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It pays to be proactive: How two utilities cut their cost to serve

Winter is here, with January’s Winter Storm Jonas dumping 2 feet of snow on America’s eastern seaboard and blizzards still pressing toward the midwest.  Low temperatures mean high energy bills. And for energy providers, high bills mean a major spike in call volume. Overall, 30 to 50 percent of calls to utility contact centers are related to billing. Unexpected high energy bills are frustrating for customers. They’re also expensive for utilities and energy retailers, which hire and train skilled customer service representatives to respond to customers’ questions. From both a customer experience standpoint and a financial standpoint, there’s a strong incentive to prevent high bill calls before they happen.
30-50% percent of utility calls are related to billing
That’s why utilities around the world are turning to proactive energy alerts. Like cell phone alerts that tell you when you’re going over your data plan, or alerts from your credit card company when you’re approaching your credit limit, proactive energy alerts warn customers when they’re headed for high energy bills. Most importantly, they warn about high bills before they arrive, giving customers time to course-correct.
Proactive alerts can help utilities reduce their cost to serve —while increasing customer satisfaction.

In 2013, Baltimore Gas and Electric Company (BGE) became the first utility to try proactive energy alerts. In collaboration with Opower, they sent their customers weekly electricity updates, showing customers, for example, their electricity use on Tuesday compared to their energy use on Saturday. Last year, BGE added high usage alerts to their proactive portfolio, notifying customers of potential high bills and offering tips to save energy. BGE’s investment in these alerts is paying off.  A December 2015 customer engagement study found that customers who receive BGE’s high usage alerts and weekly energy updates are 7% less likely to call into the contact center. Customers who receive proactive alerts aren’t surprised by high bills, and they’re also better able to answer their own questions about their energy use —rather than calling a BGE service rep). Proactive alerts can also help them understand why their bill might be higher than normal: for instance, if the weather in a given month is colder on average than the month before.

Customers who receive BGE's alerts are 7% less likely to call
These outcomes translate to big cost savings for BGE, especially during their service reps’ busy winter season. Proactive alerts can also improve customer satisfaction. In a survey, 85% of BGE customers who received weekly energy updates reported liking them, and 72% found the included tips useful and easy to understand. Additionally, over half of BGE high usage alert recipients said the emails were informative, and that they were happy to receive a warning about high energy usage before receiving their bills. With results like these, it’s no surprise that JD Power’s 2015 consumer research names proactive alerts a top area of focus for utility customer service. New Zealand’s Mercury Energy already knows that it pays to be proactive. In 2013, Mercury began sending weekly energy updates to its customers. Mercury’s proactive alerts encouraged customers to use less energy and take action on the web, like exploring Mercury’s Good Energy Monitor web portal or following suggested energy efficiency tips. “The typical pain point in our product category is that you don’t know how much of our product you’re using until the bill arrives — and then it’s too late to do anything about it,” says Ben Harvey-Lovell, Mercury Energy’s Head of Marketing. “So by delivering a whole suite of communications that are about breaking down that mystery, and giving customers the information they need in a timely fashion, we’ve done a great job making them like us a little bit more.”
"We've achieved a massive uplift in customer satisfaction."
As a result, Mercury saw the number of calls into their contact center fall. “What we’ve achieved is a reduction in churn, a reduction in cost to acquire, a huge uplift in brand sentiment — and a massive uplift in customer satisfaction,” says Ben Harvey-Lovell. “So we’re delighted.” By investing in proactive communications, Mercury reduced the overall cost to serve their customers —all while making their customers happier.

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