October 10, 2018 | Blog
Many of our utility clients are searching for revenue enhancement. Most for profit and not for profit utilities desire to increase revenues as a means of increasing earnings or cash-flows. Promoting electric vehicles is definitely a beneficial electrification opportunity as well as converting fuel oil and propane customers to natural gas, all of which Apogee can support.
But don’t forget about operational efficiencies as a way to increase earnings and cash-flows. For not for profit utilities with an operating margin of 15% or a for profit utility with a net income margin of approximately 12%, every dollar of operating efficiency equates to $6 to $8 of revenue enhancement. Also, considering opportunity costs, operating efficiencies frees operating budgets for other initiatives and programs.
A straightforward way to drive operational efficiency is through enhanced customer communication strategies and improved customer service initiatives. Apogee’s personalized communication solutions have proven to increase customer engagement by a factor of six times over typical utility communications. Furthermore, by providing proactive and relevant customer communication that encourages engagement, a utility can expect a 15% decrease in customer call volumes. Assuming a customer calls the utility three times per year and average cost per call of $8.50 to $12.50 per call, a utility will save between $380,000 to $560,000 for every 100,000 customers. These savings do not consider the benefits from reduced truck rolls, improved payment collections and increased customer satisfaction. THESE CUSTOMER SERVICE SAVINGS EQUATE TO BETWEEN $2.3 MILLION TO $4.5 MILLION IN REVENUE; you have to sell a lot of kWh or therms to generate that amount of revenue!
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