Beyond transactions Creating value through customer partnerships in utilities An Economist Intelligence Unit white paper Sponsored by SAP Beyond transactions Creating value through customer partnerships in utilities Preface Beyond transactions: Creating value through customer partnerships in utilities is an Economist Intelligence Unit report sponsored by SAP The Economist Intelligence Unit bears sole responsibility for this report The Economist Intelligence Unit’s editorial team conducted the interviews and wrote the report The findings and views expressed in this report not necessarily reflect the views of the sponsor Dan Armstrong was the editor of the report and Dorian Benkoil as the author Mike Kenny was responsible for layout and design Our thanks are due to all of the executives who responded to the survey October 2009 © Economist Intelligence Unit Limited 2009 Beyond transactions Creating value through customer partnerships in utilities Contents Introduction Key findings Conclusion Appendix 1: Overall survey results Appendix 2: Americas survey results 13 Appendix 3: Asia-Pacific survey results 18 Appendix 4: EMEA survey results 23 © Economist Intelligence Unit Limited 2009 Beyond transactions Creating value through customer partnerships in utilities Introduction A half-century ago, when energy was cheap and conservation rare, electricity consumption grew on average by 9-10% per year Today lower levels of economic growth, higher energy prices, greater conservation and the movement of people to warmer climates have reduced the level of growth to closer to 1% per year.1 As economic activity and the demand for electricity slows, power utilities need to work harder to understand the needs of customers in order to keep revenues and margins high Water utilities have more robust customer demand, but face different customer challenges These include growing public concerns about water quality and supply, more recycling and re-use of water, and the need to raise prices to recover higher costs in an environment which is often heavily regulated Both types of utilities face pressure from regulators and consumers pressing for “green” alternatives that decrease carbon emissions Utilities customers have more choice than ever, brought on by deregulation, government mandates, market forces, and new transparency in information and pricing To survive and thrive, utilities companies need to deepen their understanding of existing customers to understand which are most valuable and how best to retain them They must also develop a brand identity to differentiate their products from commodities About the survey Rate of Electricity Demand Growth Slows, Following the Historical Trend, Energy Information Administration/ Annual Energy Outlook 2009, US Government Printing Office, Washington DC, 2009 In a survey completed in September 2009, the Economist Intelligence Unit surveyed 105 utilities industry executives on the challenges of getting customer-facing departments to work together more consistently and effectively Respondents spanned the globe, with 28% from the Americas, 24% from the Asia-Pacific region and the rest from EMEA Electric power utilities made up the largest group of respondents, with 57%, followed by gas with 38%, and water, sewage and other types of utilities comprising the remainder One third of respondents had annual revenues of over $10bn, and average annual revenues of respondents were approximately $5bn © Economist Intelligence Unit Limited 2009 Beyond transactions Creating value through customer partnerships in utilities Key findings Building the brand While most consumers know the name of their utility provider, they may not have a sense of its brand—the image that differentiates it from other firms in the industry Thirty-two percent of respondents to the Economist Intelligence Unit survey acknowledge that giving customers a consistent picture of the organisation is an activity most in need of improvement Respondents also admit that they have not sufficiently differentiated themselves from other utilities Building a consistent brand is critical in an era when customers know exactly how much utility services cost, can compare the costs of different providers on online sites, and can switch providers at will Mining customer information One of the best ways to learn about customers and their needs is by building longer-term relationships with them Sixty percent of survey respondents say they have strengthened relationships with customers over the past year and 56% say they are more engaged in developing products or services collaboratively with them Yet respondents also cite building longer-term relationships with customers as an activity in need of improvement at their organisation (33%), followed by giving customers a consistent picture of the organisation (32%), and gathering customer intelligence in the course of providing service (25%) Customer information will be wasted if it is not shared across customer-facing departments Nearly 80% of the utilities companies surveyed acknowledge less-than-full integration of information across marketing, sales and customer service in each of eight categories Which of your organisation’s activities are most in need of improvement? (% respondents) Building long-term relationships 33 Providing a consistent customer experience 32 Gathering customer intelligence in the course of providing service 25 Targeting the right customers in order to close a high percentage of prospects 24 Segmenting and profiling customers 21 Source: Economist Intelligence Unit survey, September 2009 © Economist Intelligence Unit Limited 2009 Beyond transactions Creating value through customer partnerships in utilities Improving online relationships In an era where price comparisons are easy to find on the internet, utilities are striving to provide customers with a richer online experience This will not only enhance the brand and increase the perception of accessibility and openness, but can also reduce the cost of sales by making interactions more efficient Utilities industry executives report empowering customers by improving online and self-service product support tools; improving usability, search and navigation on customer-facing websites, and building or supporting online customer communities Forty-two percent of respondents also say they are developing a social media strategy Commoditisation conundrum Survey respondents not see pricing as a way to differentiate their products A plurality says that they lack pricing flexibility compared to their competitors, and seven out of ten suggest that pricing flexibility is not necessary, since price is not the most important concern for their customers anyway These results are not surprising in an often regulated and frequently oligopolistic industry Without the ability to distinguish their products based on price, companies need to find other differentiators Forty-eight percent of respondents admit their biggest challenge is that “customers see our products and services as commodities,” and 55% say customers view their organisation’s products and services more as commodities than five years ago Nevertheless, only about a quarter of survey respondents say they are good at using customer feedback to differentiate their offerings In other words, nearly threequarters of utilities companies—whose toughest challenge is perceived commoditisation of their products and services—do a poor job of using customer feedback to improve their performance in this area What are your biggest challenge in acquiring customers? (% respondents) Customers see our products and services as commodities 48 Regulatory restrictions in providing services 30 Large infrastructure costs in fulfilling new orders 24 Perceived cost of switching (base is overly entrenched) 19 We have not sufficiently differentiated our brand 18 Source: Economist Intelligence Unit survey, September 2009 © Economist Intelligence Unit Limited 2009 Beyond transactions Creating value through customer partnerships in utilities How the regions differ The survey of utilities executives spanned three regions: the Americas, Asia-Pacific and EMEA Each faces its own challenges The Americas Of the three regions, the Americas has the farthest to go in partnering with customers Most firms in the Americas have neither used customer feedback to differentiate offerings nor developed products collaboratively with customers The Americas is less focused on customer service, and most focused on operational excellence, and respondents in the Americas tend to say that margins are thin and pricing flexibility minimal Asia-Pacific Asia-Pacific has made the most progress in partnering with customers It is the antithesis image of the Americas: most focused on customer service and the least on operational excellence Asia-Pacific firms are most likely to say that customer service, sales and marketing are well integrated in almost every category, and most emphatic in stressing the need to develop and share a unified picture of customers EMEA Companies in all three regions cite reliability above all other factors in persuading potential customers to buy But after reliability, companies in the EMEA region have the strongest focus on flexible product offerings This differentiator is higher ranked in EMEA than elsewhere © Economist Intelligence Unit Limited 2009 Beyond transactions Creating value through customer partnerships in utilities Conclusion A recent Harvard Business Review essay said, “Electricity and gas customers—aided by the utilities themselves—are reducing consumption Sales are already flattening and they’ll only fall faster as governments put in place more incentives to control greenhouse gas emissions.”2 In this low-demand environment, utilities will need to reach out to customers to find things that they will pay for—service, reliability, shared values—to maintain margins and keep them from switching providers That nearly half (49%) cites operational excellence as their core strength (rather than customer service or product innovation) is no surprise in a capital-intensive industry with long lead times and a focus on reliability But there are limits to the customer benefits of operational improvements, especially when these improvements are not informed by customer intelligence The biggest benefits may come from making better use of customer information, gathering it and sharing it across sales, marketing and customer service Not only will companies be able to act on the information more quickly, they may be able to persuade regulators to provide more flexibility To achieve the goals of information gathering and integration, utilities should: l Integrate marketing, sales and service activities, sharing information among customer-facing departments, achieving economies and lowering the cost of sales l Increase their understanding of customers, and their ability to market to them, based on their lifetime value l Build a consistent brand image, and reinforce it in dealings with the customer Fix Utilities Before They Need a Rescue, Peter Fox-Penner, Harvard Business Review, JulyAugust 2009 Customers take utilities for granted Water flows from a tap; electricity comes from an outlet; waste disappears with the press of a button But modern life would end without the services provided by utilities Despite their underlying value, most utility companies are only noticed by customers when there is a problem To be noticed by customers, management needs to move beyond the operational mindset that has historically dominated the industry Utilities need to better understand what customers value, share this information among customer-facing functions, and hammer home this value at every opportunity More than the organisation itself is at stake: Healthy and profitable utilities are necessary for a growing economy as well as a clean environment © Economist Intelligence Unit Limited 2009 Appendix Overall survey results Beyond transactions Creating value through customer partnerships in utilities Appendix: Overall survey results In your view, which of the following best represents the core strength of your overall business? Select only one (% respondents) Operational excellence: Creating highly efficient processes 49 Customer service: Providing superior service to clients 36 Product innovation: First to market with groundbreaking new products or services 12 Other Each of the organisation’s customer-facing departments influences the customer via different channels For each of the processes below, how closely your marketing, sales and customer service units work together? Please rate on a scale of to (% respondents) No coordination; units are completely separate Ad hoc coordination; not systematic or consistent Some procedures established, but not consistently followed Procedures established, regular interaction Broad, systematic and consistent integration of information and strategies Don’t know Generating, tracking and measuring leads 10 28 32 17 10 Developing and launching new products 13 20 38 15 11 Planning and executing campaigns 10 23 41 16 Analysing and segmenting customers 10 27 28 19 11 Gauging customer satisfaction 28 30 24 Measuring effectiveness of processes 12 35 33 13 Responding to customer demands or complaints 12 16 42 25 Incorporating customer feedback into products/services 18 24 32 14 Other 26 20 16 40 47 60 80 100 Economist Intelligence Unit 2009 Appendix Overall survey results Beyond transactions Creating value through customer partnerships in utilities Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In chosing to business with my organisation, price is the single most important factor most customers consider 31 65 Compared to our competitors, my organisation’s customers are more loyal 52 27 21 My organisation has an accurate way to estimate the lifetime value of customers 41 42 17 My organisation prioritises sales and marketing resources based on each customer’s lifetime value 34 40 26 We are currently developing a social media strategy 42 34 25 My organisation has more flexibility than its competitors in pricing its products 36 48 17 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 58 27 15 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 51 36 13 Customers view my organisation’s products and services more as commodities now than five years ago 55 27 17 Our margins are higher than the margins of most of our competitors 27 46 20 40 60 In your view, which of your organisation’s activities are most in need of improvement? Select up to four (% respondents) 27 80 100 Which of the following would provide the biggest benefits in integrating your organisation’s marketing, sales and service activities? Select up to three (% respondents) Building long-term relationships 33 Providing a consistent customer experience Developing and sharing a detailed picture of customers, behaviour and preferences 31 32 Gathering customer intelligence in the course of providing service Presenting customers with a consistent picture of the organisation 30 25 Targeting the right customers in order to close a high percentage of prospects 24 30 Segmenting and profiling customers 21 Cross-selling or upselling customers 20 Ensuring that customer complaints are resolved quickly 20 Measuring customer satisfaction and loyalty 19 Involving customers product/service development (eg, co-creation) 18 Generating qualified leads 17 Creating effective collateral 15 Efficiently acquiring customers (eg, reducing the cost of sales) 14 Measuring/optimising effectiveness of marketing and promotional campaigns 11 Maximising the number of repeat sales 11 Making each unit aware of how the others have interacted with a given customer Prioritising resources directed towards customers by total value over life of customer 28 Helping each function find and act on ways to support the others 26 Integrating customer tracking from lead through post-sales service 25 Establishing common definitions, assumptions and data 18 Measuring the probability that leads will turn into sales, and using these scores to guide sales Our company sees no need to integrate our marketing, sales and service activities Other Don’t know/Not applicable 12 Other Don’t know Economist Intelligence Unit 2009 Appendix Americas survey results Beyond transactions Creating value through customer partnerships in utilities Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three (% respondents) Given the trend towards increasing customer choice among differentiated utilities services, which factors has your organisation best presented to customers to influence purchase decisions? Select up to four (% respondents) Global economic downturn 62 Emergence of new competitors Reliability 38 62 Finding access to credit/capital Customer service 34 45 Changing customer requirements Environmental “green” concerns 24 41 Significant demand shifts for our products/services Overall customer experience 21 34 Disruptive technology developments Price 17 31 Emergence of new markets for our products and services Ability to scale quickly to meet demand spikes 14 24 Focusing on sustainability efforts Safety 14 24 Accessing key components or resources through our supply chain Flexibility in changing offerings 21 Other Variable pricing (based on demand, season, etc.) 17 Don’t know Source of power generation (hydroelectric, natural gas, wind, solar, etc.) 14 Convenience 10 Other In which of the following ways does your organisation empower its customers? Select all that apply Don’t know (% respondents) Improving usability, search and navigation of customer-facing websites 45 Improving online or self-service product support tools 41 Building or supporting online customer communities 28 How well has your organisation made use of customer feedback to differentiate utilities offerings and make them appear less commoditised? (% respondents) Making prices and sales terms more transparent for easy comparability 28 Investing in self-service tools across multiple channels (eg, web, mobile devices, e-mail, point of sale) 24 Other Don’t know 15 Seamlessly Very well 14 Somewhat 69 Poorly 10 Not at all Economist Intelligence Unit 2009 Appendix Americas survey results Beyond transactions Creating value through customer partnerships in utilities Which of the following represents your institution’s biggest challenge in acquiring customers? Select up to two In which region are you personally based? (% respondents) North America Customers see our products and services as commodities Latin America (% respondents) 86 14 45 Asia-Pacific Regulatory restrictions in providing services 38 Large infrastructure costs in fulfilling new orders 24 Perceived cost of switching (base is overly entrenched) 17 We have not sufficiently differentiated our brand 14 Eastern Europe Western Europe Middle East and Africa Too difficult to compile and analyse leads from different sources Other Which of the following services does your company provide? Don’t know (% respondents) Power 62 Gas 28 Sewage 10 Water Other 17 Which of the following best describes your title? (% respondents) Board member CEO/President/Managing director 10 CFO/Treasurer/Comptroller CIO/Technology director Other C-level executive SVP/VP/Director 17 Head of Business Unit Head of Department 10 Manager 38 Other 10 16 Economist Intelligence Unit 2009 Appendix Americas survey results Beyond transactions Creating value through customer partnerships in utilities Who are your organisation’s primary customers? What are your organisation’s global annual revenues in US dollars? (% respondents) (% respondents) Business-to-business 39 $500m or less 34 $500m to $1bn 24 $1bn to $5bn Consumer/retail 14 Both 46 $5bn to $10bn $10bn or more 28 Which perspective—consumer/retail or business-to-business—are you sharing in this survey? What are your main functional roles? Please choose no more than three functions (% respondents) (% respondents) Strategy and business development 38 General management Consumer/retail 58 Business-to-business 42 31 Operations and production 28 Finance 21 Customer service 17 Risk 14 Sales 10 R&D 10 Human resources 10 Marketing Procurement IT Legal Supply-chain management Information and research Other 17 Economist Intelligence Unit 2009 Appendix Asia-Pacific survey results Beyond transactions Creating value through customer partnerships in utilities Appendix: Asia-Pacific survey results In your view, which of the following best represents the core strength of your overall business? Select only one (% respondents) Customer service: Providing superior service to clients 44 Operational excellence: Creating highly efficient processes 40 Product innovation: First to market with groundbreaking new products or services 12 Other Each of the organisation’s customer-facing departments influences the customer via different channels For each of the processes below, how closely your marketing, sales and customer service units work together? Please rate on a scale of to (% respondents) No coordination; units are completely separate Ad hoc coordination; not systematic or consistent Some procedures established, but not consistently followed Procedures established, regular interaction Broad, systematic and consistent integration of information and strategies Don’t know Generating, tracking and measuring leads 4 21 50 13 Developing and launching new products 4 17 46 17 13 Planning and executing campaigns 13 54 13 Analysing and segmenting customers 33 29 25 33 25 38 21 50 21 Gauging customer satisfaction 29 Measuring effectiveness of processes 4 33 Responding to customer demands or complaints 4 21 Incorporating customer feedback into products/services 8 21 38 17 Other 18 20 40 20 40 60 40 80 100 Economist Intelligence Unit 2009 Appendix Asia-Pacific survey results Beyond transactions Creating value through customer partnerships in utilities Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In chosing to business with my organisation, price is the single most important factor most customers consider 24 72 Compared to our competitors, my organisation’s customers are more loyal 52 24 24 My organisation has an accurate way to estimate the lifetime value of customers 40 48 12 40 12 My organisation prioritises sales and marketing resources based on each customer’s lifetime value 48 We are currently developing a social media strategy 25 42 33 My organisation has more flexibility than its competitors in pricing its products 36 56 20 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 72 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 60 36 Customers view my organisation’s products and services more as commodities now than five years ago 52 32 16 56 16 Our margins are higher than the margins of most of our competitors 28 20 40 60 In your view, which of your organisation’s activities are most in need of improvement? Select up to four (% respondents) 80 100 Which of the following would provide the biggest benefits in integrating your organisation’s marketing, sales and service activities? Select up to three (% respondents) Building long-term relationships 52 Providing a consistent customer experience Developing and sharing a detailed picture of customers, behaviour and preferences 40 36 Targeting the right customers in order to close a high percentage of prospects Helping each function find and act on ways to support the others 32 32 Cross-selling or upselling customers 28 Segmenting and profiling customers 24 Ensuring that customer complaints are resolved quickly 24 Gathering customer intelligence in the course of providing service 24 Generating qualified leads 16 Creating effective collateral 12 Measuring/optimising effectiveness of marketing and promotional campaigns 12 Measuring customer satisfaction and loyalty 12 Maximising the number of repeat sales Efficiently acquiring customers (eg, reducing the cost of sales) Involving customers product/service development (eg, co-creation) Prioritising resources directed towards customers by total value over life of customer 24 Establishing common definitions, assumptions and data 20 Integrating customer tracking from lead through post-sales service 20 Making each unit aware of how the others have interacted with a given customer 20 Measuring the probability that leads will turn into sales, and using these scores to guide sales 20 Presenting customers with a consistent picture of the organisation 16 Our company sees no need to integrate our marketing, sales and service activities 12 Other Don’t know/Not applicable Other Don’t know 19 Economist Intelligence Unit 2009 Appendix Asia-Pacific survey results Beyond transactions Creating value through customer partnerships in utilities Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three (% respondents) Given the trend towards increasing customer choice among differentiated utilities services, which factors has your organisation best presented to customers to influence purchase decisions? Select up to four (% respondents) Global economic downturn 68 Focusing on sustainability efforts Reliability 36 80 Significant demand shifts for our products/services Customer service 32 52 Emergence of new competitors Safety 28 44 Finding access to credit/capital Environmental “green” concerns 24 36 Disruptive technology developments Price 16 32 Accessing key components or resources through our supply chain Overall customer experience 16 32 Emergence of new markets for our products and services Ability to scale quickly to meet demand spikes 20 Changing customer requirements Variable pricing (based on demand, season, etc.) 16 Other Flexibility in changing offerings 16 Don’t know Source of power generation (hydroelectric, natural gas, wind, solar, etc.) 16 Convenience Other In which of the following ways does your organisation empower its customers? Select all that apply Don’t know (% respondents) Making prices and sales terms more transparent for easy comparability 40 Building or supporting online customer communities 36 Investing in self-service tools across multiple channels (eg, web, mobile devices, e-mail, point of sale) How well has your organisation made use of customer feedback to differentiate utilities offerings and make them appear less commoditised? (% respondents) 36 Improving online or self-service product support tools 36 Improving usability, search and navigation of customer-facing websites 24 Other Don’t know 12 20 Seamlessly Very well 32 Somewhat 56 Poorly Not at all Economist Intelligence Unit 2009 Appendix Asia-Pacific survey results Beyond transactions Creating value through customer partnerships in utilities Which of the following represents your institution’s biggest challenge in acquiring customers? Select up to two In which region are you personally based? (% respondents) Asia-Pacific Regulatory restrictions in providing services Latin America (% respondents) 100 40 North America Customers see our products and services as commodities 32 Eastern Europe Large infrastructure costs in fulfilling new orders 32 Perceived cost of switching (base is overly entrenched) 28 We have not sufficiently differentiated our brand 24 Western Europe Middle East and Africa Too difficult to compile and analyse leads from different sources 12 Other Don’t know Which of the following services does your company provide? (% respondents) Power 52 Gas 24 Water 12 Sewage Other 32 Which of the following best describes your title? (% respondents) Board member CEO/President/Managing director 16 CFO/Treasurer/Comptroller CIO/Technology director Other C-level executive SVP/VP/Director 12 Head of Business Unit Head of Department 16 Manager 16 Other 12 21 Economist Intelligence Unit 2009 Appendix Asia-Pacific survey results Beyond transactions Creating value through customer partnerships in utilities Who are your organisation’s primary customers? What are your organisation’s global annual revenues in US dollars? (% respondents) (% respondents) Business-to-business 60 $500m or less 40 $500m to $1bn 24 $1bn to $5bn Consumer/retail 16 Both 24 12 $5bn to $10bn $10bn or more 20 Which perspective—consumer/retail or business-to-business—are you sharing in this survey? What are your main functional roles? Please choose no more than three functions (% respondents) (% respondents) General management 36 Strategy and business development Consumer/retail 80 Business-to-business 20 36 Operations and production 32 IT 24 Finance 20 Customer service 12 Marketing Procurement Human resources Risk Sales R&D Legal Supply-chain management Information and research Other 22 Economist Intelligence Unit 2009 Appendix EMEA survey results Beyond transactions Creating value through customer partnerships in utilities Appendix: Europe Middle East and Africa survey results In your view, which of the following best represents the core strength of your overall business? Select only one (% respondents) Operational excellence: Creating highly efficient processes 47 Customer service: Providing superior service to clients 31 Product innovation: First to market with groundbreaking new products or services 18 Other Each of the organisation’s customer-facing departments influences the customer via different channels For each of the processes below, how closely your marketing, sales and customer service units work together? Please rate on a scale of to (% respondents) No coordination; units are completely separate Ad hoc coordination; not systematic or consistent Some procedures established, but not consistently followed Procedures established, regular interaction Broad, systematic and consistent integration of information and strategies Don’t know Generating, tracking and measuring leads 10 35 29 16 Developing and launching new products 18 16 49 14 16 Planning and executing campaigns 12 26 40 Analysing and segmenting customers 14 26 30 14 12 Gauging customer satisfaction 10 35 29 18 Measuring effectiveness of processes 14 41 27 Responding to customer demands or complaints 14 12 47 24 Incorporating customer feedback into products/services 26 28 30 10 Other 14 23 14 20 14 40 14 43 60 80 100 Economist Intelligence Unit 2009 Appendix EMEA survey results Beyond transactions Creating value through customer partnerships in utilities Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In chosing to business with my organisation, price is the single most important factor most customers consider 33 63 Compared to our competitors, my organisation’s customers are more loyal 46 32 22 43 22 My organisation has an accurate way to estimate the lifetime value of customers 35 My organisation prioritises sales and marketing resources based on each customer’s lifetime value 25 39 35 We are currently developing a social media strategy 47 31 22 47 22 My organisation has more flexibility than its competitors in pricing its products 31 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 59 24 18 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 55 35 10 Customers view my organisation’s products and services more as commodities now than five years ago 59 29 12 Our margins are higher than the margins of most of our competitors 24 43 20 40 60 In your view, which of your organisation’s activities are most in need of improvement? Select up to four (% respondents) 33 80 100 Which of the following would provide the biggest benefits in integrating your organisation’s marketing, sales and service activities? Select up to three (% respondents) Providing a consistent customer experience 33 Building long-term relationships Making each unit aware of how the others have interacted with a given customer 35 31 Gathering customer intelligence in the course of providing service Presenting customers with a consistent picture of the organisation 33 27 Integrating customer tracking from lead through post-sales service Segmenting and profiling customers 31 22 Targeting the right customers in order to close a high percentage of prospects 22 31 Cross-selling or upselling customers 22 Ensuring that customer complaints are resolved quickly 20 Measuring customer satisfaction and loyalty 20 Involving customers product/service development (eg, co-creation) 20 Creating effective collateral 18 Generating qualified leads 16 Maximising the number of repeat sales 16 Efficiently acquiring customers (eg, reducing the cost of sales) 16 Measuring/optimising effectiveness of marketing and promotional campaigns 12 Prioritising resources directed towards customers by total value over life of customer Developing and sharing a detailed picture of customers, behaviour and preferences 27 Helping each function find and act on ways to support the others 24 Establishing common definitions, assumptions and data 20 Measuring the probability that leads will turn into sales, and using these scores to guide sales Our company sees no need to integrate our marketing, sales and service activities Other Don’t know/Not applicable 12 Other Don’t know 24 Economist Intelligence Unit 2009 Appendix EMEA survey results Beyond transactions Creating value through customer partnerships in utilities Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three (% respondents) Given the trend towards increasing customer choice among differentiated utilities services, which factors has your organisation best presented to customers to influence purchase decisions? Select up to four (% respondents) Global economic downturn 65 Significant demand shifts for our products/services Reliability 29 59 Changing customer requirements Flexibility in changing offerings 25 41 Finding access to credit/capital Environmental “green” concerns 24 37 Focusing on sustainability efforts Price 22 33 Disruptive technology developments Customer service 16 33 Emergence of new markets for our products and services Source of power generation (hydroelectric, natural gas, wind, solar, etc.) 12 22 Emergence of new competitors Variable pricing (based on demand, season, etc.) 18 Accessing key components or resources through our supply chain Safety 18 Other Convenience 10 18 Don’t know Overall customer experience 16 Ability to scale quickly to meet demand spikes 14 Other In which of the following ways does your organisation empower its customers? Select all that apply Don’t know (% respondents) Improving usability, search and navigation of customer-facing websites 41 Making prices and sales terms more transparent for easy comparability 41 Improving online or self-service product support tools 37 How well has your organisation made use of customer feedback to differentiate utilities offerings and make them appear less commoditised? (% respondents) Investing in self-service tools across multiple channels (eg, web, mobile devices, e-mail, point of sale) 33 Building or supporting online customer communities 24 Other Don’t know 10 25 Seamlessly Very well 27 Somewhat 51 Poorly 16 Not at all Economist Intelligence Unit 2009 Appendix EMEA survey results Beyond transactions Creating value through customer partnerships in utilities Which of the following represents your institution’s biggest challenge in acquiring customers? Select up to two In which region are you personally based? (% respondents) Western Europe Customers see our products and services as commodities Eastern Europe (% respondents) 73 18 57 Regulatory restrictions in providing services Middle East and Africa 10 22 Large infrastructure costs in fulfilling new orders 20 We have not sufficiently differentiated our brand 18 Perceived cost of switching (base is overly entrenched) 16 Asia-Pacific Latin America North America Too difficult to compile and analyse leads from different sources Other Which of the following services does your company provide? Don’t know (% respondents) Power 57 Gas 51 Water Sewage Other 45 Which of the following best describes your title? (% respondents) Board member CEO/President/Managing director CFO/Treasurer/Comptroller CIO/Technology director Other C-level executive SVP/VP/Director 10 Head of Business Unit Head of Department 33 Manager 31 Other 26 Economist Intelligence Unit 2009 Appendix EMEA survey results Beyond transactions Creating value through customer partnerships in utilities Who are your organisation’s primary customers? What are your organisation’s global annual revenues in US dollars? (% respondents) (% respondents) Business-to-business 45 $500m or less 16 Consumer/retail $500m to $1bn 10 $1bn to $5bn 16 $5bn to $10bn 14 $10bn or more 43 Both 47 Which perspective—consumer/retail or business-to-business—are you sharing in this survey? What are your main functional roles? Please choose no more than three functions (% respondents) (% respondents) General management 37 Strategy and business development Consumer/retail 73 Business-to-business 27 33 Marketing 16 Finance 14 IT 14 Operations and production 12 Sales 12 Risk R&D Customer service Information and research Human resources Procurement Legal Supply-chain management Other 27 Economist Intelligence Unit 2009 28 Cover image: Shutterstock Whilst every effort has been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd nor the sponsors of this report can accept any responsibility or liability for reliance by any person on this white paper or any of the information, opinions or conclusions set out in the white paper LONDON 26 Red Lion Square London WC1R 4HQ United Kingdom Tel: (44.20) 7576 8000 Fax: (44.20) 7576 8476 E-mail: london@eiu.com NEW YORK 111 West 57th Street New York NY 10019 United States Tel: (1.212) 554 0600 Fax: (1.212) 586 1181/2 E-mail: newyork@eiu.com HONG KONG 6001, Central Plaza 18 Harbour Road Wanchai Hong Kong Tel: (852) 2585 3888 Fax: (852) 2802 7638 E-mail: hongkong@eiu.com [...]... find and act on ways to support the others 32 32 Cross-selling or upselling customers 28 Segmenting and profiling customers 24 Ensuring that customer complaints are resolved quickly 24 Gathering customer intelligence in the course of providing service 24 Generating qualified leads 16 Creating effective collateral 12 Measuring/optimising effectiveness of marketing and promotional campaigns 12 Measuring... long-term relationships Making each unit aware of how the others have interacted with a given customer 35 31 Gathering customer intelligence in the course of providing service Presenting customers with a consistent picture of the organisation 33 27 Integrating customer tracking from lead through post-sales service Segmenting and profiling customers 31 22 Targeting the right customers in order to close a high... Asia-Pacific survey results Beyond transactions Creating value through customer partnerships in utilities Which of the following represents your institution’s biggest challenge in acquiring customers? Select up to two In which region are you personally based? (% respondents) Asia-Pacific Regulatory restrictions in providing services Latin America (% respondents) 100 40 0 North America Customers see our products... complaints 14 12 47 24 4 Incorporating customer feedback into products/services 4 26 28 30 10 2 Other 14 0 23 14 20 14 40 14 43 60 80 100 Economist Intelligence Unit 2009 Appendix 4 EMEA survey results Beyond transactions Creating value through customer partnerships in utilities Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In chosing to do business... course of providing service 21 Segmenting and profiling customers 17 Efficiently acquiring customers (eg, reducing the cost of sales) 17 Ensuring that customer complaints are resolved quickly 17 Creating effective collateral 14 Measuring/optimising effectiveness of marketing and promotional campaigns 10 Cross-selling or upselling customers 10 Maximising the number of repeat sales 7 Making each unit aware... Cross-selling or upselling customers 22 Ensuring that customer complaints are resolved quickly 20 Measuring customer satisfaction and loyalty 20 Involving customers product/service development (eg, co-creation) 20 Creating effective collateral 18 Generating qualified leads 16 Maximising the number of repeat sales 16 Efficiently acquiring customers (eg, reducing the cost of sales) 16 Measuring/optimising... Measuring customer satisfaction and loyalty 12 Maximising the number of repeat sales 8 Efficiently acquiring customers (eg, reducing the cost of sales) 8 Involving customers product/service development (eg, co-creation) 8 Prioritising resources directed towards customers by total value over life of customer 24 Establishing common definitions, assumptions and data 20 Integrating customer tracking from lead through. .. e-mail, point of sale) 31 Building or supporting online customer communities 28 Other 4 Don’t know 10 10 Seamlessly 2 Very well 25 Somewhat 57 Poorly 12 Not at all 4 Economist Intelligence Unit 2009 Appendix 1 Overall survey results Beyond transactions Creating value through customer partnerships in utilities In which region are you personally based? Which of the following represents your institution’s... business development Consumer/retail 80 Business-to-business 20 36 Operations and production 32 IT 24 Finance 20 Customer service 12 Marketing 8 Procurement 8 Human resources 8 Risk 4 Sales 4 R&D 4 Legal 4 Supply-chain management 4 Information and research 0 Other 4 22 Economist Intelligence Unit 2009 Appendix 4 EMEA survey results Beyond transactions Creating value through customer partnerships in utilities. .. results Beyond transactions Creating value through customer partnerships in utilities Which of the following represents your institution’s biggest challenge in acquiring customers? Select up to two In which region are you personally based? (% respondents) Western Europe Customers see our products and services as commodities Eastern Europe (% respondents) 73 18 57 Regulatory restrictions in providing services .. .Beyond transactions Creating value through customer partnerships in utilities Preface Beyond transactions: Creating value through customer partnerships in utilities is an Economist Intelligence... transactions Creating value through customer partnerships in utilities In which region are you personally based? Which of the following represents your institution’s biggest challenge in acquiring customers?... Cross-selling or upselling customers 28 Segmenting and profiling customers 24 Ensuring that customer complaints are resolved quickly 24 Gathering customer intelligence in the course of providing service