The goal of maximizing customer value can only be attained through cultivation of long term customer relationships. Attracting, maintaining and retaining customers have been recognized for long as fundamental to corporate success. With the support of information and communication technologies, organizations are now able to develop stronger and sustainable bonds with their customers. The precondition is that they should be fundamentally convinced that having a strong customer focus is critical to their survival and growth.
Customer relationship management is the process of managing detailed information about individual customers and carefully managing all customer encounters with the company so as to maximize customer satisfaction and loyalty.
You would have often realized that it is difficult to serve customers in a focused and consistent manner unless you have complete information about their requirements, their complaints, the patterns of usage and their billing relationships with the company. Customer relationship management, by enabling the complete information support to you enables your organization to provide high levels of real-time customer service through effective use of individual account information. You must however remember that the basic theme of a CRM strategy is not the acquisition of CRM software or the creation of sophisticated customer databases but creating a more customer centric organization which looks upon customer satisfaction as the key to sustained profitability and growth. In the context of a power utility, the basic elements of CRM include the following:
• setting up processes for regular communication with the customers;
• understanding and tracking customer expectations;
• effective systems for handling customer requirements regarding connections, metering, regular supply;
• effective systems for handling customer requirements regarding billing and collection procedures;
• preventive and corrective maintenance to ensure effective and regular service;
• ensuring responsiveness to consumer needs;
• effective complaint resolution and grievance redressal; and
• enabling the employees with competencies and right attitudes.
Let us briefly understand each of these elements.
Setting up Processes for Regular Communication with the Customers
Regular communication is the basic building block of any customer relationship management system. Unless you make it easy for the customers to get in touch with you with their requirements, complaints and expectations, you may not be able to serve them in a responsive and consistent manner. Modern tools of communication make it easier for utilities to set up systems for maintaining a regular communication with their customers. With regular communication, we are likely to minimize the risk of communication failure, miscommunication, confusion, and misunderstanding the purpose of the message. For a utility it is vital to stay in regular touch with its customers using a combination of various methods that may include the following:
• keeping customers informed of any short or long term possible changes – for a customer, any ‘news’ of change is usually bad news;.
• offering the customers a free newsletter subscription;
• asking customers if they want to be updated by e-mail when changes are made in the company website;• after every new sign up, following up with the customer to see if they are satisfied with the sign up/account activation/service procedures;
• creating a focussed group of ten to twenty most loyal customers to meet regularly and brainstorm on ideas and input on how to improve customer service;
• making it easy for customers to navigate the website; for example, by having a "Frequently Asked Questions” page to pre-empt often repeating questions and saving customers the effort of making a telephonic inquiry;
• having an electronic survey to find out how to make the website more customer-friendly, as well as how to improve customer service;
• making it easy for customers to contact the utility by offering as many contact methods as possible (phone, fax, email, face-to-face);
• conducting face-to-face meeting to disseminate information that would benefit from instant feedback and an opportunity of discussion. Use of visual aids, such as a presentation to illustrate main points allows enforcement of the presented information and encourages discussion,while keeping large gatherings to the point;
• using written messages (direct mailing/public notices/newsletter memorandums) to disseminate information that requires documenting a permanent record, and does not require quick or any feedback, e.g., using visual aids, such as charts, graphs and photographs that can help illustrate key points better and influence the comprehension of complex messages; and
• using Internet and company website to disseminate additional/large amounts of information or data that needs regular updating. The utility has to make sure to keep all information accurate and up to date to promote consumer trust in the reliability of the company, and to encourage customers to look for information on their own initiative.
Understanding and Tracking Customer Expectations
It is important for any utility to know customer expectations and the changes that the expectations undergo over time. Only then can the services offered by it enable it to meet or exceed customer expectations so as to create high levels of customer satisfaction or even customer delight. A good CRM system, by creating opportunities for regular information flow between the customers and the power utility, enables the utility to keep track of what the customer expectations from the utility are and how they are changing.
Effective Systems for Handling Customer Requirements
You must clearly understand that while customers desire regularity of supply and good practices in metering and connections, the responsibility of maintenance of such supplies is perhaps on both sides. You would agree that a large number of customers follow honest practices in terms of electricity consumption and payment for the same. At the same time, utilities across the world have had to confront the problem of meter tricking by the consumers.When such practices become widespread, they result not only in losses for the utility, but also in disruption in regular supply for everyone because the drawing from the system is much more than what is planned or billed as actual supply.
Many utilities across the world lose millions of dollars each year through‘unaccounted for consumption’, termed technical and commercial losses and dismissed as a technical problem that must be lived with. These losses come from illegal connections, manual reading limitations, deliberate theft or meter tampering, leakage and meter inaccuracies. Utilities should focus on providing new connections promptly and evolving strategies for regularising connections.
Automatic Meter Reading (AMR) solves at least some of the problems of power theft by using a two-way fixed network to provide interactive control over the meter installation. This can detect leakage and tamper, check the efficiency of meters, and also overcome the physical problems of reading meters in remote or inaccessible areas. AMR also means utilities can disconnect/reconnect the supply and manage tenancy change without the need for an on-site visit. Benefits of AMR include:
• Immediate warning of any tampering of meter.
• Immediate alarm of any activation of meter in an empty property.
• Regular data to identify non-registering meters.
• Eliminating problems of difficult access.
• Substantially reducing meter-reading costs.
• On demand meter readings.
• Remote connect/disconnect facility.
In order to fully capitalize on AMR technology, utilities are required to replace,upgrade or retrofit existing meters, and for best results upgrade billing systems at the same time. As changes to current systems are being considered, the opportunity exists to look ‘beyond the billing’ and address other meter data requirements. Power quality problems are costly to both the energy supplier and the consumer, and direct equipment damage is only a small portion of theoverall disturbance-related costs. Unplanned outages and abnormal line losses can add significantly to the costs.
Effective Systems for Handling Customer Requirements
Regarding Billing and Collection Procedures From your past experience of both industrial and retail customers, you would have noticed that billing issues top the list of customer complaints to the power companies. One of the major dissatisfactions nurtured by the consumers relates to the anomaly between their perceived consumption and the billing sent by the providers. As described in Sec.
The AMR can possibly take
care of some of these recurrent issues. However, complete transparency of billing processes and the willingness to share information are a prerequisite for building up a foundation of satisfying customer transactions as far as billing is concerned.From the side of the utility, collections have presented typical problems of delayed, deferred or absence of payment, sometimes by the largest customers.
Collection procedures should be tailored to specified customer segments,such as agreed payment structures for those struggling to pay, polite reminders for customers who normally pay on time, but may sometimes forget, email reminders for customers who have chosen email as their preferred communication channel, and stronger warnings and accelerated cycles for delinquent customers who regularly default on outstanding debt. These treatment paths should be differentiated by regulatory jurisdiction, operating company policy, customer type, credit score tier, and customer segment.Improvement in Collections is often listed amongst the top corporate objectives of a utility. In order to combat bad debt, utilities are focusing on new best practice concepts that strike three key dimensions: (i) effectiveness to reduce bad debt; (ii) efficiency to optimize the cost-to-collect; and (iii) yield to improve receivables cash flow. You may like to benefit from the experience of the collection practices followed by the best-in-the business.
BEST PRACTICES IN COLLECTIONS
• Credit scoring based on credit risk, not just historical payment timeliness.
• Offering prepayment products specially for large commercial customers.
• Offering multiple payment options.
• Monitoring business accounts for early signs of credit risk.
• Tailoring collections treatment paths for each customer segment.
•Optimizing collections treatments while maintaining multi-jurisdiction regulatory compliance.
• Utilizing outbound calling.
• Pursuing call centre efficiency.
• Enforcing consistency in deferred payment agreements.
• Optimizing use of field disconnections.
• Taking dynamic collection action, not bound by billing cycles.
• Employing multiple collection agencies.
• Knowing when to factor debt.
• Optimizing cost to collect against debt recoveries.
• Measuring and monitoring collections performance.
• Instituting a continuous improvement regime.
Preventive and Corrective Maintenance to Ensure Effective and Regular Service
The other major source of customer dissatisfaction lies in the disruption of power supply, both scheduled and unscheduled. Of the two, it is the unscheduled power supply disruption that becomes the source of greatest irritant in the customer relationships between power suppliers and theircustomers. It is only through a corporate commitment towards preventive maintenance that disruptions in supply can be minimized to a manageable extent.
Utility personnel perform both preventive maintenance (PM) as well as corrective maintenance (CM). PM is the scheduled inspection or servicing of equipment at specific points in time to retain the functional capabilities of the unit. CM is the unscheduled repair of failed equipment to restore its functional capabilities. Since, in general, corrective maintenance due to partial or complete system breakdown is significantly costlier and time consuming, the goal is to statistically develop a maintenance plan that meets reliability and budget goals.
General objectives of such utility maintenance plans include the following:
− reduced utility and energy costs;
− control of inventory and assets;
− extending the life of equipment;
− increase in productivity;
− improved maintenance responsiveness;
− improved facility appearance;
− reduced facility and personnel liability risks; and
− anticipated scheduled maintenance.
Elements of a utility maintenance plan should, at the minimum, target the following goals:
− assessing and minimizing risks;
− ensuring operational reliability;
− identifying equipment included in the programme;
− ensuring testing, inspection and maintenance of critical components;
− providing utility system plans and layouts to personnel operating the system;
− investigating utility failures and identify necessary corrective action;
− providing training and education to all personnel responsible for operation and maintenance of the systems;
− developing performance standards for personnel, equipment operation, maintenance and repair; and
− developing emergency procedures detailing the initial response to utility failures.
The definition of preventive and predictive maintenance ranges from very simple to fairly complex, depending on the manner in which they are performed and the depths to which they are carried out. In short, preventive
and predictive maintenance are a series of tasks and company policies that, if followed, improve and keep business profits as high as possible. This is achieved by adhering to three general guidelines:
1. Maintaining the utility systems equipment as close to brand new condition as possible and having all equipment ready to start up and run with no unplanned shutdowns;
2. Completing all preventive and predictive maintenance work on a regularly scheduled basis without exceeding the "Point of Diminishing Returns on Investment" for the labour, tools and materials required to perform the work;
3. Viewing the preventive maintenance work as required constant work practices that are just as important to the production process as any other function.
Corrective or Breakdown Maintenance consists of the actions taken to restore a failed system to operational status. Because it involves a broken down system by definition, the cost of corrective maintenance for a utility is substantially higher, and may cause short or even long term black outs,resulting in dissatisfied customers and great financial losses. Corrective maintenance is performed at unpredictable intervals because a component's failure time is not known a priori. The objective of corrective maintenance is to
restore the system to satisfactory operation within the shortest possible time.It is typically carried out in three steps:
• Diagnosis of the problem – locate the failed parts or otherwise satisfactorily assess the cause of the system failure.
• Repair and/or replacement of faulty components.
• Verification of the repair action – verify that the system is again successfully operating.
The technologies available to develop a maintenance programme are abundant at varying price levels. Most utilities seem to mix and match the available technologies to meet individual requirements and needs.
THE BRAZILIAN EXPERIENCE: A CASE STUDY
All players in Brazil’s deregulated electricity market are bound by the rules set by ANEEL, the Brazilian regulatory agency. This agency has introduced harsh penalties for both scheduled and unscheduled outages (up to 150 times the expected revenue or revenue lost for the first five hours of an outage) as an impetus for all utilities to focus their efforts on improving system security by preventing outages and improving the maintenance of their equipment.
The Brazilian utility Furnas Centrais Elétricas SA (Furnas; Rio de Janeiro,Brazil), employed a preventive-maintenance programme, whereby it maintained equipment on a scheduled basis, according to the manufacturer's recommendations and the experience of its engineers, but not based on theactual condition of equipment or a policy of condition-based maintenance (CBM). Furnas, therefore, had to take measures to meet the new rules imposed by ANEEL. The utility examined real-time monitoring of its equipment as a means of reducing both scheduled and unscheduled system outages. As a result, Furnas introduced an Intranet-controlled on-line monitoring system to provide information on the state of equipment within its substations.
Operational Network of Furnas
Furnas operates in the southern half of Brazil, an area that includes the capital, Brazilia, and the major cities of Rio de Janeiro and São Paulo. The utility supplies electrical energy to almost half of the population of Brazil via 12 power-generation stations, 43 substations and a 18,000-km (11,200-mile) transmission system, which used a preventive-maintenance philosophy prior to ANEEL's regulatory changes.Furnas began development studies for a real-time monitoring system in 1999.Initially, the utility planned to install a system that only applied to transformers.Following discussions with several transformer manufacturers in the meeting with ALSTOM, Furnas was introduced to the manufacturer's MS2000 transformer on-line monitoring system.
Following this pre-evaluation of all the available monitoring systems, Furnas prepared a technical specification and awarded ALSTOM a contract to supply the utility's first system. The MS2000 transformer on-line monitoring system not only complied with the Furnas' specifications, but it also offered the opportunity to extend the system monitoring at a later date to include all key electrical equipment in the substation.
Real-Time Monitoring System
A monitoring system collects information from several measurable variables,which are defined by the age and condition of the transformer. Depending on the transformer's operational duty, the range of variable transformer parameters that can be measured includes: top oil temperature, ambient temperature, load current, operational voltage, overvoltages at the bushings, bushing oil pressure, moisture content of the oil, gas-in-oil content, switching status of fans and pumps, tap changer position, and the power consumption of the motor that drives the load tap changer.These variables are all considered to be important as they are linked to the most frequent and common causes of transformer failure. Additional information such as hot-spot temperature, aging rate, lifetime consumption,overload capacity or change of the bushing capacitance can be evaluated from the sensors. The system also provides a diagnosis and prognosis of incipient failures for maintenance programming. The outputs from these sensors are collected in the monitoring module installed on the transformer. The signals are then digitized and sent via a field bus to the monitoring server. The system monitors all the transformers installed in a substation via a single server. Fiber-optic and field bus technologies are two examples of the communications systems that can be used to reduce the wiring and installation costs associated with conventional
technology. While researching transformer-monitoring systems, Furnas purchased and installed monitoring systems on the most important transformers located in strategically positioned transmission substations. It then prepared on-line monitoring system specifications for breakers and switches.
Customer relationship management is the process of managing detailed information about individual customers and carefully managing all customer encounters with the company so as to maximize customer satisfaction and loyalty.
You would have often realized that it is difficult to serve customers in a focused and consistent manner unless you have complete information about their requirements, their complaints, the patterns of usage and their billing relationships with the company. Customer relationship management, by enabling the complete information support to you enables your organization to provide high levels of real-time customer service through effective use of individual account information. You must however remember that the basic theme of a CRM strategy is not the acquisition of CRM software or the creation of sophisticated customer databases but creating a more customer centric organization which looks upon customer satisfaction as the key to sustained profitability and growth. In the context of a power utility, the basic elements of CRM include the following:
• setting up processes for regular communication with the customers;
• understanding and tracking customer expectations;
• effective systems for handling customer requirements regarding connections, metering, regular supply;
• effective systems for handling customer requirements regarding billing and collection procedures;
• preventive and corrective maintenance to ensure effective and regular service;
• ensuring responsiveness to consumer needs;
• effective complaint resolution and grievance redressal; and
• enabling the employees with competencies and right attitudes.
Let us briefly understand each of these elements.
Setting up Processes for Regular Communication with the Customers
Regular communication is the basic building block of any customer relationship management system. Unless you make it easy for the customers to get in touch with you with their requirements, complaints and expectations, you may not be able to serve them in a responsive and consistent manner. Modern tools of communication make it easier for utilities to set up systems for maintaining a regular communication with their customers. With regular communication, we are likely to minimize the risk of communication failure, miscommunication, confusion, and misunderstanding the purpose of the message. For a utility it is vital to stay in regular touch with its customers using a combination of various methods that may include the following:
• keeping customers informed of any short or long term possible changes – for a customer, any ‘news’ of change is usually bad news;.
• offering the customers a free newsletter subscription;
• asking customers if they want to be updated by e-mail when changes are made in the company website;• after every new sign up, following up with the customer to see if they are satisfied with the sign up/account activation/service procedures;
• creating a focussed group of ten to twenty most loyal customers to meet regularly and brainstorm on ideas and input on how to improve customer service;
• making it easy for customers to navigate the website; for example, by having a "Frequently Asked Questions” page to pre-empt often repeating questions and saving customers the effort of making a telephonic inquiry;
• having an electronic survey to find out how to make the website more customer-friendly, as well as how to improve customer service;
• making it easy for customers to contact the utility by offering as many contact methods as possible (phone, fax, email, face-to-face);
• conducting face-to-face meeting to disseminate information that would benefit from instant feedback and an opportunity of discussion. Use of visual aids, such as a presentation to illustrate main points allows enforcement of the presented information and encourages discussion,while keeping large gatherings to the point;
• using written messages (direct mailing/public notices/newsletter memorandums) to disseminate information that requires documenting a permanent record, and does not require quick or any feedback, e.g., using visual aids, such as charts, graphs and photographs that can help illustrate key points better and influence the comprehension of complex messages; and
• using Internet and company website to disseminate additional/large amounts of information or data that needs regular updating. The utility has to make sure to keep all information accurate and up to date to promote consumer trust in the reliability of the company, and to encourage customers to look for information on their own initiative.
Understanding and Tracking Customer Expectations
It is important for any utility to know customer expectations and the changes that the expectations undergo over time. Only then can the services offered by it enable it to meet or exceed customer expectations so as to create high levels of customer satisfaction or even customer delight. A good CRM system, by creating opportunities for regular information flow between the customers and the power utility, enables the utility to keep track of what the customer expectations from the utility are and how they are changing.
Effective Systems for Handling Customer Requirements
You must clearly understand that while customers desire regularity of supply and good practices in metering and connections, the responsibility of maintenance of such supplies is perhaps on both sides. You would agree that a large number of customers follow honest practices in terms of electricity consumption and payment for the same. At the same time, utilities across the world have had to confront the problem of meter tricking by the consumers.When such practices become widespread, they result not only in losses for the utility, but also in disruption in regular supply for everyone because the drawing from the system is much more than what is planned or billed as actual supply.
Many utilities across the world lose millions of dollars each year through‘unaccounted for consumption’, termed technical and commercial losses and dismissed as a technical problem that must be lived with. These losses come from illegal connections, manual reading limitations, deliberate theft or meter tampering, leakage and meter inaccuracies. Utilities should focus on providing new connections promptly and evolving strategies for regularising connections.
Automatic Meter Reading (AMR) solves at least some of the problems of power theft by using a two-way fixed network to provide interactive control over the meter installation. This can detect leakage and tamper, check the efficiency of meters, and also overcome the physical problems of reading meters in remote or inaccessible areas. AMR also means utilities can disconnect/reconnect the supply and manage tenancy change without the need for an on-site visit. Benefits of AMR include:
• Immediate warning of any tampering of meter.
• Immediate alarm of any activation of meter in an empty property.
• Regular data to identify non-registering meters.
• Eliminating problems of difficult access.
• Substantially reducing meter-reading costs.
• On demand meter readings.
• Remote connect/disconnect facility.
In order to fully capitalize on AMR technology, utilities are required to replace,upgrade or retrofit existing meters, and for best results upgrade billing systems at the same time. As changes to current systems are being considered, the opportunity exists to look ‘beyond the billing’ and address other meter data requirements. Power quality problems are costly to both the energy supplier and the consumer, and direct equipment damage is only a small portion of theoverall disturbance-related costs. Unplanned outages and abnormal line losses can add significantly to the costs.
Effective Systems for Handling Customer Requirements
Regarding Billing and Collection Procedures From your past experience of both industrial and retail customers, you would have noticed that billing issues top the list of customer complaints to the power companies. One of the major dissatisfactions nurtured by the consumers relates to the anomaly between their perceived consumption and the billing sent by the providers. As described in Sec.
The AMR can possibly take
care of some of these recurrent issues. However, complete transparency of billing processes and the willingness to share information are a prerequisite for building up a foundation of satisfying customer transactions as far as billing is concerned.From the side of the utility, collections have presented typical problems of delayed, deferred or absence of payment, sometimes by the largest customers.
Collection procedures should be tailored to specified customer segments,such as agreed payment structures for those struggling to pay, polite reminders for customers who normally pay on time, but may sometimes forget, email reminders for customers who have chosen email as their preferred communication channel, and stronger warnings and accelerated cycles for delinquent customers who regularly default on outstanding debt. These treatment paths should be differentiated by regulatory jurisdiction, operating company policy, customer type, credit score tier, and customer segment.Improvement in Collections is often listed amongst the top corporate objectives of a utility. In order to combat bad debt, utilities are focusing on new best practice concepts that strike three key dimensions: (i) effectiveness to reduce bad debt; (ii) efficiency to optimize the cost-to-collect; and (iii) yield to improve receivables cash flow. You may like to benefit from the experience of the collection practices followed by the best-in-the business.
BEST PRACTICES IN COLLECTIONS
• Credit scoring based on credit risk, not just historical payment timeliness.
• Offering prepayment products specially for large commercial customers.
• Offering multiple payment options.
• Monitoring business accounts for early signs of credit risk.
• Tailoring collections treatment paths for each customer segment.
•Optimizing collections treatments while maintaining multi-jurisdiction regulatory compliance.
• Utilizing outbound calling.
• Pursuing call centre efficiency.
• Enforcing consistency in deferred payment agreements.
• Optimizing use of field disconnections.
• Taking dynamic collection action, not bound by billing cycles.
• Employing multiple collection agencies.
• Knowing when to factor debt.
• Optimizing cost to collect against debt recoveries.
• Measuring and monitoring collections performance.
• Instituting a continuous improvement regime.
Preventive and Corrective Maintenance to Ensure Effective and Regular Service
The other major source of customer dissatisfaction lies in the disruption of power supply, both scheduled and unscheduled. Of the two, it is the unscheduled power supply disruption that becomes the source of greatest irritant in the customer relationships between power suppliers and theircustomers. It is only through a corporate commitment towards preventive maintenance that disruptions in supply can be minimized to a manageable extent.
Utility personnel perform both preventive maintenance (PM) as well as corrective maintenance (CM). PM is the scheduled inspection or servicing of equipment at specific points in time to retain the functional capabilities of the unit. CM is the unscheduled repair of failed equipment to restore its functional capabilities. Since, in general, corrective maintenance due to partial or complete system breakdown is significantly costlier and time consuming, the goal is to statistically develop a maintenance plan that meets reliability and budget goals.
General objectives of such utility maintenance plans include the following:
− reduced utility and energy costs;
− control of inventory and assets;
− extending the life of equipment;
− increase in productivity;
− improved maintenance responsiveness;
− improved facility appearance;
− reduced facility and personnel liability risks; and
− anticipated scheduled maintenance.
Elements of a utility maintenance plan should, at the minimum, target the following goals:
− assessing and minimizing risks;
− ensuring operational reliability;
− identifying equipment included in the programme;
− ensuring testing, inspection and maintenance of critical components;
− providing utility system plans and layouts to personnel operating the system;
− investigating utility failures and identify necessary corrective action;
− providing training and education to all personnel responsible for operation and maintenance of the systems;
− developing performance standards for personnel, equipment operation, maintenance and repair; and
− developing emergency procedures detailing the initial response to utility failures.
The definition of preventive and predictive maintenance ranges from very simple to fairly complex, depending on the manner in which they are performed and the depths to which they are carried out. In short, preventive
and predictive maintenance are a series of tasks and company policies that, if followed, improve and keep business profits as high as possible. This is achieved by adhering to three general guidelines:
1. Maintaining the utility systems equipment as close to brand new condition as possible and having all equipment ready to start up and run with no unplanned shutdowns;
2. Completing all preventive and predictive maintenance work on a regularly scheduled basis without exceeding the "Point of Diminishing Returns on Investment" for the labour, tools and materials required to perform the work;
3. Viewing the preventive maintenance work as required constant work practices that are just as important to the production process as any other function.
Corrective or Breakdown Maintenance consists of the actions taken to restore a failed system to operational status. Because it involves a broken down system by definition, the cost of corrective maintenance for a utility is substantially higher, and may cause short or even long term black outs,resulting in dissatisfied customers and great financial losses. Corrective maintenance is performed at unpredictable intervals because a component's failure time is not known a priori. The objective of corrective maintenance is to
restore the system to satisfactory operation within the shortest possible time.It is typically carried out in three steps:
• Diagnosis of the problem – locate the failed parts or otherwise satisfactorily assess the cause of the system failure.
• Repair and/or replacement of faulty components.
• Verification of the repair action – verify that the system is again successfully operating.
The technologies available to develop a maintenance programme are abundant at varying price levels. Most utilities seem to mix and match the available technologies to meet individual requirements and needs.
THE BRAZILIAN EXPERIENCE: A CASE STUDY
All players in Brazil’s deregulated electricity market are bound by the rules set by ANEEL, the Brazilian regulatory agency. This agency has introduced harsh penalties for both scheduled and unscheduled outages (up to 150 times the expected revenue or revenue lost for the first five hours of an outage) as an impetus for all utilities to focus their efforts on improving system security by preventing outages and improving the maintenance of their equipment.
The Brazilian utility Furnas Centrais Elétricas SA (Furnas; Rio de Janeiro,Brazil), employed a preventive-maintenance programme, whereby it maintained equipment on a scheduled basis, according to the manufacturer's recommendations and the experience of its engineers, but not based on theactual condition of equipment or a policy of condition-based maintenance (CBM). Furnas, therefore, had to take measures to meet the new rules imposed by ANEEL. The utility examined real-time monitoring of its equipment as a means of reducing both scheduled and unscheduled system outages. As a result, Furnas introduced an Intranet-controlled on-line monitoring system to provide information on the state of equipment within its substations.
Operational Network of Furnas
Furnas operates in the southern half of Brazil, an area that includes the capital, Brazilia, and the major cities of Rio de Janeiro and São Paulo. The utility supplies electrical energy to almost half of the population of Brazil via 12 power-generation stations, 43 substations and a 18,000-km (11,200-mile) transmission system, which used a preventive-maintenance philosophy prior to ANEEL's regulatory changes.Furnas began development studies for a real-time monitoring system in 1999.Initially, the utility planned to install a system that only applied to transformers.Following discussions with several transformer manufacturers in the meeting with ALSTOM, Furnas was introduced to the manufacturer's MS2000 transformer on-line monitoring system.
Following this pre-evaluation of all the available monitoring systems, Furnas prepared a technical specification and awarded ALSTOM a contract to supply the utility's first system. The MS2000 transformer on-line monitoring system not only complied with the Furnas' specifications, but it also offered the opportunity to extend the system monitoring at a later date to include all key electrical equipment in the substation.
Real-Time Monitoring System
A monitoring system collects information from several measurable variables,which are defined by the age and condition of the transformer. Depending on the transformer's operational duty, the range of variable transformer parameters that can be measured includes: top oil temperature, ambient temperature, load current, operational voltage, overvoltages at the bushings, bushing oil pressure, moisture content of the oil, gas-in-oil content, switching status of fans and pumps, tap changer position, and the power consumption of the motor that drives the load tap changer.These variables are all considered to be important as they are linked to the most frequent and common causes of transformer failure. Additional information such as hot-spot temperature, aging rate, lifetime consumption,overload capacity or change of the bushing capacitance can be evaluated from the sensors. The system also provides a diagnosis and prognosis of incipient failures for maintenance programming. The outputs from these sensors are collected in the monitoring module installed on the transformer. The signals are then digitized and sent via a field bus to the monitoring server. The system monitors all the transformers installed in a substation via a single server. Fiber-optic and field bus technologies are two examples of the communications systems that can be used to reduce the wiring and installation costs associated with conventional
technology. While researching transformer-monitoring systems, Furnas purchased and installed monitoring systems on the most important transformers located in strategically positioned transmission substations. It then prepared on-line monitoring system specifications for breakers and switches.
Advantages and Cost Benefits
The advantage of a monitoring system is its inherent ability to give an accurate picture of the operating condition of the transformer, allowing the operator to detect the early signs of faults and correct them. It also provides the tools, in the form of data to plan maintenance on the basis of the actual condition of the transformer and avoid unnecessary maintenance work. The information givesoperators the ability to estimate with great accuracy the remaining lifetime of a transformer and defer investment in new equipment. Cost savings achieved by avoiding system transformer failures and downtimes are critical for Furnas.
Based on the available failure statistics of large power transformers and the experience of more than 120 installations of MS2000 systems, ALSTOM estimates the reduced cost of major failure to yield an average saving equivalent to 5% of the capital cost of a transformer over 10 years. This calculation does not take into account the cost of repairing any collateral damage caused by a transformer failure to other equipment in the substation.Preventing unplanned outages caused by transformer failure is the most important financial benefit, as it helps to guarantee Furnas' contractual obligations with ANEEL.
Furnas' strategy of implementing such technology is a significant milestone in the development of new maintenance techniques that it believes will signal a change in maintenance policy with other utilities. In the long term, the utility plans to increase the benefits further by continuing the installation of this real- time monitoring system in the utility's most important and strategic transmission substations.
Let us illustrate the application of breakdown maintenance system through a case study of power disruptions in the New York City.NEW YORK CITY AND CHICAGO BLACKOUTS OF 1999: A CASE STUDY In the summer of 1999, the United States was struck by a series of major utility outages as aging T&D systems proved vulnerable to the twin challenges of extreme heat and extreme demand. New York City, New York, was hit by its worst blackout in more than 20 years. And in Chicago, Illinois, a month of recurring outages crippled vital parts of a sweltering city.In 1999, the first major blackout of Chicago's late summer heat wave began beneath the manholes located along California Ave. In the early morning hours of Friday, July 30, the 12-kV line feeding Cortland Substation short circuited. Within hours, a series of falling T&D dominos had two major substations down, with the power gone and the airconditioning out in nearly 100,000 homes.
The Findings
The findings were sobering. Substation and feeder capacity planning and capacity additions had not kept up with the heavy load growth spurred by Chicago's booming economy. The problem was not a lack of power; the problem was that the distribution system could not reliably deliver the power at peak times. To make a bad situation worse, through the years the company had neglected routine maintenance in favour of other projects. All in all,Chicago faced overloaded feeders and substations, inadequate capacity and redundancy, and poorly maintained equipment, exacerbated by weak planning. The system was cracking under the pressure.
The Recovery Plan
A 450-page recovery plan presented in September 1999 set detailed criteria for a staggering array of tasks, projects and process improvements pledged to be completed before the summer of 2000. Physical improvement plans included more than 330 distribution feeder installations and upgrades, 27 large substation transformer upgrades or expansion projects, transmission line inspections and repairs, and the start of an extremely aggressive multi-year improvement programme for key Chicago substations. It also called for new discipline and accountability, especially for T&D maintenance.
The Recovery, Summer of 2000
It was recognized that not everything would or could be completed by the summer of 2000. Plans had to be implemented that went beyond immediate equipment upgrades and maintenance programmes. To ensure that additional stress was not put on areas where improvements could not be accomplished for summer 2000, planning engineers joined efforts with the sales force to procure curtailable load.Surpassing its goal of more than 1200 MW, this targeted load-curtailment effort saved the immediate need for some upgrade projects. Additional monitoring was installed to identify potential degradation in order to protect transformers that were not part of the 2000 improvement plan. The improved monitoring paid dividends. During 2000, newly installed transformer-monitoring systems sent alarms that triggered immediate and proactive inspections. The resulting maintenance was credited with saving imminent failure on no less than five occasions.
The Success
The workforce made a critical difference, with employees working an average of more than 60 hours a week, thus completing most of the distribution system and substation maintenance projects, along with smaller upgrades.They were joined by more than 2100 contractors in a sustained partnership to complete the balance of the work, which included installing conduit, pulling cable, performing distribution feeder upgrades, completing substation projects,trimming trees, performing new business hook-ups, finishing overhead transmission maintenance repairs, and foundation and concrete work.Of major concern was the growth of Chicago and the company's ability to support the energy needs of the city.
An entire 12-kV substation was rebuilt over the top of the old one, two 75-MVA transformers were added and other upgrades were completed. An entirely new substation was erected on an urban site that had been commercial-use land as late as November 1999. Experts predicted construction would take two years to build the 138-/12-kV substation that would house four 50-MVA transformers. It was built and commissioned in about eight months, an almost unbelievable accomplishment of man, machine and management.The improvements on the remaining substations included retiring the switchgear, conversion of feeders to 12 kV for better switching flexibility, making room for future substation work. A new substation (Grand) was built to help load growth. Circuit breakers were refurbished and rebuilt at the substation that caused the severe 1999 outage in Chicago.While the fast-track nature of these projects is not the recommended course of action, the alliance team was able to deliver without significant outages or serious safety incidents. There were of course some trade-offs. The distribution system was at a greater risk because key elements were taken out of service for project cut-overs. Some customers experienced outages because of cable dig-ins, and cable failures caused more widely spread outages because many circuits were switched abnormally for construction purposes.
The advantage of a monitoring system is its inherent ability to give an accurate picture of the operating condition of the transformer, allowing the operator to detect the early signs of faults and correct them. It also provides the tools, in the form of data to plan maintenance on the basis of the actual condition of the transformer and avoid unnecessary maintenance work. The information givesoperators the ability to estimate with great accuracy the remaining lifetime of a transformer and defer investment in new equipment. Cost savings achieved by avoiding system transformer failures and downtimes are critical for Furnas.
Based on the available failure statistics of large power transformers and the experience of more than 120 installations of MS2000 systems, ALSTOM estimates the reduced cost of major failure to yield an average saving equivalent to 5% of the capital cost of a transformer over 10 years. This calculation does not take into account the cost of repairing any collateral damage caused by a transformer failure to other equipment in the substation.Preventing unplanned outages caused by transformer failure is the most important financial benefit, as it helps to guarantee Furnas' contractual obligations with ANEEL.
Furnas' strategy of implementing such technology is a significant milestone in the development of new maintenance techniques that it believes will signal a change in maintenance policy with other utilities. In the long term, the utility plans to increase the benefits further by continuing the installation of this real- time monitoring system in the utility's most important and strategic transmission substations.
Let us illustrate the application of breakdown maintenance system through a case study of power disruptions in the New York City.NEW YORK CITY AND CHICAGO BLACKOUTS OF 1999: A CASE STUDY In the summer of 1999, the United States was struck by a series of major utility outages as aging T&D systems proved vulnerable to the twin challenges of extreme heat and extreme demand. New York City, New York, was hit by its worst blackout in more than 20 years. And in Chicago, Illinois, a month of recurring outages crippled vital parts of a sweltering city.In 1999, the first major blackout of Chicago's late summer heat wave began beneath the manholes located along California Ave. In the early morning hours of Friday, July 30, the 12-kV line feeding Cortland Substation short circuited. Within hours, a series of falling T&D dominos had two major substations down, with the power gone and the airconditioning out in nearly 100,000 homes.
The Findings
The findings were sobering. Substation and feeder capacity planning and capacity additions had not kept up with the heavy load growth spurred by Chicago's booming economy. The problem was not a lack of power; the problem was that the distribution system could not reliably deliver the power at peak times. To make a bad situation worse, through the years the company had neglected routine maintenance in favour of other projects. All in all,Chicago faced overloaded feeders and substations, inadequate capacity and redundancy, and poorly maintained equipment, exacerbated by weak planning. The system was cracking under the pressure.
The Recovery Plan
A 450-page recovery plan presented in September 1999 set detailed criteria for a staggering array of tasks, projects and process improvements pledged to be completed before the summer of 2000. Physical improvement plans included more than 330 distribution feeder installations and upgrades, 27 large substation transformer upgrades or expansion projects, transmission line inspections and repairs, and the start of an extremely aggressive multi-year improvement programme for key Chicago substations. It also called for new discipline and accountability, especially for T&D maintenance.
The Recovery, Summer of 2000
It was recognized that not everything would or could be completed by the summer of 2000. Plans had to be implemented that went beyond immediate equipment upgrades and maintenance programmes. To ensure that additional stress was not put on areas where improvements could not be accomplished for summer 2000, planning engineers joined efforts with the sales force to procure curtailable load.Surpassing its goal of more than 1200 MW, this targeted load-curtailment effort saved the immediate need for some upgrade projects. Additional monitoring was installed to identify potential degradation in order to protect transformers that were not part of the 2000 improvement plan. The improved monitoring paid dividends. During 2000, newly installed transformer-monitoring systems sent alarms that triggered immediate and proactive inspections. The resulting maintenance was credited with saving imminent failure on no less than five occasions.
The Success
The workforce made a critical difference, with employees working an average of more than 60 hours a week, thus completing most of the distribution system and substation maintenance projects, along with smaller upgrades.They were joined by more than 2100 contractors in a sustained partnership to complete the balance of the work, which included installing conduit, pulling cable, performing distribution feeder upgrades, completing substation projects,trimming trees, performing new business hook-ups, finishing overhead transmission maintenance repairs, and foundation and concrete work.Of major concern was the growth of Chicago and the company's ability to support the energy needs of the city.
An entire 12-kV substation was rebuilt over the top of the old one, two 75-MVA transformers were added and other upgrades were completed. An entirely new substation was erected on an urban site that had been commercial-use land as late as November 1999. Experts predicted construction would take two years to build the 138-/12-kV substation that would house four 50-MVA transformers. It was built and commissioned in about eight months, an almost unbelievable accomplishment of man, machine and management.The improvements on the remaining substations included retiring the switchgear, conversion of feeders to 12 kV for better switching flexibility, making room for future substation work. A new substation (Grand) was built to help load growth. Circuit breakers were refurbished and rebuilt at the substation that caused the severe 1999 outage in Chicago.While the fast-track nature of these projects is not the recommended course of action, the alliance team was able to deliver without significant outages or serious safety incidents. There were of course some trade-offs. The distribution system was at a greater risk because key elements were taken out of service for project cut-overs. Some customers experienced outages because of cable dig-ins, and cable failures caused more widely spread outages because many circuits were switched abnormally for construction purposes.
Critically analyze the maintenance systems in use in your organization.Describe the gaps if any in the preventive maintenance systems followed by the organization. What in your view is the impact of the maintenance processes on the level of customer service that you are able to provide?
Ensuring Call Centre Responsiveness
Taking advantage of the ICT revolution, most companies, including utilities, have established call centres to ensure round the clock customer interactivity and quick redressal of consumer complaints. It is however important to imbue a spirit of complete commitment to customers and a keen sense of customer orientation among the call centre operators, to enable the benefits of such relationship management really accrue to the company. The call centre is often the largest component of utility cost-to-serve. The customer service function of call centres is to address customer complaints and inquiries concerning the utility, as well as provide the public with customer information and education on the utility related issues.
Call centres aim to enhance the communication between the customer and the utility for the benefit of both. Call centre customer service is responsible for maintaining the utility accounts including monthly billing, processing all payments, setting up new accounts, changing services from customer to customer, and assisting customers with numerous questions and issues.They also provide information regarding new construction and/or new connection to the utility systems, including applicable rules, regulations, and fees. The effectiveness of a call centre can be greatly increased by anticipating the customer’s problems and questions. Main customer service concerns to be handled by a call centre representative include the following:
− problems with service;
− meter reading, bill collection system and illegal connections;
− lack of information about the utility services or institutional setup;
− public awareness, involvement and participation;
− problems with bills, which might be inaccurate and difficult to read;
− service problems, which may result in high bills; and
− customer assistance for meeting payment obligations.
Call centres can make significant improvements in efficiency by utilizing modern technologies and computer applications. You will study about this aspect in detail in Block 4 of the course BEE-002. To help you appreciate some of the issues in call centre responsiveness, we will use the following case study of an old American Gas company.
Baltimore Gas and Electric (BGE), more than 180 years in existence, is the nation's first gas utility and one of the earliest electric utilities in the USA. The company serves more than one million business and residential electric customers and 600,000 gas customers. Under a new corporate mandate,BGE was led to take a critical look at its entire customer service operations and reinforce these vital processes to ensure continued success.
CIS Environment
Based on outdated technical underpinnings, BGE's existing customer information system (CIS) had become a bottleneck to efficient customer service. Training time for new call centre recruits took 29 weeks because the system was difficult to learn and time-consuming to use. Customer inquiries became more complex and the time it took to access pertinent information to get answers increased. BGE needed a solution that spanned three critical areas: cut training time, decrease actual call time and improve overall processes.
To obtain a complete picture of what was needed to answer customer inquiries as efficiently as possible, BGE conducted joint application development sessions that included call centre team members, supervisors and trainers. They walked through the customer service processes needed to support every possible call scenario and observed the steps reps took to answer each call. BGE found that 75 percent of the time, call centre reps had to access nine to 12 screens of information to get all the data needed to answer one customer's inquiry. Not only that, each screen was accessed sequentially, that is, it would be called up, the rep would copy some notes,close that screen and open another, copy down another piece of information, close that screen, etc. BGE realized they needed a more efficient method to access mainframe information.
BGE responded by developing GUIdance, a new application that would serve as an intuitive, easy-to-use interface between their legacy CIS and their customer representatives. GUIdance was built to provide the information call centre reps need as efficiently and easily as possible, so they can respond to customers' requests and inquiries more quickly. To make GUIdance a reality,BGE needed a product that could leverage the investment made in their CIS,i.e., reuse the business rules they already had on mainframe, provide high data acquisition rates, be able to support new applications and get up and running quickly. Mitem View was the only product that met all of these requirements.
Results
GUIdance cut training time from 29 weeks to less than 10 weeks;
new reps become productive sooner;
average call handle time has been cut by 7 seconds; and
annual savings in customer service operations are more than $1 million.
GUIdance Screen Shot
Ensuring Call Centre Responsiveness
Taking advantage of the ICT revolution, most companies, including utilities, have established call centres to ensure round the clock customer interactivity and quick redressal of consumer complaints. It is however important to imbue a spirit of complete commitment to customers and a keen sense of customer orientation among the call centre operators, to enable the benefits of such relationship management really accrue to the company. The call centre is often the largest component of utility cost-to-serve. The customer service function of call centres is to address customer complaints and inquiries concerning the utility, as well as provide the public with customer information and education on the utility related issues.
Call centres aim to enhance the communication between the customer and the utility for the benefit of both. Call centre customer service is responsible for maintaining the utility accounts including monthly billing, processing all payments, setting up new accounts, changing services from customer to customer, and assisting customers with numerous questions and issues.They also provide information regarding new construction and/or new connection to the utility systems, including applicable rules, regulations, and fees. The effectiveness of a call centre can be greatly increased by anticipating the customer’s problems and questions. Main customer service concerns to be handled by a call centre representative include the following:
− problems with service;
− meter reading, bill collection system and illegal connections;
− lack of information about the utility services or institutional setup;
− public awareness, involvement and participation;
− problems with bills, which might be inaccurate and difficult to read;
− service problems, which may result in high bills; and
− customer assistance for meeting payment obligations.
Call centres can make significant improvements in efficiency by utilizing modern technologies and computer applications. You will study about this aspect in detail in Block 4 of the course BEE-002. To help you appreciate some of the issues in call centre responsiveness, we will use the following case study of an old American Gas company.
Baltimore Gas and Electric (BGE), more than 180 years in existence, is the nation's first gas utility and one of the earliest electric utilities in the USA. The company serves more than one million business and residential electric customers and 600,000 gas customers. Under a new corporate mandate,BGE was led to take a critical look at its entire customer service operations and reinforce these vital processes to ensure continued success.
CIS Environment
Based on outdated technical underpinnings, BGE's existing customer information system (CIS) had become a bottleneck to efficient customer service. Training time for new call centre recruits took 29 weeks because the system was difficult to learn and time-consuming to use. Customer inquiries became more complex and the time it took to access pertinent information to get answers increased. BGE needed a solution that spanned three critical areas: cut training time, decrease actual call time and improve overall processes.
To obtain a complete picture of what was needed to answer customer inquiries as efficiently as possible, BGE conducted joint application development sessions that included call centre team members, supervisors and trainers. They walked through the customer service processes needed to support every possible call scenario and observed the steps reps took to answer each call. BGE found that 75 percent of the time, call centre reps had to access nine to 12 screens of information to get all the data needed to answer one customer's inquiry. Not only that, each screen was accessed sequentially, that is, it would be called up, the rep would copy some notes,close that screen and open another, copy down another piece of information, close that screen, etc. BGE realized they needed a more efficient method to access mainframe information.
BGE responded by developing GUIdance, a new application that would serve as an intuitive, easy-to-use interface between their legacy CIS and their customer representatives. GUIdance was built to provide the information call centre reps need as efficiently and easily as possible, so they can respond to customers' requests and inquiries more quickly. To make GUIdance a reality,BGE needed a product that could leverage the investment made in their CIS,i.e., reuse the business rules they already had on mainframe, provide high data acquisition rates, be able to support new applications and get up and running quickly. Mitem View was the only product that met all of these requirements.
Results
GUIdance cut training time from 29 weeks to less than 10 weeks;
new reps become productive sooner;
average call handle time has been cut by 7 seconds; and
annual savings in customer service operations are more than $1 million.
GUIdance Screen Shot
 |
| GUIdance Screen Shot |
In September of 2004, BGE launched a self-service web application specifically designed for agency workers administering programmes for the Office of Home Energy Programmes (OHEP). The web application resides on a MitemView server and provides agency workers with real time, direct access to a client's account information and the ability to commit funds. OHEP helps low-income Maryland citizens pay their heating bills, minimize heating crises, and make energy costs more affordable. The new self-service application will be used by approximately 170 agency workers. This deployment will be used as a study for providing other self-service applications for BGE customers.
Effective Complaint Resolution and Grievance Redressal
Complaints are often looked upon by service providers as irritating reminders of their own failures or inadequacies or as messages from over demanding customers who refuse to be satisfied. They are also seen as being disruptive of ongoing processes, making it necessary for somebody to take time off and handle the complaint. These attitudes towards complaints often affect our handling and redressal of complaints.In a customer driven company, complaints are seen as opportunities to improve corporate performance and a second chance to satisfy an unhappy customer. Customer complaints can provide valuable insight into what th consumer is looking for and what areas in the company need improvement, as
they:
− provide customer feedback and facilitate implementation of improvement plans;
− form a vital means of measuring performance and allocating resources to tackle the deficient areas in a business;
− prevent complacency and help in harnessing internal competencies to optimize products and services;
− help gauge internal performances against competition; and
− enable an organization to understand customers better and improve relationships.
Although often not followed, it is a widely acknowledged business belief that customer should not be transferred to more than two people for resolution of complaints. In cases where such a transfer is unavoidable, the first person of contact must determine the right person to resolve the matter. If the complaints satisfaction at the first or the second contact, is not resolved to the customer'further steps in the process must be explained and relevant documentation posted out to the client. Studies reveal that four questions help organizations to determine if they are getting the most out of their complaint processes.
They should verify if their complaint management processes:
• satisfy customers who have experienced a failure?
• retain the above-mentioned customers?
• improve organization-wide processes as a result of feedback from complaints? and
• help retain employees?
Certain practices of complaint-friendly organizations have been identified as best practices based on summary reviews of marketing research and wide ranging discussions with organizations working to become excellent at complaint handling. We present them below:
1. Not setting targets to reduce the number of complaints: Tempting as the "zero defects" concept makes this, complaint-friendly organizations understand that setting goals to reduce complaints mainly encourages staff to cover up bad news from customers. This creates a mindset among staff that customer complaints are negative and senior management
doesn't want to hear about them.
2. Making it easy for your customers to complain: Your customers will make it easy for you to improve. Informed customers know how your
services should work. If things are not working, customers are the first to know. Customers who are dissatisfied tell other customers including those who are happy with your service. The best-in-business use feedback from phone calls, letters, and surveys to identify and resolve root causes of dissatisfaction and to change their services to ensure that the customer will be quickly satisfied.
3. Creating a receptive managerial attitude to hear feedback passed up the line: Managers, in particular, must demonstrate that they are not afraid of customer feedback. Many good companies insist on managers personally handling floor or telephone complaints from time to time.
4. Responding to complaints quickly and courteously with common sense to improve customer loyalty: A speedy response can add up to
25 % to customer loyalty. Toyota Motor Sales USA, Inc. has adopted a formula for customer satisfaction:doing the job right the first time + effective complaint management = maximum customer satisfaction/loyalty.
5. Offering specific training in complaint handling: Customer-focused organisations make sure that their customer service training includes complaint handling. Unfortunately, many customer service courses ignore or simplify complaint handling, the most delicate part of customer service.
6. Drafting scripts for customer service representatives: Because they don't know what to say, service representatives without scripts tend to hurry through the complaint handling process. Many complaint handling scripts ask service representatives to first tell the customer that they are sorry.
7. Creating opportunities to discuss complaints in groups: By holding regular discussions about current complaints, organizations make it possible for service representatives to identify and then offer standard solutions to common customer complaints. The 80/20 rule applies here: most complaints are repeated over and over again.
8. Empowering frontline staff to handle complaints: Complaint-friendly organizations offer clear instructions to staff about how and which complaints are to be handled directly by frontline staff. They also identify complaint situations that need to be bumped up to management.
9. Not giving away the store when customers complain: Best practices include focusing on emotional handling of complaints, rather than simply giving products, price reductions, or discounts in an attempt to satisfy complaining customers.
10. Instituting processes for complaint management: Complaint-friendly organizations utilize technological processes enabling them to rapidly take information from customers and apply it to quality improvement, market shifts, and meeting customer needs.
11. Ongoing coaching: Organizations that are really good at complaint handling understand that staff needs ongoing help with complaint handling.Call Centres tape record calls with customers, and then use these calls in regular coaching sessions.
12. Encouraging appropriate descriptions of customers: Organizations that are highly sensitive to the role of customers in their businesses create a mood of respect for customers by discouraging name calling and disparagement of customers.
13. Resolving complaints on the first contact: This helps (i) save money by eliminating unnecessary additional contacts that escalate costs and(ii) build customer confidence. A call back which involves two or more employees just has to cost more than a call that is handled right the first time. Research confirms that resolving a complaint on the first contact reduces the cost by at least 50 percent.
14. Technology utilization is critical in complaint handling systems: Use computers to develop a data base of complaints, and see if you find a trend. Then fix it! The best-in-business electronically compile customer complaint information and present it to everyone, including management,so that the organization could better align services and products to meet customer expectations.This section completes our discussion on elements of customer relationship management. Given below are some interesting marketing insights about customer responses to power disruption situations, which can provide valuable lessons in handling customer complaints and their expectations.
INTERESTING MARKET HIGHLIGHTS
• A January 1999 ice storm around Washington, DC, left 400,000 customers without power for five days. Customers were relatively understanding of the immense repair task that utility crews faced, but they were furious with the inability of local utilities to provide accurate information on when the power would be restored. The best line crews in the business won't keep your customers happy if you can't tell them when the lights will come back on.
• In the fall of 1998, financial services provider Charles Schwab & Company"crossed the line," with more than half of its transactions occurring via the Web. Schwab now gets 20 million hits per day on its Web sites. Over the phone, this amount of traffic would require 20 call centres, rather than the company now has. The move to the Web hasn't caused Schwab toabandon personal interaction, however. Even as online trading was blossoming, Schwab opened 55 new offices in the past two years. How can utilities take advantage of the efficiency of Web-based services without losing customer intimacy?
• Companies in many industries have found that 80 percent of their profits come from 20 percent of their customers. If it's not possible to migrate customers into the profitable column, many companies assume they may be better off without them. For utilities, however, this issue is complicated by regulatory obligations to serve. Some utilities have found ways to route problem callers (like delinquent accounts) into special voice-mail menus that minimize interaction costs while providing the required level of service.In a competitive market, utilities will need to have more control over customer service costs than ever before.
•It is common marketing wisdom that it costs five to eight times more to acquire a new customer than to retain an existing one. Of course, before restructuring, both customer retention and acquisition costs were foreign concepts to utilities. Growing recognition of the lifetime value of a custome relationship is raising the profile of customer care in the utility industry from an operations backwater to a key strategic asset.We will now look at the processes involved in collecting primary information about the customer satisfaction through customer surveys.
Effective Complaint Resolution and Grievance Redressal
Complaints are often looked upon by service providers as irritating reminders of their own failures or inadequacies or as messages from over demanding customers who refuse to be satisfied. They are also seen as being disruptive of ongoing processes, making it necessary for somebody to take time off and handle the complaint. These attitudes towards complaints often affect our handling and redressal of complaints.In a customer driven company, complaints are seen as opportunities to improve corporate performance and a second chance to satisfy an unhappy customer. Customer complaints can provide valuable insight into what th consumer is looking for and what areas in the company need improvement, as
they:
− provide customer feedback and facilitate implementation of improvement plans;
− form a vital means of measuring performance and allocating resources to tackle the deficient areas in a business;
− prevent complacency and help in harnessing internal competencies to optimize products and services;
− help gauge internal performances against competition; and
− enable an organization to understand customers better and improve relationships.
Although often not followed, it is a widely acknowledged business belief that customer should not be transferred to more than two people for resolution of complaints. In cases where such a transfer is unavoidable, the first person of contact must determine the right person to resolve the matter. If the complaints satisfaction at the first or the second contact, is not resolved to the customer'further steps in the process must be explained and relevant documentation posted out to the client. Studies reveal that four questions help organizations to determine if they are getting the most out of their complaint processes.
They should verify if their complaint management processes:
• satisfy customers who have experienced a failure?
• retain the above-mentioned customers?
• improve organization-wide processes as a result of feedback from complaints? and
• help retain employees?
Certain practices of complaint-friendly organizations have been identified as best practices based on summary reviews of marketing research and wide ranging discussions with organizations working to become excellent at complaint handling. We present them below:
1. Not setting targets to reduce the number of complaints: Tempting as the "zero defects" concept makes this, complaint-friendly organizations understand that setting goals to reduce complaints mainly encourages staff to cover up bad news from customers. This creates a mindset among staff that customer complaints are negative and senior management
doesn't want to hear about them.
2. Making it easy for your customers to complain: Your customers will make it easy for you to improve. Informed customers know how your
services should work. If things are not working, customers are the first to know. Customers who are dissatisfied tell other customers including those who are happy with your service. The best-in-business use feedback from phone calls, letters, and surveys to identify and resolve root causes of dissatisfaction and to change their services to ensure that the customer will be quickly satisfied.
3. Creating a receptive managerial attitude to hear feedback passed up the line: Managers, in particular, must demonstrate that they are not afraid of customer feedback. Many good companies insist on managers personally handling floor or telephone complaints from time to time.
4. Responding to complaints quickly and courteously with common sense to improve customer loyalty: A speedy response can add up to
25 % to customer loyalty. Toyota Motor Sales USA, Inc. has adopted a formula for customer satisfaction:doing the job right the first time + effective complaint management = maximum customer satisfaction/loyalty.
5. Offering specific training in complaint handling: Customer-focused organisations make sure that their customer service training includes complaint handling. Unfortunately, many customer service courses ignore or simplify complaint handling, the most delicate part of customer service.
6. Drafting scripts for customer service representatives: Because they don't know what to say, service representatives without scripts tend to hurry through the complaint handling process. Many complaint handling scripts ask service representatives to first tell the customer that they are sorry.
7. Creating opportunities to discuss complaints in groups: By holding regular discussions about current complaints, organizations make it possible for service representatives to identify and then offer standard solutions to common customer complaints. The 80/20 rule applies here: most complaints are repeated over and over again.
8. Empowering frontline staff to handle complaints: Complaint-friendly organizations offer clear instructions to staff about how and which complaints are to be handled directly by frontline staff. They also identify complaint situations that need to be bumped up to management.
9. Not giving away the store when customers complain: Best practices include focusing on emotional handling of complaints, rather than simply giving products, price reductions, or discounts in an attempt to satisfy complaining customers.
10. Instituting processes for complaint management: Complaint-friendly organizations utilize technological processes enabling them to rapidly take information from customers and apply it to quality improvement, market shifts, and meeting customer needs.
11. Ongoing coaching: Organizations that are really good at complaint handling understand that staff needs ongoing help with complaint handling.Call Centres tape record calls with customers, and then use these calls in regular coaching sessions.
12. Encouraging appropriate descriptions of customers: Organizations that are highly sensitive to the role of customers in their businesses create a mood of respect for customers by discouraging name calling and disparagement of customers.
13. Resolving complaints on the first contact: This helps (i) save money by eliminating unnecessary additional contacts that escalate costs and(ii) build customer confidence. A call back which involves two or more employees just has to cost more than a call that is handled right the first time. Research confirms that resolving a complaint on the first contact reduces the cost by at least 50 percent.
14. Technology utilization is critical in complaint handling systems: Use computers to develop a data base of complaints, and see if you find a trend. Then fix it! The best-in-business electronically compile customer complaint information and present it to everyone, including management,so that the organization could better align services and products to meet customer expectations.This section completes our discussion on elements of customer relationship management. Given below are some interesting marketing insights about customer responses to power disruption situations, which can provide valuable lessons in handling customer complaints and their expectations.
INTERESTING MARKET HIGHLIGHTS
• A January 1999 ice storm around Washington, DC, left 400,000 customers without power for five days. Customers were relatively understanding of the immense repair task that utility crews faced, but they were furious with the inability of local utilities to provide accurate information on when the power would be restored. The best line crews in the business won't keep your customers happy if you can't tell them when the lights will come back on.
• In the fall of 1998, financial services provider Charles Schwab & Company"crossed the line," with more than half of its transactions occurring via the Web. Schwab now gets 20 million hits per day on its Web sites. Over the phone, this amount of traffic would require 20 call centres, rather than the company now has. The move to the Web hasn't caused Schwab toabandon personal interaction, however. Even as online trading was blossoming, Schwab opened 55 new offices in the past two years. How can utilities take advantage of the efficiency of Web-based services without losing customer intimacy?
• Companies in many industries have found that 80 percent of their profits come from 20 percent of their customers. If it's not possible to migrate customers into the profitable column, many companies assume they may be better off without them. For utilities, however, this issue is complicated by regulatory obligations to serve. Some utilities have found ways to route problem callers (like delinquent accounts) into special voice-mail menus that minimize interaction costs while providing the required level of service.In a competitive market, utilities will need to have more control over customer service costs than ever before.
•It is common marketing wisdom that it costs five to eight times more to acquire a new customer than to retain an existing one. Of course, before restructuring, both customer retention and acquisition costs were foreign concepts to utilities. Growing recognition of the lifetime value of a custome relationship is raising the profile of customer care in the utility industry from an operations backwater to a key strategic asset.We will now look at the processes involved in collecting primary information about the customer satisfaction through customer surveys.
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ReplyDeleteThis insightful post underscores the critical role of customer relationship management (CRM) in fostering long-term customer relationships and corporate success. I believe integrating AI tools can significantly enhance CRM strategies. One such tool, VoiceSphere.co, offers a unique chat interface that allows users to interact with their documents in an intuitive manner, obtaining context-specific answers. This can be particularly beneficial in managing detailed customer information and enhancing customer service.
ReplyDeleteImagine having a conversation with your CRM database, asking for specific customer insights or complaints, and receiving immediate, accurate responses. VoiceSphere's AI-driven approach could revolutionize how organizations access and utilize customer data, ensuring a more focused and consistent service delivery. This aligns perfectly with the blog's emphasis on creating a customer-centric organization, where customer satisfaction is the key to sustained profitability and growth.
Embracing such innovative AI tools could be a game-changer in managing customer relationships more effectively.
Excellent information about customer relationship management.
ReplyDeletecustomer communication management and digital customer communication management