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Call/Contact Centres will be the Backbone as the Utility Sector moves into a New Era

I would like to reflect on some of the changes that I have seen over the past few years in the UK and European Utility sector. With deregulation and the introduction of competition in what was a very unshakable foundation has left the market somewhat fragmented and very dependent on the call/contact centre to support its new methodology in dealing with customers.

This transition has not been easy and by no means has the UK utility sector peaked on its interaction with customers. In fact Utilities are still putting people in 'phone limbo' and when it comes to customer service, utilities are not up to scratch. According to a survey of 500 sales, marketing and IT professionals in the UK, Sixty per cent thought utilities

were the worst offenders for bad customer service, and complained about being put on hold for extended periods of time. IVR caused many customers to hang up before ever speaking to live agent. Service with a smile in the utility sector still leaves a lot to be desired.

In the competitive utility market, customers are demanding ever-higher standards of service. Today's customers have high expectations when it comes to service, and utilities have a long way to go before they deliver the kind of service that will placate customers and keep them loyal. Keeping customers loyal is the key. A simple cost calculation makes it clear that it is cheaper to retain customers than to attract new ones. It is more cost effective to

spend time and money on the customers you have already than it is to lose them because of poor service and then try to replace them with new customers. However, published research shows that, on average, every company will lose 50 per cent of its customers over the next five years. Even 'excellent' companies are losing customers at significant rates. In the utility sector, where competition has been introduced comparatively recently, churn rates are not yet as high as elsewhere, but they are significant nonetheless. All organisations need to acquire new customers, even if only to replace those lost through churn. In practice, companies want to acquire more than they lose in order to grow. But customer acquisition is costly. How can utilities minimise these costs?

One thing they can do is differentiating their product by offering better service. The last few years has seen an

increasing recognition that keeping customers satisfied is no longer enough. We now need to embrace our customers or risk losing them. We need to amaze them with the quality of service. For utilities, though, there are other factors. An additional pressure comes from the regulators who are setting ever-increasing standards for customer service. In any front facing business, differentiation is increasingly derived from the human elements of service delivery. For utilities, it is the supply business that has overall responsibility for customer relationship management and impacts heavily on the ability of the call/contact centres ability to fulfil promises. Such supply businesses must recognise that they need to focus on the quality of the service they provide. Against this background, are implementing initiatives with two critical objectives? First, they must invest in improving their relationships with customers.

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Second, they must enhance the excellence of the services they offer.

In order to be effective, investment needs to be in three areas: technology, processes and people. The creative and strategic use of technology as a means of securing competitive advantage can be a key factor in building stronger customer relationships and better service. However, the use of new technology alone will not ensure enhanced relationships or improve service. The harnessing of new technology needs to be combined with programmes to develop people and processes within the enterprise. When all three areas are addressed

together, an organisation dramatically increases the opportunities for transforming its own performance and securing an advantage that competitors cannot match. It is important to get efficient service processes into the organisation. Processes for delivering service excellence are critical for reliable service delivery. Despite being one of the most critical areas, this is also the one that is most frequently neglected. With a significant number of mergers, acquisitions and other restructuring exercises in the utilities, this can be an opportunity to redesign processes for a new type of organisation. The appropriate technology has to be sourced and implemented and in

today's environment, 'great' technology is needed to support the delivery of 'great' service excellence. This is particularly true in call centres, which are the backbone of the utilities infrastructure.

If call centres are effectively implemented, they can provide an excellent level of service to customers. If they are not implemented well, call centres can cause a lot of dissatisfaction and churn among customers. I guess it is up to each organisation how they want to be perceived by their customers and the industry at large. Just remember that a happier customer in turn leads to improved staff motivation - a win-win situation.

Copyright Author:
Amita Krishna
Director of KrisTEL
IT Malaysia
September 2001.