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CRMutilitiessurveypointofviewbyRobertE.WelchandJonChangWhatDoUtilitiesReallyKnowAboutCustomers?KeyfindingsfromaCustomerRelationshipManagementsurveyrecentlycompletedbyCapGeminiErnst&YoungontheUSmarketDeregulationpatternskeepresurfacing.Shortlyaftercontrolsarelifted,pricesfluctuatewildlywhileearningsvisibilitycloudsover.Thenthepriceofcommodityproductsandservicesdropsuntilrazor-thinmarginsarereached.Intheprocess,somecompaniesremainviablebyinstitutingsuper-efficientoperations.Butthewinnerspullaheadbycombiningefficiencyandsuperiorcustomermanagement,andbybuildingnewsuitesofdifferentiated,profitable,customer-focusedservices.It’sapredictableparadigmwithapredictablemessage:Leadersinderegulatedindustries-mostindustries,infact-aredistinguishedmoreandmorebytheservicetheyprovideandtherelationshipstheyestablishwithcustomers.ThisrealityisthebasisofCustomerRelationshipManagement:technologies,processesandculturechangesworkingtogethertomaximizethevalueofacompany’scustomerportfoliothroughmoreeffectivemarketing,sales,andcustomerservice.CRM,however,canbeprettyoldnewstoutilitiesthat,inatleastonesense,havebeenapplyingcustomer-managementprincipalslongerandmoreintenselythananyone.Afterall,whatotherindustryhassystemsandprocessesdesignedtoconnectwitheverycustomerallthetime?PerhapsthisiswhymanyutilitiesperceivetheirCustomerInformationSystems(CIS)ascustomerrelationshipmanagementtools.Unfortunately,CISsreallyaren’ttherighttoolforCRMbecausetheysupportafiscalrelationshipbetweentheutilitycompanyandthepremisesthatthecustomerjusthappenstooccupy.Nevertheless,utilitiesarehardlynewtothesubjectofcustomermanagement.Togetahandleonjusthowsavvyutilitiesandotherindustriesareaboutcustomerrelationshipmanagement,CapGeminiErnst&YoungUSLLCrecentlycompletedanextensiveCRMsurvey.Insightsfromthatinitiativeshowthatutilitiesaresignificantlymorelikelythantheaveragerespondenttocollectandstorecustomer-specificinformation.Andofallrespondentcategories(whichalsoincludedFinancialServices,Telecommunications,Entertainment/Hospitality,High-techandConsumerProducts/Retail),utilitieswerethemostlikelytohaveassignedexplicitcustomerrelationshipmanagementresponsibilitiestoaseniorexecutive.Utilitiesalsowereamongthemostlikelytohaveactivity-basedcosting(ABC)approachesinplace.Butgiventheirobviouscustomerrelationshipmanagementmindset,justwhatareutilitiesdoingwiththatheadstart?Theanswer,unfortunately,isnotenough.Atanesotericlevel,only17percentofutilityrespondentseventhinkCRMisacriticalmeansofimprovingthebusiness.Comparethattotheveteransofthederegulationwars,wherenearlyhalfofallfinancialservicesandtelecomrespondentsthinkCRMiscritical.Utilityrespondentsalsowere50percentmorelikelythanthesurveyaveragetoforecastadecreaseinCRMbudgets,40percentlesslikelytohaveputaCRMstrategyintoaction,and30percentmorelikelytoperceiveCRMinvestmentreturnsoftenpercentorless.What’smore,justtenpercentofutilitiescurrentlypulldatafromasinglerepository.Whichmeansthatanoverwhelmingmajoritysimplydoesn'tbothertopulldata,ormustdownloaddisparatecustomerdatafrommultiplesources.Inasimilarvein,nearlytwothirdsdon’thaveaccesstocurrentdatathroughthefrontoffice.Thebottomlinehereisthatfewutilitiescanconjureupasingleviewofthecustomer,nordotheyhavetheup-to-dateinformationneededforqualitycustomercontactsinthefrontoffice.Andwithoutacoordinated,singleviewofcustomerinformation,it’simpossibletodeterminecosttoserve,ortoadroitlymanagecustomerexpectations.Surveyresultsalsoshowthatlessthanhalfofallrespondingutilities“touch”acustomermorethanonceperquarter,andthatonlythreepercenthaveidentifiedandcoordinatedallpotentialcustomertouchpoints.2WhatItMeansTogetahandleonthereal-worldimplicationsoftheseresults,CGEYusedrespondents’inputtocreatetheCRMIndexsm,basicallyabarometerofCRMcapabilities.TheIndexplotseachcompanyorindustry’sdegreeofcustomerinvolvementalongtwodimensions:MindsetandConnectivity.Themore“mindsetfocused”acompanyis,themoreitorientsitsbusinesstowardone-on-onerelationships.Theotherdimension,“connectivity,”measurestheinclusivenessorreachofacompany’sprocessmodelandinfrastructure.AsshowninFigure1,thegreatbulkofresponsesfollowanupwarddiagonalpath,whichimpliesthatmostcompanies’investmentsarereasonablyconsistentwiththeirintentions.Thusthelowerleftquadrant(BasicTransactors)ispopulatedbyorganizationswhosebusinessfocusisrelativelyprovincial(market-ratherthancustomer-orrelationship-focused)andlargelyun-integratedinternallyorexternally.Inthemiddle(CustomerSatisfiers)arecompaniesthatdemonstratesomereal-timerecognitionofcustomerstatusacrosstouchpoints.Theupperright(RelationshipOptimizers)isinhabitedbycompaniesthatusecalculationsabout“customerlifetimevalue”todrivedecision-making,andhaveinplaceaformalandfairlyautomatedCRMinfrastructureintegratedacrosstheenterprise.TheIndexdemonstratesthatutilitiesconsistentlytrailotherindustriesinCRMsophistication.Lookingsolelyatthethreebest-representedquadrants,wedeterminedthatutilitiesare50percentmorelikelythanthegeneralsurveypopulationtobeBasicTransactors,30percentlesslikelytobeCustomerSatisfiers,and50percentlessli