retail energy case study

The following case study was written by one of our retail energy clients. This is a client we've worked closely with over the past three years. When we met, we both had the goal of making a real difference in how energy consumers are served. Our client had two primary objectives influencing their priorities and decisions: 1.) Make it easy for end-customers to do business with them, and 2.) Make it easy for the customer service team to do what they come in each morning to accomplish, which is to take good care of customers.

Why we were frustrated:

We implemented a customer portal 8+ years ago in an effort to get ahead of the emerging self-service customer trends in our industry. The initial portal solution was forward thinking and gave us hedging tools that allowed us to reshape our critical price program business. As a mid-size energy marketer, industry leading technology tools can give us a significant competitive advantage when going head to head with bigger players. But along with the gains came problems and what amounted to a zero sum game. The portal was not able to seamlessly communicate with our back-office system leading to process inefficiencies while the complicated nature of the hedging module left us feeling overwhelmed. The net result was that we underutilized the system. As our business and customers evolved, we used the system less and less, primarily because the technology had lagged behind our needs in a digital world. In the end, frustration mounted at the realization we were investing in technology that was causing us to develop outside systems and more complicated processes to keep in touch with our customers. Wasn't technology supposed to save us time, money and aggravation?

Time for a change:

This challenging journey led to a major decision to change portal and customer engagement vendors. We decided to partner with MPX in the fall of 2017 with a projected launch date of February 2019. We did not anticipate the coldest period in years to hit our area in January which left us unavailable to work on our project. MPX was fantastic in working around our urgent need for flexibility and we successfully did a soft launch of the portal on February 15th. Quite amazing given the circumstances. By March, we were ready to tell our customers of our new portal and how it would serve them better. We communicated via eblasts and were able to enroll 20% of our customers in paperless, online accounts in the first 3 months. This led us to wonder if 20% of our customers became online, self-serve … how many labor hours were now freed up to service new customers?

Did technology really save us time and money?

Our MPX partnership initially centered around the portal and other digital engagement tools but we quickly decided to move our statement/invoice processing to them as well. This positioned MPX as our single source customer communication vendor. They assist us in communicating with our customers more frequently and effectively without increasing our overhead to do so. We are able to fully automate mailing of statements, text notifications for payments, deliveries & service appointments, enroll more customers in automatic payment routines and reduce manual processes in the back-office system. Perhaps the BIGGEST impact came from our development of a simple and truly automated 4 step online price protection plan enrollment. Years prior, we had multiple outside systems generating budgets, pre-buys and other price protection plans, often leaving customers annoyed and confused. Since launch in the summer of 2018, we have been able to fully automate sign-ups for 50% of our customers which equals a 40% reduction in customer service costs. What could your business do if 40% of your office labor costs were freed up during these important plan season months?

Did technology create revenue?

Saving money is only half the battle. In essence, it is usually a one-time event; you find a solution that allows the removal of costs (time and/or headcount) but that becomes a new normal. It is not the gift that keeps on giving. And cutting costs has a reasonable limit. A dealer can only be so lean. Going too far results in burned out employees and less than stellar Customer Experience. Our expectation was that the MPX platform could also help us grow our base and, thus, top line revenue. Growth is really the most important thing for any dealer but it can be incredibly hard and expensive. We found a new way to bolster our customer count; use consumer technology to provide the same “shopping” experience and online service they get elsewhere every day. The MPX portal is so progressive that it easily beats any web based services offered by our competitors. This made our existing customers happy. And then they started to refer us to friends and family. From a marketing perspective, we are now able to position our company as a leader in customer facing technology. In short, it is easy to become our customer and to be our customer. This is driving gains at a year over year rate of 10%. That is not a typo. 10% annual and repeatable organic growth! At very low acquisition costs. This has been a complete game changer for our financial results.

But what about the hedging?

While self-serve customers are a dream in the energy space, having all these price protection plans doesn't help much if you don't know what you need to hedge. So we kept it simple … customers enroll in 4 easy steps and data is fed in real time to our dashboard showing us what we need to cover and the timeline that is relevant for us for proper margin management. We utilize simple screens so we don't experience data overload nor does our team need to be commodity traders to get their jobs done. MPX helps us match what we have committed in terms of gallons and prices to what we have purchased, both physical and financial instruments … and most importantly … where we are exposed! This tool is ideal to protect our business and keep us competitive.

Results Speak Louder:

Our goals going into this project were:

  • Engage with customers more without increasing overhead expense
  • Grow our customer base without increasing overhead expense
  • Develop a tool that allowed our customers to have access to their account 24/7
  • Provide a simple process for customer to sign up for their Price Protection Plans without the need for customer service assistance.
  • Automate budget & pre-buy set up in our software system to eliminate manual entry
  • Reduce manual processes for payment routines, text notifications, and statement/invoice mailings.

Our results to date with this project:

  • Account growth is at a sustained rate of 10% (meaning repeated for past 2 seasons and going in that direction this season). Our suite of online engagement tools allows to easily reach a large audience and convert them to new customers easily, inexpensively, and in an automated environment.
  • We now send text alerts to every delivery customer the night before their delivery including automatic customers. This has saved us wasted trips from COD customers who forgot to leave a check, and saved us short delivery shorts when customer's usage patterns have changed. We also send service appointment alerts the night before an appointment. This has saved us wasted trips due to customers forgetting or having a change of plans around our scheduled calls.
  • The portal successfully answers 95% of questions customers call to inquire about.
  • 50% of our customers signed up for price protection and budgets online with no assistance from a customer service team member. Another 10% enroll (most often successfully) but call to verify they were making the right choices before submitting their contract. For each customer that self serves, we save roughly 15 minutes of staff labor.
  • After some data movement testing, we have now determined that price protection plans for budgets & pre-buys automatically set themselves up within 60 seconds of a customer entering their own plan online. Instant set up and communication allows customers to see real time account update information on their end.
  • We have eliminated the auto payment routine from our back-office software and have automated the ACH routine. We were also able to eliminate our manual process of generating lists of customers to send mass texts to each day, and mailings are no longer done in house saving labor.
  • Hard ROI:
    • 10% sustained organic customer year over year growth
    • Automate 50% of budget enrollments: reduced CSR cost by 7%
    • Eliminate back office routines: reduced CSR cost by 3%
    • MPX documents and postage: reduced CSR payroll cost by 3%
    • Reduced call volume by 40% off season: reduced CSR cost by 9%
    • Total CSR cost reduction: 22% annually