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Why Low-Income Customers Need Their Utilities’ Help Now More Than Ever

Posted By Karen Morris, Tuesday, August 15, 2017

Utilities have struggled for years to engage their customers, and in no segment, have they struggled more than low-income. Low-income consumers have historically been difficult to serve, and managing the challenges of delinquency and bad debt have further bogged down these relationships. Today, even though the stock market is hitting record highs, unemployment is on the decline, and poverty rates are falling, this problem might seem like an issue that utilities can take a break from focusing on. That isn’t the case.

The rebounding economy has not improved conditions for millions of low-income families in America who are still living in perpetual financial insecurity. Helping these families manage their energy spend so they can keep the lights on and ensure that their children stay warm in the winter should be a priority for every utility. With proposed federal budget cuts on the horizon this situation could decline even further.

ACEEE reports that low-income households are spending an average of 7.2 percent of their income on utility bills, that is more than triple the spend of median households. Utilities now have a unique opportunity to ease this energy burden and help these families get ahead.

How can utilities help and still be profitable? 

 In researching a solution to the low-income burden on both families and utility Apogee discovered that it is common for this customer segment to contact the utility several times every month repeatedly. These customers are well known to the utility, they may not be hard to reach but they are hard-to-serve.

The benefits of a successful low income strategy include substantial rewards. For every 10,000 low income customers, if you reduce one call per month for ten percent (10%) of these customers, the annual savings to the utility is between $60,000 and $90,000.  For larger utilities, for every 100,000 low income customers, the savings are $600,000 to $900,000 annually. These savings do not consider other hard costs such as reductions in collection efforts, bad debt, and avoided disconnect and reconnect services, nor the benefit of improved cash-flow, improved customer satisfaction and increased customer engagement.

What’s the secret?

Deliver a message that is relevant, personal, and prompt. Remember the basics of customer satisfaction. Give customers control, care, and choice.

Control

  • Just in time energy and payment alerts delivered by email or text that allows time to adjust behavior before the high bill arrives.
  • Energy saving recommendations that put customers in control of their energy use. Suggesting actionable low cost or no cost opportunities to save energy.
  • Program awareness offering opportunities to participate and benefit.

Care

  • Deliver your message with dignity when there is still time to make a difference in the bill.
  • Reach out through social organizations.
  • Offer multi-lingual communications and address cultural differences.

Choice

  • Communicate multiple payment options like budget billing, authorized payment centers or pre-pay options.
  • Allow customers to choose their preferred method of communication.
  • Use a mobile friendly preference management system

Apogee is dedicated to helping utilities build trust and bring value to low income communities while easing the burden to serve this growing segment. Apogee’s new Energy Platform for Information & Communication, or EPIC, offers a way to tackle the challenges associated with engaging hard-to-serve customers proactively, through ongoing engagement. EPIC gives actionable guidance for renters, low-income or multifamily dwellers.

Want to learn more about low income outreach strategies and digital engagement that can help you make a difference in your community? Call 678-684-6801 or info@apogee.net or visit  www.apogee.net. Subscribe to Apogee's blog at www.apogee.net/blog

 

About The Author

Jim Malcom, Chief Financial Officer and EVP of APOGEE Interactive, Inc.

Mr. Malcom, has been Apogee's advocate for low income initiatives for the past 2 years. He brings more than 25 years in corporate finance and accounting to Apogee, which began with the firms KPMG and Ernst & Young in Atlanta. He has held senior posts as chief financial officer, corporate controller, vice president and treasurer for such area companies as Heidelberg USA, LecStar Telecom and Powertel.

Jim is a graduate of the University of Georgia with a bachelor's and master's degree in business administration, a certified public accountant, and a chartered global management accountant.

 

Tags:  Apogee Interactive  Customer Engagement Energy Efficiency  Customer Engagement Residential Programs  customer satisfaction  low income 

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Apogee Interactive Launches Energy Platform for Information & Communication (EPIC) Targeted at Hard-to-Serve Customers

Posted By Karen Morris, Wednesday, August 9, 2017

New “EPIC” Suite of Digital Products Unlocks Engagement, Cost Savings

ATLANTA, GA – August 9, 2017 Apogee Interactive announced the launch of EPIC, the Energy Platform for Information & Communication (EPIC) that provides a compelling suite of cutting-edge digital customer engagement tools specifically targeted to low-income consumers, renters, and residents of multi-family buildings.  It shows them realistic ways to save energy and money that builds trust and customer satisfaction in this crucial (and growing) market segment.

EPIC communicates energy information targeted to customers who lack the ability to make significant home energy efficiency investments. It emphasizes how they can realistically control their energy costs and gives them meaningful insights into how small changes in behavior can add up to substantial savings. The platform is based on a customized edition of Apogee’s flagship Energy Advisor analysis application that provides customers insight into their energy use, habits, and trends. EPIC leverages email and texting to supply on-the-go energy efficiency guidance enabling families to take charge of their spend. Tips are tailored to a consumers’ household profile and can often be implemented right away with no outside assistance and at little or no cost.

EPIC’s capabilities begin with targeting the right customers for relevant program participation, then recruits and enrolls them.  Not stopping there, it continues with personalized progress reporting to keep customers engaged and motivated.  In addition, the platform includes Apogee’s most popular Special Purpose Calculators that give customers a unique look at the energy footprint of their household electronics and appliances. Optional engagement enhancements to the base EPIC offering include video messaging, alerts, bill explanations, and energy summary reports.

“Apogee’s Energy Platform for Information & Communication produces truly epic results for utilities and customers alike,” says Apogee CEO, Susan Gilbert. “While customers enjoy personal messaging with guidance about savings, utilities achieve increased customer satisfaction rates and lower operating costs from reduced call volume, improved cash flow, and less bad debt.”

For more information about EPIC’s advantages and how it could help you support your hard-to-serve customers, contact Apogee.

About Apogee Interactive, Inc.

Apogee Interactive is nation’s leading full-service provider of proactive customer engagement software services for utilities. A partner with the utility industry since 1993, Apogee’s digital engagement platform delivers on-line and outbound proactive, personalized communication to consumers nationwide. The company’s digital reach extends through more than 600 utilities to 48% of US households and businesses, increasing utility customer satisfaction and slashing costs. Apogee’s cloud-based, SaaS platform enables more meaningful customer engagement, proven sustainable energy results, and improved program performance for utilities. For more information visit www.apogee.net  or LinkedIn: https://www.linkedin.com/company/99046/

Apogee Contact: Karen Morris – 678-684-6801 – kmorris@apogee.net

Tags:  Apogee Interactive  corporate communications  customer engagement digital  digital engagement  energy education  energy efficiency programs  home energy retrofits  low income 

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Managing Pre-Paid Customers | 5 Lessons Utilities Can Learn from Telecom

Posted By Karen Morris, Wednesday, May 10, 2017

Managing Pre-Paid Customers | 5 Lessons Utilities Can Learn from Telecom

 

Jim Malcom, Executive VP, CFO Apogee Interactive, Inc.

 

On a recent webinar that drew more than 100 registrants, it became clear that energy companies are struggling with pre-paid service offerings just as the telecommunications industry did many years ago. Spending more than half of my career focused on finance in the telecom industry and now focused on the energy industry, there are many lessons to be learned from telecom about managing pre-paid customers.

 

My career in telecom began with a family owned payphone service when selling pre-paid long distance cards was a way to increase revenue and leverage location relationships. Moving on to senior management for Ernst & Young, managing telecommunications, I observed major telecom carriers experimenting with pre-pay offerings. Finally, I joined PowerTel as Treasurer and then LecStar as CFO; both companies had significant pre-paid customer bases. Over the course of a decade, I watched the telecom companies evolve as they tackled the challenges of pre-paid services.

 

Here’s what utilities can learn from Telecom

 

Rule #1 Payment Network

 

Utilities must make it easy for customers to locate authorized payment centers and offer payment options, cash being the most crucial. Pre-paid customers are frequently underbanked and make multiple cash transactions during a billing period. Keys to success include:

 

·         Have a robust network of authorized payment centers.

·         Avoid unauthorized payment centers where hidden fees apply.

·         Accept payment options, cash, check, credit cards.

 

Rule #2 Reduce Call Volume

Pre-paid customers check their account balance many times during a month, possibly daily. This drives up call volume so, with a customer service call averaging $5.00, utilities should consider ways to avoid calls. Some smart choices are:  

 

·         Leverage a caller ID system that prompts the IVR to play the current balance.

·         Designate and train CSRs to handle pre-paid customer calls.

·         Cost effective text alert solutions are available through Apogee that push account information.

·         Offer a pre-paid customer portal that includes balance information.

·         Apogee offers an energy forecasting application that can be incorporated into a portal clearly displaying the cost of energy in relation to the 5-day weather forecast.

 

Rule #3 Discovery of Unwritten Rules

Pre-paid customers will discover the unwritten rules; working rules to their advantage to the extent of using them as a budgeting tool by making minimum payments to reach the cut off thresholds.

Does your utility have rules about?

·         Shutting down a customer after a certain time of day or late on a Friday?

·         During bad weather?

 

Rule #4 No Demand Elasticity

Demand elasticity is a macro-economic principal. For instance, when gas is cheap, consumers drive more and purchase less fuel-efficient vehicles resulting in increased spending for fuel. The opposite is true when gas prices increase.

Powertel tried to entice customers to increase their monthly wireless spend. They concluded that prepaid customers would only spend a set amount regardless of the price per minute. Therefore, there is no demand elasticity for prepaid services.

If a utility has a prepaid EE program, customers are not likely to change their spending pattern regardless of the price of a kWh.  

Rule #5 Lower Monthly Spend

PowerTel, found prepaid customers spent approximately 10 to 15% less than post-paid customers.

Why?

 

  • They are more budget conscious and have limited funds to spend on any service.
  • They make purchasing decisions every time they replenish their prepaid account.

Based on a February 2016 study by DEFG (Distributed Energy Financial Group), prepaid electric customers exhibit similar spending patterns to the Powertel findings.

In conclusion, though pre-paid customers are a challenge and costly to manage, understanding their profile and adjusting business practices to accommodate them will improve your success. From the telecom pioneers we know, customers are more likely to be cash basis payers making frequent, small payments. They are likely to have their electric service temporarily disconnected, working unwritten rules to their advantage. They are hyperaware of their energy spend and are not likely to increase their energy use.

 

About the Author

Jim Malcom, Chief Financial Officer and EVP of APOGEE Interactive, Inc., brings more than 25 years in corporate finance and accounting to Apogee, which began with the firms KPMG and Ernst & Young in Atlanta. He has held senior posts as chief financial officer, corporate controller, vice president and treasurer for such area companies as Heidelberg USA, LecStar Telecom and Powertel.

Jim is a graduate of the University of Georgia with a bachelor's and master's degree in business administration, a certified public accountant, and a chartered global management accountant.

 

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Tags:  apogee Interactive  customer engagement  energy bills  low income  Pre-paid programs  Residential Programs 

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