Utility organizations are struggling to find a way to more effectively and efficiently communicate with their customers about basic information, including their amount due, ways to lower energy usage, and promotions. The service companies themselves may need a bit of "servicing" to help better educate customers on campaigns such as renewable energy initiatives and building awareness about new regulations while also lowering their overhead information technology (IT) costs. Utility companies have the opportunity to combine the powers of IT and marketing to optimize communication with customers while enhancing the workflow of their IT operations.
In the case of the Los Angeles Department of Water & Power (LADWP), this education all started with the bill and was driven by the realization that 25% to 35% of call center activity was related to inquiries about customer billing statements. The organization began this project with three objectives:
- Improve clarity and comprehension of customer invoices to reduce call center calls by 20%.
- Influence customer behavior through education to reduce energy consumption.
- Lower overall cost of statement operations through process automation.
To achieve this, LADWP sought assistance from industry experts to help design a solution, manage the implementation, and measure the new tactics.
Enlisting an outside party to coordinate, deploy, track, and manage a process as large as this can be a key to success. Often, a utility may not see a piece of the bigger picture, because there are no fresh eyes looking at the issue at hand. A partner can bring a new perspective to the table that may uncover the key the organization is looking for to help improve overall operations. This includes everything from printing statements, to ensuring accurate and timely delivery, to implementing useful analytics tools that help encourage customers to act—whether the desired action is reducing calls to the call center or participating in the next "reduction of carbon emissions" campaign.
Together, the LADWP and our company, Ricoh, were able to increase color usage in statements, making it easier for customers to read the bills; reduce the amount of paper needed for billing from six pages to four; redesign the overall bill to enable a more seamless, less-confusing experience; and much more. The new bill, launched in May 2011, helps LADWP educate and encourage customers to reduce energy consumption, especially during peak-use periods. It also establishes an infrastructure for accurately relaying future smart meter data as well as current conservation suggestions to a targeted, relevant customer.
More broadly, today’s marketers are facing higher return-on-investment (ROI) expectations, demand for stronger campaign results, and changing marketing channels. Many in the utility market are learning that the most effective and efficient way to maximize ROI is by aligning more closely with the IT department. This may seem to be an easier task than it really is. Having a partner as LADWP did, makes the process more seamless and easier to initiate.
LADWP is one of the first in the industry to take this approach. But according to a recent CMO (Chief Marketing Officer) Council study, "What’s Critical in the Utility Vertical," many others are looking for similar ways to enhance their marketing activities and increase their use of analytics to speak more directly to individual households or businesses.
The CMO Council study uncovered some salient points:
- Of the 77% of marketers who conducted some form of sustainability or carbon emission reduction messaging campaign, 29% failed to use any segmentation strategy (which would deliver a more targeted and relevant piece of information to each customer).
- 28% failed to measure the effectiveness of the campaign, a key step when proving the value and ROI of a marketing push.
- Only 30% of consumers recall receiving general information about "going green," which could suggest that either the message is not relevant, or there was no message at all.
Among the marketers who took a more targeted segmentation approach, leveraging individual household usage and behaviors, 73% rated their campaign a success. Interestingly, those marketers who failed to segment or target communications almost unanimously agreed that their campaigns were not a success.
This report demonstrates that utility marketers have an audience that is ready, willing, and eager for engagement, as long as the communication is relevant and speaks to the individual customer’s service and solutions. Customers have demonstrated that they want engagement, and that they will repay utility companies with advocacy and positive word of mouth.
—Jay Robinson and Lee Gallagher work for Ricoh Production Print Solutions. For more information, visit www.gobeyondthemeter.com.