Facing Deregulation Head-On: Leveraging Call Centers
For Competitive Advantage
BY JAMES H. DAHMUS, COVERGYS CORPORATION
As deregulation changes the utility market, service providers are facing a multitude of
new challenges. In their regulated markets, they had virtually 100 percent market share, a
percentage that can only go down with the introduction of competition. To make up for
these losses, utilities must find other sources of revenue.
This significant challenge can mean equally large opportunities if utilities and energy
service companies seize them. Utilities must defend their current markets while
simultaneously penetrating new markets and offering new products and services to both.
Companies attempting this are discovering that within both old and new markets, customer
service can be the critical factor for success as consumers choose among competing
In the new battle for servicing customers, a critically important weapon is the call
center. Wielded in the appropriate manner, a utility's call center is a powerful tool that
can be used to retain existing customers while simultaneously reaching out to new ones.
The Evolution Of The Utility Call Center
Within regulated utilities, many call centers today are inbound only, addressing, among
other things, customer questions about services, billing, outages, leaks and customer
problems. Frequently, the representatives addressing these customer issues have limited
information and are not prepared to handle the multitude of new issues that utilities will
face in a deregulated environment. The successful utility call center of the future will
need to be able to:
- Ensure agents can address questions regarding new services, new billing procedures and
- Teach agents to upsell and cross-sell new services,
- Anticipate when calls will spike immediately following a mass mailing, advertisement or
another event that drives people to call,
- Direct agents to make outbound sales calls as back-up and support to the direct sales
- Use database marketing and predictor modeling techniques to segment customers and
- Use technologies such as integrated voice response (IVR) automated systems to answer
frequently asked questions and cost-effectively evaluate levels of service.
Bringing these new services and technologies to market successfully will require
utilities to have at their disposal highly trained, experienced professionals prepared to
address all customer demands. Outbound call centers will become an especially important
tool in pursuing new customers and enhancing communication to existing customers to help
them understand new pricing and service options.
Customers Old And New
In a deregulated environment, utilities must act on opportunities quickly to maintain and
grow market share. A high-quality call center can help in three ways: retaining existing
customers, obtaining new customers and introducing new services to both.
Retaining Existing Customers. Customer loyalty is a looming challenge. As market
competition drives down prices, utility and energy service companies run the risk of
becoming commodities. Branding -- backed by superior customer service -- will be a key
differentiating point for these companies. It is never too early to crank up the level of
service to ensure that existing customers have no reason to consider a new provider when
competitors come calling.
Obtaining New Customers. In addition to meeting the needs of their current
customer base, utilities will need to discover innovative ways to obtain new customers in
a competitive environment. As they move into new markets, utilities will need a
comprehensive strategic plan for acquiring new customers in new markets. This plan should
include a promotional campaign that drives prospects to an inbound call center for more
information and an outbound call center program to reach new prospects.
Introducing New Services. Another hurdle for utilities to overcome will be how
to sell new services. As these companies begin to offer new services -- such as telephony,
cable TV or Internet access -- they will need to announce these new services to both their
existing and new customer bases. Using both inbound and outbound call centers, utilities
can introduce these new services to customers effectively and efficiently.
Call centers delivering superior customer service in these key areas will help utility
companies bridge the gap between the needs of their customers and the services they can
offer as they expand into other territories. The question that remains is, "Can
existing customer service programs support the needs of the deregulated environment?"
For many utilities, the answer is a resounding "no." Current call center
procedures focus mainly on inbound service and are not adequately equipped to handle the
diversity of calls and the level of service needed in a new environment. In addition, not
all call center employees have the experience and expertise to address the specific
customer needs that will emerge as a result of deregulation.
Unfortunately, some utilities overlook the possibility of outsourcing as a solution to
these problems. They often assume that outsourcing will not be cost-effective and that the
service provider will lack the knowledge base that their current call center employees
provide. However, as competition increases, utilities may find that outsourcing their call
centers is their most viable option if they want to remain a contender in the battle for
Reasons For Outsourcing
Essentially, utility companies provide utility services. When reevaluating customer
service in a deregulated environment, utilities must determine how administering call
centers fits into their core competency, if at all.
Today, many utilities and energy service companies are realizing that resources devoted
to internal support of processes like customer service are expensive and difficult to
execute well. Today's customers are demanding and meeting their various needs is a complex
task. In deciding whether or not to outsource their call centers, there are several issues
utilities need to consider:
- Teaming with a service provider can free up resources. This allows the utility to focus
on its strengths and allows the call center provider to help care for customers' diverging
- As utility call centers evolve to provide both inbound and outbound services, staffing
requirements will fluctuate in new ways. Utility companies looking to meet these staffing
challenges will find that outsourcing the call center -- and the staffing fluctuations
that go with it -- can save money and increase efficiency. Because of economies of scale,
the staff size of an outsourced call center can more easily ebb and flow with planned
customer service programs, eliminating the need for utility managers to be concerned with
staffing and training challenges, and
- Having customer service handled by an expert call center provider can go a long way to
help utility companies retain existing customers and secure new ones. An established call
center provider may have already handled similar deregulation experiences with
telecommunications or other industries. Because of this prior knowledge, a call center
provider can guide utilities through what might otherwise be a difficult process.
Deregulation will empower customers and put new demands on utility companies for services,
price and attention. It will give customers the option of choosing a utility company just
as they have done with long-distance telephone services. Utilities that are late in
accommodating the changing market may lose ground to their competition.
Call centers will become an integral tool of communication for utilities. Effective use
of call centers will give utility companies a competitive advantage in the new deregulated
James M. Dahmus is president of the utility business unit for Convergys Information
Management Group. He is responsible for all executive management, strategic planning and
business development for the utilities industry. Convergys Corporation provides integrated
customer care and billing services to help companies transform their customer
relationships into a competitive advantage. Convergys, headquartered in Cincinnati, Ohio,
helps companies leverage customer knowledge to achieve greater customer loyalty, reduce
costs, drive innovation and increase revenue.