Investing in Infrastructure: Utilities Ramp Up Customer Service

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As the Clinton Administration aims to introduce federal mandates for electric utility deregulation, 16 states are already well into restructuring and deregulation with Massachusetts and California leading the way with plans that have gone into effect since March 1.

The shift from a monopolized marketplace to a competitive one is rapidly changing the way utility companies view their customers and call center operations. Whether adding new software, initiating new training programs, redefining the skill sets of customer service representatives or fostering a company-wide appreciation of delivering value to customers, utilities nationwide are finding that teleservices programs provide an immediate customer connection.

"We have made a big investment in communication technology to provide the latest tools to our representatives," said Leonard Anderson, a spokesman with Pacific Gas and Electric, a division of PG&E.

Boston Edison, Boston; Duke Power, Charlotte, NC; Pacific Gas & Electric, San Francisco; Georgia Power, Atlanta; and UtiliCorp. United, Kansas City, MO, are among the leading utility companies that have invested heavily in call center strategies. Meantime, some third-party energy service companies are relying on call centers to reach new and existing customers across the distribution territories that in the past have created geographic boundaries for service.

But the absence of a federal mandate on deregulation has created a complex environment of direct and telemarketing opportunities that are simultaneously restricting and encouraging proactive strategies. While some utilities companies can aggressively pursue new customers, others are restricted based on state codes. While some utilities have separated generation from transmission and distribution, other utility conglomerates are staying in the business of generation, transmission and distribution, a configuration that further muddies marketing restrictions.

And while some companies are targeting existing customers serviced by utility transmission and generation, others are going outside their transmission and distribution territories to lure new customers.

Nonetheless, investor-owned utilities, along with spin-offs, wholly-owned subsidiaries and third-party energy services firms, are making sweeping changes in organizational cultures and strategies that have spawned technological and training enhancements for their call centers.

"We have invested heavily in the infrastructures of our customer service centers all from the perspective of trying to prepare for the customer choice environment," said Louis Rephlo, vice president, customer care, UtiliCorp Energy Delivery, a division of UtiliCorp United. The company serves approximately 1.7 million electric and gas utility customers throughout parts of eight states. The company operates three call centers

Rephlo described his organization's call center strategy as a work in progress that began in 1994. "It is an effort to create an infrastructure on a telecommunications and data communications standpoint, as well as a business process approach to servicing the customer in a way that allows us to be cost effective and to retain a feeling from the customer that we do care about them."

UtiliCorp's multi-state service territory presents a challenge. "We are transitioning from an environment that is primarily in-bound to incorporate more out-bound. But we have to address that on eight different levels," said Rephlo. The out-bound initiative is targeted at payments. "Cutoff [of power] periods vary by state. Our service representatives have to maintain a level of knowledge that is much broader and flexible than most."

UtiliCorp has taken a proactive approach to restructuring while utilities in California and Massachusetts are operating in an already restructured environment. California faces a competitive arena with more than 200 companies from across the nation vying to provide energy to customers. But Pacific Gas and Electric maintains the distribution and transmission rights to customers throughout its service territory. Nonetheless, the company has embraced customer service improvements in an effort to maintain customers. The company operates four, 24-hour call centers in San Francisco, San Jose, Fresno and Sacramento, and over the past two years has expanded capacity of lines to handle in-bound calls more effectively and has increased call center staffing by 25 percent.

In Massachusetts, the state's biggest utility is evaluating a number of call center initiatives to better serve customers. Boston Edison recently tapped David Samuels to serve as vice president, customer care, which encompasses call centers. In his new post, Samuels is exploring a range of companywide and call center plans that include an organizational redesign that would shift operations from a functional to a customer-centric focus. He is also looking at segmenting customers based on values that make those customer groups unique. "Before customers were rate payers and not the serious focus of the business. One of the things we are doing is looking at organizing the customer side of the business, including call centers, by group rather than by function.

"We know what value means to residential customers in cities vs. suburban or in low income areas. We are training our representatives to integrate that knowledge into customer solutions," Samuels said.

The company is readying to launch the essence of its new focus with "One and Done," an over-arching customer service program that will impact call centers

"Customer service representatives need to have the training tools and knowledge so when they get on the phone with customers, they are absolutely focused on the quality and completeness of that solution and resolving it in the first contact," Samuels said. He noted that the company is shifting its focus based on consumer research that has revealed "fascinating things."

"We have established the concept of listening systems throughout our whole enterprise," he said. "A representative on the phone with a customer is being trained to look for clues and ask the right questions to gather information and get background clues. That kind of ambient data makes the customer service representative more knowledgeable on the phone."

With the new focus has emerged the need for new technology. Before, the company's customer service system was a billing system that operated on a mainframe and some old software. "That was fine when you operated based on throughput and efficiency. Over the past several months we have added a graphical user interface that allows our agents to go after a lot of information. We want to record every transaction, every answer, every household characteristic at every customer touch point and make that available to our reps on the phone."

Regardless of mandates in other areas of the country where deregulation is pending or in early stages, utilities are making shifts toward greater customer service. In the South, Georgia Power, a division of The Southern Co.'s, and Duke Power are steps ahead of the legislative curve. While Georgia Power has added new customer service centers, revamped hiring standards for representatives and implemented new systems, Duke Power has added a sales group and is growing out-band calls programs.

"From a call center perspective, that is a strategic point of contact with our customers, and we are beginning to understand what a competitive advantage it is to have a good call center," said Randy Weaver, customer service manager, Georgia Power. "It is more important than ever to communicate with customers, and we are tying to put the tools in place to allow call center consultants to do that."

Georgia Power operates two call centers in Atlanta and one in Macon, GA, and has a combined workforce of 275. The company also features one call center with 18 consultants to handle business and commercial accounts. The company is looking to improve its voice response unit operations and has recently integrated new software into call center workstations.

"It will allow us to keep better information on the customer. We're not there yet, we are not yet capable of doing customer profiles. But eventually we will be able to integrate trouble shooting with call management. Hopefully, we will be able to call customers before an outage and be able to provide them with real time information."

Weaver said the company is also re-evaluating hiring practices for call center representatives. "The days of order taking are over and we are trying to add value to every call we take. A shift from reactive to proactive requires a different kind of person. We have to hire people that have a skill set capable of the customer-touch behaviors needed today. We are also focusing on preparing people on being able to sell, if we have the opportunity to. We are learning how, because as a rule utilities don't know how to do it."

Georgia Pacific's Weaver toured the country to learn about best practices in call centers, visiting Coca Cola, Southwest Airlines and Disney to learn about call center improvements.

In North Carolina Duke Power's recently created a telesales department, which serves as a help desk for larger customers. In the meantime, its other call centers serve as traditional centers to handle outages and credit applications for service by handling about 7 million calls annually. The company's telesales group is primarily an in-bound call center with 20 percent out-bound, which is "growing." The call center employs 12 and handles about 80,000 calls annually.

"The main thing is that representatives are available for customers to answer their questions and to have the technical competence to answer their questions," said Millie Chalk, manager, of Duke's Telesales division. In the past the telesales division was a field force that made face-to-face calls. "We brought that in-house and on the telephone because it was more efficient, reduced costs and provided better customer services."

As North Carolina awaits deregulation mandates, Chalk said the utility service is trying to address customer needs sensitively. "Whether it will channel how we acquire customers is an important question," Chalk said. "Regardless, the telephone serves as a delivery channel for reaching customers."

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