New metrics for customer service?

What if engagement = revenue?

Phil Carson | Apr 16, 2012


An interesting white paper crossed my desk last week, so I thought I'd pass along a few points for discussion purposes.

"The Crossroads of Customer Metrics and Strategy in the Utility Sector: A Case for Alternative Metrics" was written by Jamie Wimberly, CEO of DEFG and EcoAlign, which puts out a regular series of findings in the customer engagement space.

As always, I'd recommend reading the paper itself, but I'll provide the paper's opening setup, then segue to some suggested, alternative metrics.

Customer service is evolving to accommodate changes wrought by smarter grids and "utility industry stakeholders are questioning traditional customer service metrics as indicators of performance," the paper begins.

Under traditional metrics, a utility could be providing excellent customer service, yet see its scores drop due to rising energy prices or storm-related outages—i.e., external factors. Or a utility may sacrifice customer service resources (due to budget constraints, e.g.) without seeing a dip in scores.

Some traditional metrics are at odds with each other, Wimberly argues in the paper. While some metrics focus on speed, others—such as first-contact resolution—may contribute to deepening the customer relationship. Surveys by DEFG have shown that utility customers prefer to spend more time on the phone with a customer service representative than to make repeated calls.

"If utilities cannot impact the outcome, how relevant is the metric?" the paper asked, rhetorically. "There's an expectation that elevated levels of customer engagement will be required to meet regulatory mandates and utility business objectives in the future. Customers are expected to become an integral part of the resource portfolio. Engagement is built and earned through trust. How, then, is trust in the utility to be measured?"

These are big questions, obviously, and the paper spends a half-dozen pages providing suggested answers. I'll try to capture the flavor of the thinking here.

First, utilities don't have to re-invent the wheel, because the cable television and telecommunications industries have found that customer engagement "begins with accountability, trust and passion (emotional ties), as well as the functional requirements of the interaction."

That said, the paper zeroes in on first contact resolution (FCR) as "becoming the single most important measure." Another metric—a measure of a customer's "ease of doing business"—is gaining ground in the form of a customer effort score or CES.

"In other words," the paper continues "what is the level of effort required to interact/transact with your company?"

While traditional metrics have focused internally on the effectiveness, including cost-effectiveness, of utility efforts at various customer touch points, the new trend focuses on measuring how well one meets customer expectations.

Aligning traditional measures with these new ones could provide utilities with a view of the overall "customer experience," the paper argues—though making that transition may be difficult while utilities "remain rooted in a regulatory structure that treats the utility's customer service costs as operating expenses with limited to no opportunity to earn a return."

"Right time metrics" used in other service sectors are designed to align "the right option with the right customer through the right channel at the right time," the paper continues. "Through this prism, customer metrics need to be more forward-looking, even predictive and tied increasingly to a customer of one rather than the traditional view of treating all customers the same."

So, how would investing time and money on new customer metrics improve customer satisfaction while lowering costs? The paper lists tactical benefits such improved levels of trust, but also fuller use of smart grid and customer-facing assets that drive efficiencies and better visibility into customer behavior with real-time impacts.

Those impacts might be improved predictions of how well customers might respond to, say, a demand response program so as to "measure and predict earnings potential as part of the resource portfolio."

In other words, customer service as a potential revenue-related function as opposed to a cost center, subject only to cost-cutting based on efficiencies.

The potential for developing new metrics for customer satisfaction will rely on four concepts, the paper argues: ease of doing business, performance, trust and transparency. Efforts in those areas may pay dividends as utilities seek to become "trusted energy advisors."

The argument makes a lot of sense to me. How about you?

Phil Carson
Intelligent Utility Daily






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