04.22.09James Lovegrove, Utilities Director, SoundBite Communications

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Consumers have become accustomed to choice in how they interact with their product and service providers. With utility and energy service providers, they want to know how utility service impacts their lifestyle, make necessary decisions and adaptations, and then quickly get on with their lives. Oftentimes, the customer's satisfaction with his/her utility is directly tied to his/her interactions and communications with that provider.

Citing utilities that achieved the highest customer satisfaction ratings during 2008, J.D. Power and Associates recently noted:

"Many utility companies realize that proactively communicating with customers -- particularly regarding topics such as power supply availability, energy efficiency and product and service offers -- has a considerable positive impact on overall satisfaction. Satisfaction peaks when customers recall receiving between six to nine communications from their utility company per year."

Consumer Preference Varies

Consumers are mobile and reliant upon mobile communications and data services. Ninety percent of the American public own and use a mobile phone and more than one out of every six American homes (17.5 percent) are mobile-only households.

Complicating matters further, consumer communication preference may vary based on the frequency, content, or method for delivering the message. Some consumers may want to receive account updates monthly by email but prefer to receive outage notifications immediately via text message.

While increasing the frequency of their proactive customer communications, utilities should focus on selecting the right communications channel, or combination of channels, for each message, to each customer. It's not enough to simply send messages. It's necessary to increase the likelihood that the message is received, responded to and remembered. In other words, the message must have relevance to the customer.

One proven technique to maximize message impact involves knowing customers' individual preferences for receiving communications, and then transmitting messages to customers via their preferred channel. For instance, it's well known that younger consumers overwhelmingly prefer (and quickly respond to) text messages. Proactive communications to this customer demographic via text message will likely have much greater impact than direct mail or telemarketing.

Customer Communications and Brand Satisfaction

Even in traditional regulated markets, utilities must establish a brand impression with their customers -- the better and stronger the brand impression, generally the more profitable the relationship for the utility. Customer communications plays a major role in forming that brand impression. Yet, how many utilities really know how each of its customers prefers to be communicated with? And under what circumstances?

For example, if a utility is running an energy efficiency program, would your customers prefer to find out about it via an email? Automated voice message? Text message? Direct mail? Some combination? What if the company wanted to make a special offer to households in a low income community -- how would those customers want to hear about this offer?

Each consumer has his or her own communication preferences. Some want to receive emails, others voice messages, others text messages, and others would prefer to be called on their cell phones. And many would prefer to receive communications through a combination of channels. It is important to ask consumers directly how they want to be communicated with so that you can develop a communication strategy that encompasses their preferences.

A consumer's preference may vary with circumstance or time. Professionally employed consumers may prefer to receive email messages to a business address during normal business hours. That same consumer may (or may not) prefer telemarketing outreach during evenings and weekends. Each individual consumer is unique and demands choice and flexibility in their communications with service providers.

Communications are all about getting consumers to act. And here's the point: If you know in advance what their preferences are, you will be in a much better position to have your communications make an impact and be acted upon.

As a utility determines the individual communication preferences of its consumers, it will be well positioned to deliver relevant information to consumers who have expressed an interest in its programs or services.

Telemarketing and the Competitive Energy Service Provider

Regulated, investor- or municipally-owned utilities are not typically subject to Federal Trade Commission (FTC) rules related to telemarketing. However, competitive energy service providers (ESPs) may need to be aware of, and prepared for, impending changes to FTC telemarketing sales rules.

Beginning September 1, 2009, automated sales communications can be delivered only to those consumers who have provided their "express written consent" to receive them. Having an existing business relationship will no longer suffice as sufficient approval for organizations to attempt to sell a good or service via an automated, prerecorded message.

The FTC telemarketing amendment is a unique opportunity for ESPs because it combines both critical and strategic issues: the urgency of a timed deadline (i.e., they must obtain permission by September 1) and a strategic opportunity that can impact long-term success by enabling more targeted, effective marketing.

The FTC's amended TSR rule is a game changer. ESPs need to act quickly to maximize the percentage of consumers that they will be able to cost-effectively reach via automated calls to sell their competitive energy services.

The Opportunity is Now

Seize this opportunity and create a formal Consumer Communication Preference Program. The value of understanding consumer preferences should create the strategic drive to do so.

Utilities should ask themselves:

• Do you have contact information for your customers?
• Is this contact information complete and updated -- for mobile phones? Emails? Landlines?
• How do you keep contact information updated?
• Do you understand your consumers' communications preferences? (Text messages? Email? Voice messages? Direct mail? Live agents?)
• Do your consumers' communications preferences vary by the situation? (service reminder vs. special program offering vs. pricing/billing)
• How do you track and update your consumers' evolving communications preferences?
• Can your entire organization access your consumers' communications preferences?

Utilities that act swiftly and with purpose in creating a formal Customer Communication Preference Program will have a head start in building a targeted, qualified list of customers who want to hear from you and will welcome your communications. After all, it's all about customer choice, so why not deliver your communications to those who want to receive them, how they want to receive them.

1. J.D. Power and Associates Reports: Central Maine Power, Omaha Public Power District, Portland General Electric and Progress Energy Carolinas Each Rank Highest in Satisfying Electric Utility Business Customers in Their Respective Regions; February 5, 2009;