Deriving economic benefits by successfully utilizing the Internet. Richard Huntley

Transcription

1 Deriving economic benefits by successfully utilizing the Internet. Richard Huntley

2 Deriving Economic Benefits from the Successful Utilization of the Web

3 Who is Nexus Energy Software? Global provider of software solutions that enables integrated utilities, competitive suppliers, market operators, transmission companies and state energy agencies worldwide to better manage energy-driven transactions and decision-making Unique, value-added applications that leverage energy information to enhance T&D network planning and operations, forecasting & settlement, billing, and customer service Nexus is working with over 80 energy companies worldwide, including utilities that serve over half of all households & businesses in the US Subsidiary of ESCO Technologies (NYSE:ESE)

4 Who is Nexus Energy Software?

5 Billing challenges Telephone Calls Fuel costs are causing increased calls Billing calls are taking longer for CSR s to explain the increases Many companies have limitations with CIS systems New or old they lack good Information for the Customer Solid accounting systems that don t necessarily provide the best platform for on-line interaction, bill variance explanation or support for innovative pricing and promotions Rate and payment options EPACT TOU, CPP, real time, 20/20 Fixed, flat. More options lead to more complexity Customer convenience expectations are set by other industries not by historical Utility offerings Complexity will only increase As rates continue to increase More calls from more confused people Bill size and bill volatility

6 Do utilities see things the same way as your customers? Utilities view Electronic Bill Presentment and Payment as Saving the costs of sending the statement Faster Collections Minimizing chances of missed or forgotten payments Customers view includes Understand where my money goes Manage my bills Control what I owe the utility Convenient methods of payments Knowing that they are getting value for money Do the current on-line billing tools really address customers needs?

7 EEI fall 2004 national Residential Customer Survey Most American s expect energy prices to continue to increase in the next few years In terms of energy-related issues, the cost of energy is rising as a significant concern Americans are hearing more about the need to use energy efficiently High importance placed by customers that utilities are working to keep rates low. This is the highest ranked driver of satisfaction of all measures Source: EEI Fall 2004 National Residential Customer Survey Source: EEI Fall 2004 National Residential Customer Survey

8 What are utilities trying to accomplish with the on-line channel? Enhance the company: Drive out costs Improve efficiencies Support innovative programs Enable the customer: Make the company easy to do business with Make the customer more successful Improve customer satisfaction Provide choices

9 What is inhibiting on-line success? Historically, utilities have looked at customer care as another channel for existing customer interactions Handcuffed by existing paradigms, business processes and CIS limitations Payment is inherently disjointed from usage A premise is metered on its aggregated use Customers are impacted by appliances issues Appliances use is affected by external factors such as weather, construction, lifestyle etc. Billing and payment is after the fact The causal relationships of factors leading to bill volatility are not well understood by the general public Most communication to enhance bill understanding is generalized, static and not personalized Customers don t understand what a KWH or Therm is or what it does for them

10 How others have leveraged the Internet experience Airlines Turned agent commissions into a service fee paid by customers Increasingly directly manage customer interaction Can you even consider going back to how limited phone booking was Amazon Redefined how books are sold Banks In a little over a decade have transformed themselves from teller based to ATM and PC based Enhanced methods of dealing with customer while driving costs out of the business These companies leveraged the Internet by transforming the interaction -- not just by adding a Web front-end to existing systems

11 Foundations to better web utilization Provide customers with added value Integrate analytic tools with information presentment Personalize answers to individual customers Interweave transactional ability Don t confuse Utility benefits with customer benefits Capture and leverage opportunities for more electronic interaction Capture s whenever possible Promote on-line availability Communicate more than just that a bill is available Utilize opt in personal communication

12 Turn the bill into a statement of value Create a new experience Combine access to the elements that matter Tell customers what they are getting for their money Communicate end use values Avoid the perception of taxation Especially in an environment of rising prices and complex rates

13 Answer key customer concerns with model-based bill analytics Address most common questions: Why did my bill change? Why is my bill different? By using analysis based tools you can Provides specific answers and help customers understand their issues so they don t need to call again Identifies factors that cause bill changes, AND specific contributions of each factor so that they can mange future usage

14 Provide customers with individual analysis capability Samples include Flexible summaries: usage & cost detail; year-to-year, side-byside comparison Table & graph formats - overlay degree days; billing period Ability to download billing data Links to specific usage analysis

15 Integrate analytic tools as a part of the on-line bill Interactive tools can address most common questions about bills Identify factors that cause bill changes, AND specific contributions of each factor Establish the utility as the source for energy information and support as customers expect

16 Interweave other transactional ability onto the bill Integration to payment Stimulate taking advantage of programs such as rebates Enroll customers for new products Promote rate offerings

17 Integrated newsletters can keep users coming back Personalized communications - based on the profile gathered Proactive - avoid future calls Ongoing seasonal content & tips Drive traffic Click through rates in excess of 20% Create marketing channel - promotes individually targeted products & services

18 Business customers expect specific functionality to address their needs Operational issues by business type Multiple premise analysis and comparison View a comparison between a specific bill and the baseline i.e. prior month, prior year Not the same as residential customers

19 Businesses also need operational Results $ Impacts quantified Descriptive narrative Visual milestone how much of my usage change have I accounted for so far? What happens if I change to hours of operation Calendar (weekday vs. weekend) effects Closures / holidays Thermostat schedule

20 Businesses need to address their industry-specific equipment Smart Initial Inventory geared towards the user s type of business Capture simple easy to understand inputs such as quantities of equipment

21 Case study results presented at Nexus 2005 annual Marketing User Group Avoided Calls - 32% of customers surveyed who were planning to call no longer needed to after using Bill Prism online Online Audits Increased - the number completed increased 3-fold after deploying Bill Prism AHT Reduction by 30 seconds when CSRs used Bill Prism for high bill inquires (10% reduction) ENERGYgrams produced click-through rates of 20%-45% back to website less than 5% unsubscribe Increased First Call Resolution - for high bill inquiries it went from 62% to 88% 12% of Nexus Clients will use ENERGYprism online in 2005 up from 9% in 2004

22 Company Overview Case study - Consumers Energy One of the largest combination utilities in the U.S. Servicing 6 million Michigan residents Nearly 2 million gas & electric customers Business Challenges Managing the growing volume of calls into the call center Communicating increases in energy costs Increasing customer satisfaction and educating customers on how to control their bills

23 Case study - Consumers Energy ENERGYprism Solution (Continued) Launched Home Energy Center in 2002 Bill Prism self-service and call center applications deployed in March and November 2003 respectively Enables customers to answer their billing questions online More effective and efficient call resolution for bill inquires Implementation 4-5 month deployment cycle for each ENERGYprism product Branded and customized to fit with Consumers existing site and needs XML-based Integration with legacy CIS

24 Promotion Strategy Case study Consumers Energy (continued) Multi-channel approach using existing low-cost channels: newsletters, bill notification link, bill envelope flap, etc. Using the right language in strategically placed links: Puzzled by a High Bill? Check Out Bill Analyzer to Lower Your Energy Costs Increased Bill Prism users by 45% from 2003 to 2004 (175K Users) Energy Center subscribers increased by about 100% after Bill Prism went live

25 Case study Consumers Energy (continued) Benefits Achieved Customers adopted Bill Prism as top self-service application: In 2004: 175K users (9% of all customers) In 2005: 231K users (12% of all customers) In % of users were return users 15% of users were planning to call, but found their answer and did not call* 83% of online users noted an increase in satisfaction with the utility* Reduce On-peak System Resources 30% of Bill Prism users go on to the Energy Center End-User Feedback: "I established a profile at your web site for my billing needs which I think is wonderful and easy to use " "I was able to view historical data concerning my account, make comparisons, and analytical decisions It makes paying my bill a little more pleasant and with the web features, more fun." "Excellent web site, excellent history, charts and graphs. Very informative, very useful." * Sheena Taborn Sept 2004 Nexus Client Conference

26 Company Overview Case study - Puget Sound Energy Serves about 1 million electric and 700K natural gas customers Territory includes large percentage of Internetsavvy users Microsoft HQ Business Challenges Improving customer communications in a time of increasing energy prices and peak resource constraints Increases in the number of billing inquires due to rate increases Implementing new Demand Response programs

27 Case Study Puget Sound Energy (continued) ENERGYprism Solution Launched Energy Centers in 2002 Launched My PSE Account mid-2005 Nexus Hosted Login Page ENERGYprism Dashboard is My PSE Account landing page Nexus Bill Prism applications Nexus Load Analysis module (replacing Energy Tracker ) Launched Bill Prism Contact Center application on

28 Case Study Puget Sound Energy (continued) Promotion Strategy Q Soft launch of Bill Prism invite to former Energy Tracker users (1200), and existing Energy Center users (360) Internal launch to PSE employees Oct aggressive launch of the new PSE.com Bill insert to Energy Wise Letter from VP Customer Care New navigational paradigm Re-purpose all web content January 2006 The first self-service solution Integrated Single User Sign On ENERGYgrams drive Energy Center traffic and encourage revisits

29 Case Study Puget Sound Energy (continued) Benefits Achieved More than 5% of customers per month are expected to use the application (46,000 in January) 128% growth in Energy Center users after launching the Bill Prism Dashboard (July - December) An additional 18,000 profiles were collected when users registered AHT reduction of more than 30 seconds for a high bill inquiry (about 10%) early results Higher First Call Resolution on bill inquiries ENERGYgrams produced click-through rates of 20%-45% back to website and less than 5% unsubscribe Users Completing a Profile 1,600 1,400 1,200 1, Home Energy Center Users Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month

30 Case Study - Pacific Gas & Electric Company Overview Delivers gas and electric service to about 5% of US population 5 million electric and 4.1 million natural gas customers JD Powers Ranks in the top quartile for customer service Business Challenges Increasing customer satisfaction bankruptcy and reliability perceptions Cost reductions -- major business transformation initiative Leverage efficiency and demand response programs to off-set load growth and delay capital investment to add capacity

31 Case study Pacific Gas & Electric (continued) ENERGYprism Solution Launched Energy Center in 2002 to meet state requirement of 10,000 home and 2000 business audits Localized for Spanish in 2004 Integrated Home and Business Bill Prism into My Account in 2005 Managing Critical Peak Pricing communications 2005 Pilot Implementation Bill Prism deployed and live in 4 months Usage and billing information integrated with SPL using XML Branded and customized to fit existing site

32 Case study Pacific Gas & Electric (continued) Promotion Strategy Make pge.com the primary customer service channel Strategically placed links on home page and in My Account Promotional panels on home page and within My Account Links within CPP program page Educate customers on how to better manage their energy use and cost Home Page Promotional Other initiatives include: Rotating Banner on home page Direct Mail and Bill Inserts Radio Ads marketing My Account Promotional

33 Analyze Bill self-service results since launch 160,000 residential customers used Analyze Bill (aka Bill Prism) in first six months (March August) 302,000 residential customers used Analyze Bill in 2005 (March December) Radio ad campaign started Unique Users 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - PG&E Bill Prism Users Mar Jun Aug Dec Month Total Bill Prism Bill Analysis Bill History

34 Analyze Bill survey results (March 2005 January 2006) 1. How satisfied are you overall with your experience using the Bill Analyzer tool? Extremely satisfied 34% Very satisfied 41% Somewhat satisfied 17% Not very satisfied 4% Not at all satisfied 4% Total 100% 2. How helpful was the Bill Analyzer tool in explaining why your bill changed? Extremely helpful 33% Very helpful 28% Somewhat helpful 20% Not very helpful 5% Not at all helpful 4% Total 100%

35 Analyze Bill survey results (March 2005 January 2006) 3. Did you intend to call Customer Service about your bill before using the Bill Analyzer Tool? 4. If you were planning on calling Customer Service about your bill, what was the primary reason for your call? Yes, I was planning on Calling 19% No, I wasn't planning on calling 81% Total 100% Question about a high bill 42% To get a history of my past usage 34% Question about a payment 24% Question about a rate change 0% Other - please specify 0% Total 100% 5. Now that you've used the Bill I won't need to call customer service about my bill anymore. 35% Analyzer tool which one of the following I will call customer service less about my bill. 33% statements best expresses your future I will call customer service more often about my bill. 3% need to call Customer Service regarding It will make no difference on how often I call customer your bill? service about my bill. 29% Total 100% 35% of customers surveyed who were planning to call no longer needed to call after using Analyze Bill

36 Home Energy Analyzer inside My Account site results (March December) In it s first three months, Home Energy Center audits increased 395% over audits for that period in the previous year 21% more customers left a profile when accessing the Home Energy Center via My Account compared to those visiting via public site 23% more went on to complete a second level of questions to describe in detail the appliances in their home Home Energy Audit Completed Audits 6,000 5,000 4,000 3,000 2,000 1,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month

37 Case Study - WPS Pilot On-Line Presentment and New Paper Bill Objective: Reduce calls 90% fewer bill inquiries from pilot participants Objective: Increase the use of self-service 40% receiving the paper bill with an e- mail follow-up went on-line Overall, pilot participants 7 times as likely to go on-line Objective: Increase customer satisfaction 90% of the participants found the revised value bill more understandable than the traditional bill

38 Case Study California CPP Pilot Program 2004 & 2005 Provided Participants with: Communications and notifications during and following critical peak events Personalized Program Report Cards online & print Education on how the DR program works Specific guidance based on home profiles and monthly billing data Quantifiable on-peak resource reductions from the information provided

39 Complexity Continues to Increase Energy Bill: page 1156, amending PURPA (italics added) "Each State regulatory authority shall conduct an investigation and issue a decision whether or not it is appropriate for electric utilities to provide and install time-based meters and communications devices for each of their customers which enable such customers to participate in time based pricing rate schedules and other demand response programs." Intent: If the business benefits and resource benefits make advance metering infrastructure (AMI) cost-effective, regulators should require it and ratepayers should pay for it.

40 AMI - What it Means for On-line Billing TOU rates will be in an increasing factor More complex and volatile such as Critical Peak Pricing As complexity increases so does the need for intelligent bill presentment and analytics Without this the demands on customer service will increase significantly Increases the need to move customers to the web The power on the web is needed even more as complexity increases Customer education is key Performing aggregation and complex calculations outside of the CIS creates less need for complex upgrades

41 Need for Sophistication in the Creation and Maintenance of Rate Options Increases Benefits to rapidly represent rates - no matter how complex - with NO programming Interval data-based Index-based Coincident peak Ratchet Curtailment Put Rate creation in the Hands of Rates not IT Test drive results for accuracy

42 AMI - Integrated Bill Analysis examples

43 Other Pricing Programs Such as Critical Peak Further Increase Needs for Bill Based Customer Centric Communication Critical Peak Pricing Bill Support Pilot for California Utilities a complicated tariff and a challenge for customers to understand (but with Nexus Bill Analysis in 2004), customer behavior actually did improve and peak energy usage was reduced. Mark Martinez, SCE

44 Summary Increase the reasons to use the web Surround transactions with value added opportunities Lead with tools that provide customer benefit Use the web to do what you cannot do today Not just what you already do Provide a holistic view of available options and programs Take a programmatic approach to migrating customers Build to accommodate tomorrow s pricing and billing world - not just yesterday and today Exploit the opportunity to provide functionality outside of the CIS to prevent the need to change out current CIS systems