August 3, 2022 | Newsletter
Susan Gilbert, CEO, Apogee Interactive, Inc.
Apogee Institute has provided hundreds of informative webinars over the years. Still, none have had higher attendance or been better received than “Managing Customer Expectations in the Face of Rising Bills” presented on July 21st by Jim Malcom, Apogee’s COO, and Adrian Chung, JD Power Director, Utilities Intelligence.
Jim set the stage for the presentation by acknowledging that many factors, including the war in Ukraine, are driving up energy prices, pointing out that prices follow the law of supply and demand. Given Russia is the second largest producer of natural gas in the world and the largest exporter in the world, war, sanctions, and politics are root causes. The EU is now stockpiling natural gas and asking customers to reduce use by 15% to have a safe winter.
Closer to home, US EIA data shows that 68% of US electricity generation is from fossil fuels and 38% is from natural gas. It is no wonder that natural gas and electricity prices are spiking. Last winter, some gas customers, particularly in the Northeast and Midwest, saw double and triple their typical winter gas bills. Few were prepared for that, leading to unhappy customers. All of this was made worse by pandemic-related financial impacts on consumers.
Elaborating on that, Adrian shared new JD Power research showing that today, 64% of consumers are considered financially unhealthy. The percentage of residential gas customers who say they are worse off now than they were this time last year rose from 18% to 26%. He also shared that average monthly bill amounts have risen to $113, $23 higher than they have been in 12 years. Shown on this chart, customer satisfaction, the black line, is trending down.
The answer to that critical question is portrayed in this chart. These 5 criteria drive price satisfaction. The most impactful is at the top, where customers reporting “Utility Helped Lower Bill” scored the highest rankings at 809, and on average, 25% of customers fall into that category. Other factors include being aware of conservation and assistance programs, if they were on budget billing, or were not aware of a rate increase.
More touchpoints drive higher satisfaction. Customers unaware of program offerings had the lowest overall scores of 690, accounting for 28% of customers. Scores jump to 745 when they are aware of products and services but not using them (31% of customers). There is a small bump of 11 points to 756 when a customer uses at least one service, but the big jump of 55 points to 800 is for the 48% of customers using 2 or more services. The most participated-in offerings included receiving home energy reports, peak savings programs, and using the utility’s online energy calculator.
Only 45% of customers recall 1 or more communications from their utility, meaning that 65% don’t remember seeing anything. When you look at customer sat by how many messages customers recalled seeing, the highest score of 800 is from customers recalling 10 or more communications. That says you can’t over-communicate, but obviously, the messaging must be relevant.
Xcel was one of the first large IOUs to launch Apogee’s Personalized Video Messages in 2018. That coincided with their Net Promoter Scores shooting up by 8 points when the industry average was flat. During COVID, with more communication, the industry average did move up, and now, with customers experiencing financial pressure and higher rates, both are trending down.
Jim Malcom added that customer engagement increased with subsequent messaging. In the Xcel pilot, the first message received a 5% Click-Thru Rate (CTR), the second, 14%, and the third produced a 16% CTR with Xcel’s base being between 2% and 4%, meaning the personalized videos received a 4 times higher engagement rate. Adrian added that the videos were an innovative technique that customers are not
familiar with, and they were personalized to their homes, making them far more interesting than other messaging.
Jim then played two examples of Personalized Videos that are wowing customers and helping them engage with the utility. The first explains why an electric customer’s bill is higher this month than last, then offers a budget billing program showing what the customer’s highest and lowest bills have been over the past year. Seeing the high and low helps customers see how having a steady bill amount each month helps with budgeting and keeps fluctuations from occurring.
familiar with, and they were personalized to their homes, making them far more interesting than other messaging.
Jim then played two examples of Personalized Videos that are wowing customers and helping them engage with the utility. The first explains why an electric customer’s bill is higher this month than last, then offers a budget billing program showing what the customer’s highest and lowest bills have been over the past year.
Seeing the high and low helps customers see how having a steady bill amount each month helps with budgeting and keeps fluctuations from occurring.
The second video is sent to customers just before the heating season and shares how much they spend annually to heat their homes and the percentage that is of their total energy costs. Then it gives tips likely relevant to that customer suggesting ways to lower their bill.
While we know utilities like to pilot anything new, the results are becoming so routine and predictable, perhaps it’s time to just take the results from more than 35 utilities who have now gone to scale with Personalized Video Messaging and start taking advantage of all its benefits.
Check out: Speaker Bios
In case you missed it – Download Here
Tip: Listen to the recording but LOOK at the separate set of slides because on the recording, some of the graphic data did not show.
Join Apogee’s CEO and Co-Founder Susan Gilbert for a 30-minute session where she will share the proven methods winning utilities are using to build lasting and meaningful relationships with their customers. Attendees will learn how various effective engagement strategies are reaping rewards for hundreds of Apogee-client utilities and their millions of customers. These methods are helping utilities by delivering higher customer satisfaction scores, empowering employees, and establishing trust with customers.
We’ll Discuss:
Oversample your residential customers to craft a strategy and refine customer engagement.
Smart Energy Consumer Collaborative (SECC) plans to conduct the Consumer Understanding of Billing, Prepay and Payment Options study to provide insight for utilities developing new rate structures, payment options, and communication and engagement efforts.
Specifically, around customer engagement, the survey will ask questions to gain insights into:
Utilities have the opportunity to oversample, which is a cost-effective way to gain specific insights from your customers. Apogee clients already using personalization and video messaging can use the oversampling to show the impact and see comparisons to the industry.
If your utility isn’t using Apogee’s outbound Personalization and Video Messaging, now is the perfect time to get started with a Pilot program — your oversampling will document the impact! Apogee is helping offset the cost of the Oversample project participation by discounting our pilot pricing. We too want to see more documentation of what we are seeing with this incredibly effective method.
Check out Speaker Bios
Jason McGrade, Deputy Director of SECC recently shared findings from their 2022 State of the Consumer report about utility consumer messaging effectiveness for decarbonization/ electrification, smart devices, and EVs during the Apogee webinar Customer Engagement 2.0.
In case you missed it – Download Here
Jim Malcom, COO, Apogee Interactive
Ben Franklin is credited with saying, “In this world, nothing can be said to be certain except death and taxes.” I contend that we can add higher energy costs during the extreme weather seasons to this list. Some energy industry experts speculate that energy costs for this coming winter could increase by over 50% from last year.
The energy utility industry is experiencing unprecedented disruption from global events. Although these events are not the result of the energy utility, your utility customers will likely conclude you are responsible. It is time for utilities to play offense rather than wait for the winter to play defense. This summer and fall, utilities should be educating customers about the upcoming winter cost increases, explaining why energy costs are going up, and communicating the actions they can take immediately to mitigate their financial burden.
We call it the 4 Cs:
Customers need to know their utility Cares about them and what is happening to their costs. Beyond Caring, the utility needs to show customers that they have:
Control of their bills. Online energy audits, referral to rebate programs, reminders of recommended thermostat settings are just a few examples.
Choice. If you have TOU rates, budget/levelized billing programs, special rates, or the ability to lock in a price for some time period, let customers know these options now. Encourage them to enroll in billing options, participate in energy efficiency programs, review their rate choices, and apply for financial assistance.
Convenience. Then make it convenient for them to enroll or take advantage of your offer. Not by mailing them a postcard or letter or doing a bill insert…Do it digitally with something personalized in video format that computes for them the likely savings of the option they are interested in and end it with Click Here to Enroll!
Lastly, once the increased winter costs occur, utilities should explain and monetize for to customers the factors driving their higher bills, including the impact of weather, thermostat settings, and higher wholesale energy costs, while also giving them reminders of the convenient options available for them to better control their energy costs.
While it is hot now, winter is coming, the train is rolling. Get on board now so you and your customers are ready when it pulls into the station. We typically get utilities up and running in 6 to 8 weeks, so now is a great time to begin.
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