17. Please select the type of utility you work for.

a. Municipal Utility

b. Public Irrigation District/ Public Utility District

c. Rural Electric Cooperative Utility (REMC)

d. Federal/Crown Utility

e. State/Provincial Utility

f. Investor-Owned Utility

g. Competitive Energy Retailer

h. Other (Please specify)

18. how many customer accounts does your utility serve?

a. Under 100,000

b. 100,000- 500,000

c. 500,000 – 1 million

d. 1 to 3 million

Appendix


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Glossary

Customer self-service. Methods and processes that allow customers to interact

with the utility at their convenience. Often used in a Customer Relationship

Management (CRM) environment, CSS is used to handle account information

management tasks a customer can and will manage on their own.

Interactive Voice Response (IVR). Can include a range of voice-oriented self-

service methods, including automated interactive voice, interactive voice and video

response, outbound dialing and speech-enabled self-service systems.

Web self-service (WSS). Self-service delivered specifically through a utility’s

website. Customers can sign in to a web portal, then update their account, request

information or conduct a transaction.

Mobile self-service (MSS). By optimizing the customer experience for mobile

devices and browsers, mobile self-service extends WSS capabilities and supports

interactions that can be contextualized with location, service history and other

variables.

Social. To fully exploit the promise of online self-service, utilities can provide an

experience similar to that of the Web 2.0 and social networking environment,

including forums, blogs, tags, wikis, video and online support.


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About CognizantCognizant is a leading provider of information technology, consulting and business process outsourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise and a global, collaborative workforce that embodies the future of work. Cognizant serves energy and utilities companies with a wide array of strategic consulting and business process services solutions, supported by proven IT frameworks and accelerators. Five of the top 10 global utilities companies trust us to strengthen their businesses with solutions for plant automation and supply chain optimization, as well as retail, billing and customer care.

Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.

About PennEnergyPennEnergy serves global energy professionals with the broadest, most complete coverage of industry-related information, with resources to help effectively perform critical job functions. This includes content from all PennWell Petroleum and Power brand and other industry sources, PennEnergy.com delivery original industry news, financial market data, in-depth research, maps, surveys, statistical data and equipment/service information.

For more information on PennEnergy’s resources for energy professionals and to subscribe to our free eNewsletter, visit www.pennenergy.com.

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