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Energy industry gets spark from customer programs

Energy providers may not be known for their customer initiatives, but Peppers & Rogers found they're beginning to latch on to some bright ideas.

Energy companies aren't known for their customer friendliness. After all, in a regulated marketplace, residents and businesses only had one choice, and long-term relationships were guaranteed. But deregulation brings customer choice, and utilities are focusing their energy these days on customer strategies that drive retention and value.

There is one challenge: These firms reside in an industry with no tangible product for customers to hold in their hand and the only true bond revolves around a dreaded monthly bill. Nonetheless, some firms are achieving results.

TXU Energy is one such company. The utility serves 2.7 million customers in Texas, which was deregulated last year, and has operations in the U.S. and Australia. The firm's answer to bonding with customers is its Web-based services. At txu.com, customers can sign up for service, pay bills and obtain their billing history. More than 15 % of customers (360,000) did in 2002 -- a small group, but TXU feels its a good start. Once these online services reach critical mass, the organization anticipates ROI from cost savings.

Making the content relevant

To better understand and meet customer needs, and hopefully increase their value, the company created sub-sites for specific customer portfolios, including residential and small business. The sub-sites give customers immediate access to information and services important to them. "We have an aggressive goal for increasing the number of customers who are willing to transact online with us this year and in future years," says Paula Calise, director of ebusiness, TXU Energy Retail.

Customers seem to appreciate this commitment. Registration for its eBill service grew 104% last year and Calise says the company beat its goal of 100,000-person adoption by two and a half years.

Dominion, an energy company based in Richmond, Va., also continues to see strong growth with its eBill product. From January through May of this year, Dominion posted increases of between 10,000 and 15,000 users per month. At the end of May, the total number of enrolled customers neared 150,000 without any major promotional push, according to David Botkins, senior corporate spokesman. He also notes that deregulation is not a competitive factor since only one of Dominion's markets, Virginia, is currently deregulated.

Customer-based initiatives also benefit Swiss utility Romande Energie. While citizens voted down deregulation in September 2002, Romande remains committed to further developing its customer strategy to secure its competitive position when deregulation does take place. The firm uses mySAP technology to obtain customer data within the contact center that can be deployed to create more relevant marketing materials and product development -- a strategy that will help it acquire and maintain more profitable customers.

Romande is implementing SAP's EDM tool to track customers' power consumption and guide them accordingly (SAP competes with Siebel, PeopleSoft and Oracle). The results: Romande Energie jumped ahead of the competition in areas such as price and relevant product and service offerings by 18 months. And by compiling customer data into profiles, the company's contact center can accurately identify the caller a majority of the time.

And Holland-based gas company Eneco's best practices are well known. By controlling factors such as temperature and humidity through remote monitoring, the firm provides its greenhouse clients with customized gas solutions.

Back in the U.S. energy market, we've seen trends in contact-center consolidation across firms with multiple divisions or locations, as well as acquisitions of lawn care, home security and other firms. Such initiatives help energy companies increase their customer share, as well as provide them with a rich, identifiable database from which to cross-sell, up-sell and build learning relationships. The result is a positive bottom-line impact and a loyal customer base in the face of deregulation.


To read more articles like this one, visit Peppers and Rogers Group's Web site at www.1to1.com.

All materials copyright 2003 Peppers and Rogers Group - 1:1 Marketing.

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