Customer Satisfaction in the Utility World

1. Customer Satisfaction in the Utility World Dan Comer Director – Customer Experience Operations Northeast Utilities Bob Hybsch Director – Customer Operations PSNH

2. How are Utilities Different? • In most businesses (retail, restaurants, banking, airlines, etc.) if a customer is unhappy with the product, service or price, what do they do? • They go to another company! • In a regulated utility, dissatisfied customers can’t leave. • Dissatisfied customers are certain to share their dissatisfaction with everyone they know whenever they have the opportunity to do so.

3. Drivers of Customer Satisfaction • For utilities, the main drivers are: reliability, service and price • Reliability is very good in most utilities, and has been for many years. • Price was traditionally stable and low • Price stability disappeared with deregulation • CL&P Residential rates are up 32% in last 3 years • WMECO rates are up 51% in the same period • Service levels impact customer experience.

4. Price Stability • PSNH lost price stability in the 1980’s due to costs of construction of the Seabrook nuclear power plant, which resulted in our bankruptcy and eventual acquisition by NU. • 7 consecutive years of 5.5% rate increases • PSNH had the highest electric rates in the country excluding Hawaii!

5. Service is the Difference • If reliability is already good, but prices start to rise, how do we maintain customer satisfaction? • Remember the 3 main drivers of customer satisfaction: reliability, service and price • Through superior service! • “Good” service is not good enough!! • We had to be better than the competition in order to compensate somewhat for the higher prices

6. Similarities between CL&P today and PSNH in the 80’s and 90’s • We could do nothing right in the eyes of customers, media, regulators, legislators, the governor, and other opinion leaders. • CL&P is under the microscope now with the media, regulators, legislature, attorney general, and customers

7. Getting Through it • How do we go from that position to today where PSNH is looked to as the leader in the state on energy issues? • We are a trusted source of information and facts • We are seen as credible and honest • We consistently receive very high customer satisfaction scores • We are considered the model of community involvement and leadership across the state • We were voted “Business of the Year” in 1998 • Our former President was “Business Leader of the Decade” in 1999 • Our current President was named “Business Leader of the Year” in 2006. • We now have the lowest Energy prices of all utilities in New England

8. Compare Chip Bell Recommendations for CL&P to what PSNH did in the 80’s and 90’s • Develop a Clear Service Strategy • Communicate Expectations • Create customer intelligence and scorecard • Assess resource adequacy in customer contact areas • Allow time and resources for supervisor oversight • Manage By Walking Around (MBWA) • Align the organization around the customer experience • Look at complaints as opportunities • Improve employee recognition programs • Train everyone on service leadership

9. Develop a Clear Service Strategy • PSNH senior leaders in the 1980’s and 90’s recognized that prices were rising, and if we wanted to maintain satisfaction, we’d have to provide superior service. • Every management meeting included a discussion of customers and the impact of decisions on the customers.

10. Communicate Expectations • Focus on the service strategy became a part of every meeting, every discussion, and every decision we made. • Corporate Communications was fully engaged and led the communications effort both internally and externally • Excellent service became a key strategy for survival

11. Create customer intelligence and scorecard • We started listening to customers and gathering information from all sources… front line employees like meter and line departments, account executives, community relations managers, C&LM employees, officers and managers involved in external organizations and customer focusgroups, etc. • Many Goals were aligned between CS and Operations

12. Assess resource adequacy in customer contact areas • Even in the toughest times, layoffs were minimized among customer contact groups and resources were dedicated first to customer contact areas whenever possible. • Utilized IT to help automate many functions to reduce FTEs and improve service. This took pressure off for further reductions. • Established an Account Executive program for large power customers at a time we could least afford to do so.

13. Allow time and resources for supervisor oversight • In customer service, we did tons of “soft skill” training to improve how we treat our customers, even in the tough financial times • Training took priority over other things • Short term pain for long term gain • We were one of the first utilities to do Quality Call Monitoring, and use this as one piece of the employee’s performance appraisal

14. Manage By Walking Around (MBWA) • Officers, directors, managers and supervisors were expected to have regular face to face meetings with employees. • Suggestion boxes were used. • On-line tools used to bring ideas directly to senior management • Everyone is on a first name basis at all levels of the company

15. Align the organization around the customer experience • Goals concerning customer satisfaction were shared by employees in operations, and corporate center • Teamwork during power outages was a given. Employees volunteered to help before they had to be asked. • Lawyers, secretaries, corp center staff all helped take phone calls during large storms

16. Look at complaints as opportunities • A customer complaint is considered food for ideas on how we can get better • Not all complaints are valid, but common themes can be found easily and used to pursue system or process improvements • Employee complaints were also a valuable source of ideas for improvement

17. Improve employee recognition programs • SPOT, WIT, EDC all used at various times over the years. • Try to keep it fresh and use different tactics over time • Listened to employees ideas on what was most important to them

18. Train everyone on service leadership • A common slogan we’ve used for years is “If you’re not serving the customer, you better be serving someone who is.” • Internal customers are just as important as external ones • From day 1 of new employee orientation, people learned about safety and customer service as our top priorities.

19. Where does NU go from here? • New VP and Chief Customer Officer Johnny Magwood hired in April • Implement the Chip Bell recommendations • Make Customer Loyalty sustainable • Make it part of our culture, just like safety • Have “customers” on our minds with every decision we make • Provide the resources needed to exceed customer expectations • Look at every customer contact as an opportunity to make a positive experience

20. Remember… “Good” Service isn’t good enough!