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Automated Voice Messaging Provides Utilities with an Efficient, Effective Vehicle for Enrolling Customers in LIHEAP

As funding for next year’s assistance becomes available in a few months, utilities should take the time to reevaluate their customer communication strategies around the Low Income Home Energy Assistance Program (LIHEAP).

LIHEAP is a block grant program administered within the Department of Health and Human Services (HHS) that is designed to help low-income households pay their home energy bills, particularly during extreme weather conditions. All 50 States, the District of Columbia, 140 Indian Tribes and Tribal Organizations, and five Insular Areas receive block grants through the program. This funding provides support for eligible customers and the utility provider benefits by securing dollars up front and reducing recovery costs for households that would otherwise be unable to pay their bills. The same is true for utilities in deregulated markets, provided they utilize more efficient means to notify and ensure eligible households enroll faster than competing utilities in their area.

Sounds easy enough, right? Not exactly. Aside from the competition amongst utilities for LIHEAP dollars, there are several factors that are exacerbating the tension.

For one, the Campaign for Home Energy Assistance reveals that despite an additional $1 billion allotted for the program in 2006, only 15 percent of eligible households actually received assistance. This means there is far more demand (need) than there is supply (funding), and as funding decreases, this percentage will shrink further. Utilities must strike a delicate balance on how they contact perspective customers so they don’t drive over enrollments and leave households who qualify but won’t get access to the funding.

On top of that, there has been a marked decline in federal funding for LIHEAP in recent years. Program funding went from $3.08 billion in fiscal year 2006 to $2.19 billion in fiscal year 2007, with the number expected to shrink even further to $1.5 billion in FY 2008.

A third factor is continued deregulation in utility markets. As the accompanying sidebar reveals, there are a substantial number of states that have fully implemented or are currently implementing competitive gas and electric utility markets. This means even more competition for LIHEAP funds in the not too distant future.

All of these issues are converging, putting immense pressure on utilities to reach eligible customers as quickly as possible to ensure they enroll in LIHEAP and secure dollars granted to their state. Until recently, utilities relied on traditional contact methods, such as live agents and direct mail, to reach out to customers. However, these methods have proven costly to implement, and typically fail to generate a high enough response rate to enroll a large percentage of qualified consumers.

The mounting competition has compelled utilities to seek out swifter, more efficient forms of communication. Today, many utilities rely on Automated Voice Messaging (AVM) as a cost-effective way to inform current customers of their assistance options and in some cases qualify them over the phone. AVM also has greater control mechanisms so utilities are able to easily turn up or down its messaging reach.

AVM is an effective vehicle for delivering succinct, professionally recorded messages to a large number of customers at a fraction of the cost of manual dialing, predictive dialers or direct mail. AVM eliminates the technical constraints found in traditional on-premise contact center solutions, such as limited telephony capacity and flexibility that have restricted contact centers from supporting seasonal and time-sensitive customer contact campaigns such as LIHEAP.

With predictive dialers, for instance, line capacity is often tied up by agents leaving messages on machines or reaching the wrong party. Alternatively, AVM solutions offer virtually unlimited calling capacity that enables utilities to periodically make a rapid succession of calls to reach customers within tight windows.

Utility companies can proactively reach customers with a pre-recorded message that verifies it has reached the right party and notifies them of their possible eligibility for LIHEAP and the benefits of the program. A brief, interactive survey with qualifying questions determines the customer’s eligibility and may allow the customer to enroll immediately over the phone. Utilizing this approach, utilities can deliver a consistent, positive customer experience, no matter how many customers they call.

With AVM, utilities can implement LIHEAP campaigns within days, and register results in real time. Because customers are empowered to take immediate action and enroll right on the call, response rates are immediate and far superior to traditional contact methods. In fact, utilities report program response rates of 5 to 15 percent. At the same time, operating costs are just pennies per contact, with enrollment costs just one-tenth of alternate channels such as direct mail.

AVM Fuels Better Customer Communications

In addition to LIHEAP, utilities are leveraging automated voice messaging for a variety of marketing, customer care and collections processes. Some of the most widely adopted customer contact campaigns used by utilities include:

• Service interruption and outage notifications;
• Maintenance schedule confirmations;
• Billing choice enrollment;
• Call avoidance or deflection campaigns;
• New bill format announcements;
• Customer satisfaction surveys; and
• Payment reminders.

With voice messaging, utilities can vary the scripts depending on the calling campaign and the desired level of customer interaction. Some campaigns may give customers the option to connect to a live agent, where others may direct customers to an automated system to complete a transaction. Messages can also be customized depending on whether the system reaches a live person or a voice mail system.

Whatever the customer contact campaign may be, voice messaging is a powerful tool for reaching a large group of customers quickly and cost effectively.

About the Author:

Eric Keough, vice president, Consumer Direct Strategy, brings more than 13 years of marketing experience to SoundBite Communications. He currently leads the consumer direct strategy focusing on a number of industries – telecommunications, retail, utilities and marketing services. He has experience in both B2C and B2B businesses and has managed and designed numerous marketing engines with emphasis on integrated product launches, website builds, loyalty and retention programs, and segmentation strategy.

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Utility Deregulation Increases Competition for LIHEAP Dollars

States with deregulated utility industries include:

Electric:

• Currently implementing a competitive electric utility market for investor-owned utilities: Arizona, Connecticut, Delaware, District of Columbia, Illinois, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas and Virginia.

Gas:

• Have fully implemented a competitive natural gas market: New York, New Mexico, West Virginia and Connecticut.
• Have begun implementing a competitive natural gas market: California, Florida, Georgia, Maryland, New Jersey, Ohio and Pennsylvania.
• Have either established a timeline for implementing restructuring, or are offering pilot programs for some customers: Delaware, District of Columbia, Illinois, Indiana, Kentucky, Massachusetts, Michigan, Montana, Nebraska, Rhode Island, South Dakota, Virginia, Wisconsin and Wyoming.

Source: U.S. Federal Energy Management Program

Sat Dec 01 00:00:00 CST 2007

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