Using Adversity to Build Consumer SatisfactionHow Co-ops Overcame Recession, Rising Rates,

and Churn to Achieve High ACSI Scores

National Web ConferenceOctober 28, 2010

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Tim SullivanDirector of Commercial and Industrial

Business Development

Touchstone Energy Cooperatives

Today’s Moderator

• Hear from the CEO of Wright Hennepin Electric, the highest scoring ACSI co-op in 2009

• Hear from two senior staff members from CoServ Electric about how they improved their ACSI scores amid tremendously challenging circumstances

• Learn about brand programs and tools to help you raise your game

• Take your questions

Agenda

Mark VogtCEO

Wright Hennepin Cooperative

Electric Association

Speaker

October 28, 2010

Improving the ACSI ScoreA case study from

Wright-Hennepin Cooperative Electric Association

About WHAbout WH

• One of 40 co-ops in Minnesota– One of 4 “metro ring”

co-ops surrounding Twin Cities

• 40,000+ members

• Residential customers = 60%

• A mixture of suburban and rural members intermixed with IOU service territory

What gets What gets measured,measured,gets done!gets done!

ACSI ResultsACSI Results

81818181

8585858586868686

84848484

8888888889898989 89898989

91919191 9191919190909090

2005200520052005 2006200620062006 2007200720072007 2008200820082008 'April'April'April'April

09090909

'June'June'June'June

09090909

'Sept.'Sept.'Sept.'Sept.

09090909

'Dec.'Dec.'Dec.'Dec.

09090909

AprilAprilAprilApril JuneJuneJuneJune

Findings Findings that have that have improved improved our scoreour score

WH Member ExpectationsWH Member Expectations• The consistent message

from ACSI surveys:

COMPETITIVENESSCOMPETITIVENESSCOMPETITIVENESSCOMPETITIVENESSCOMPETITIVENESSCOMPETITIVENESSCOMPETITIVENESSCOMPETITIVENESS

THENTHENTHENTHENTHENTHENTHENTHEN

RELIABILITYRELIABILITYRELIABILITYRELIABILITYRELIABILITYRELIABILITYRELIABILITYRELIABILITY

• Everything else is secondary by alarge margin!

ACSI finding on ACSI finding on ““ Perceived ValuePerceived Value ””

““If prices are perceived If prices are perceived more favorably, then more favorably, then

satisfaction satisfaction will tend to improve;will tend to improve;

Dissatisfaction occurs Dissatisfaction occurs whenwhen

perceived value perceived value perceptions perceptions decline.decline.””

Average Bill vs. “Competitive Rate” Score

7

7.5

8

8.5

9

9.5

10

Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010

AverageRate

SatisfactionScore

75

80

85

90

95

100

105

110

115

120

125

AverageMonthlyBill

Average Bill

Rate Score

Average Bill vs. “Competitive Rate” Score

7

7.5

8

8.5

9

9.5

10

Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010

AverageRate

SatisfactionScore

75

80

85

90

95

100

105

110

115

120

125

AverageMonthlyBill

Average Bill

Rate Score

When bills go up,

scores go down

Average Bill vs. “Competitive Rate” Score

7

7.5

8

8.5

9

9.5

10

Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010

AverageRate

SatisfactionScore

75

80

85

90

95

100

105

110

115

120

125

AverageMonthlyBill

Average Bill

Rate Score

When bills go down, scores go

up

Average price of residential electricity in 2009

Competitive electric rates

September 2010September 2010

Response time YTD (August)

1:21:401:24:35

1:17:11

1:08:47

1:00:46

1:12:18

1:01:30

0:42:06

0:00:00

0:14:24

0:28:48

0:43:12

0:57:36

1:12:00

1:26:24

2002

2003

2004

2005

2006

2007

2008

2009

What gets What gets measured,measured,gets done!gets done!

Key measures that drive WH’s ACSI Score

• “WH’s rates shall be within 1% of Xcel Energy”• “Average outage time will be 10% better than the

previous 5 year average”• “Our diversified businesses shall triple margins

to $ 3 million by 2011 to help offset the electric rate.”

• “WH shall be within the top 10% of Touchstone Energy scores”

• “Off Peak sales shall increase by 10% (over previous year’s all time high)”

Specific Actions/AccomplishmentsSpecific Actions/Accomplishmentsresulting from WHresulting from WH ’’s ACSI Focuss ACSI Focus

• Renegotiated power contract• System wide automated meter reading

• Home security, electric contractor and commercial on site generator business

• Bonus program payable up to 5% of total payroll

• Early retirement program• Focus on customer touch points

Designing Programs and Services

Based on What Customers Want

• Some examples:– Electric bill– MyMeter– Outage

communications

Specific Actions/Results Specific Actions/Results from WHfrom WH ’’s ACSI Focuss ACSI Focus

• Renegotiated power contract• System wide automated meter reading• Home security, electric contractor and

commercial on site generator business• Bonus program payable up to 5% of total payroll• Early retirement program• Focus on customer touch points• Frequent communications• Fun along the way

CelebrateCelebrate

ACSI ResultsACSI Results

81818181

8585858586868686

84848484

8888888889898989 89898989

91919191 9191919190909090

2005200520052005 2006200620062006 2007200720072007 2008200820082008 'April'April'April'April

09090909

'June'June'June'June

09090909

'Sept.'Sept.'Sept.'Sept.

09090909

'Dec.'Dec.'Dec.'Dec.

09090909

AprilAprilAprilApril JuneJuneJuneJune

How Wright-Hennepin Rankswith Other Service Industries

90

79

74 7572

66 66

83

73

50

54

58

62

66

70

74

78

82

86

90

94

Wri

ght-

Hen

nepi

n

All

Ele

ctri

cC

oope

rati

ves

All

Ele

ctri

cU

tilit

ies

Fix

ed L

ine

Tel

ecom

Wir

eles

sT

elec

om

Air

lines

Subs

crip

tion

TV

Exp

ress

Del

iver

y

Hos

pita

ls

Speakers

Bruce BoutilierDirector of Customer Operations

CoServ Electric

Kat GloriaManager of Marketing and Communications

CoServ Electric

Using Adversity to Build Consumer Satisfaction

Who is CoServ? • Serves 155,000 meters/130,000+ members • Own a natural gas utility serving 69,000

customers• Majority of our demographic: Age 35-54• Average home value $199,166.66*

• Average income $ 77,374 *

• 95 percent have Internet access• 92 percent Residential• 8 percent C&I

* Average for cities of Denton, Frisco and McKinney Texas

Historic Growth

ACSI Historical Scores

Rising TSE Scores

Importance of Training

• Five weeks in the classroom

• Two weeks of on-the-floor mentoring

• Three weeks on the bridge

Understand Why They Call

• Call Types – Evaluate why they are calling

� What policies might be holding back member satisfaction?

Know Your Call Types – Tracking Volume

Decreasing Hold Time

• Stats and Verbatims - What did we learn?� Didn’t feel one pay location was convenient

� Structured a deal with Fidelity Express

TSE Member Survey

• Members didn’t feel we created value as a co-op. In response, we:

� Contributed more money to agencies

� Mandatory message – energy saving tips/Web site

� Rebate Programs� HVAC

� Energy Audits� Solar Energy

� Waived deposits if signed up for auto bank draft

� Recognized Web site improvement needed

Created Member Value

CSR QA is Critical

• Review errors

• Service observe� To ensure that we are confirming every call, easy to

work with, and do what we said we would

TSE Survey - QA Committee

• Review verbatims to identify areas to improve

• Embrace criticism as opportunity

• Use as training tool with CSRs and other employees

• Contact members when appropriate

TSE Scores – Call Center Driven

TSE Scores – Call Center Driven

Results Count

• Outperformed the last six years

• Meter count continues to grow

Build satisfaction using coserv.com

and TOGETHERWESAVE

October 2009

Previous Visits: 635,500

Previous Visits: 635,500

CoServ.com Visits

An increase of 111,993

2009-2010 Online Account Growth

0

4,000

8,000

12,000

16,000

20,000

24,000

28,000

32,000

36,000

40,000

44,000

48,000

52,000

56,000

60,000

64,000

68,000

1 st Q tr 2 nd Q tr 3 rd Q tr 4 th Q tr 1 st Q tr -1 0 2 nd Q tr -1 0

E -Bill only E -B ill and paper bill O nline Use r Subsc r iptions

TOGETHERWESAVE

Energy Audits

Energy Audit Comparison

Energy Management Brochure

Energy Management Event Signage

Think Green Rebate Program

Think Green Rebate Stats

Residential Rebate Dust Cover

CFL Program

HVAC Tune-up Rebate

Temperature Chart Stats

Weather SmartStats

Weather SmartStats Metrics

Apogee Phase Out Dec/Jan

TOGETHERWESAVE

Co-op Connections Card Rollout

Co-op Connections Card

Connections Card QA

Visits to Connections Card

Co-op Connections Card

Frisco RoughRiders

Texas Co-op Power

Brand Tools to Help You Improve Your ACSI Score

Brand Resources

• The only uniform measure of customer satisfaction for the U.S. economy

• Established in 1994 at the University of Michigan• Measures 225 companies in 45 industries across 10 sectors

– companies measured account for about two-thirds of the U.S. GDP

• A quarterly measure of the national economy’s health.• Touchstone Energy has been a partner since 2002 • Results from surveys published in various media and on the

ACSI website at www.theacsi.org• Built on the premise: “The health of an organization is

best reflected by the satisfaction of its customers.”

ACSI Background

• “The American Customer Satisfaction Index, the definitive benchmark of how buyers feel about what business is selling them . . . . .”

• - New York Times, August 8, 2004

ACSI in the Media

“The American Customer Satisfaction Index, the definitive benchmark of how buyers feel about what business is selling them . . . . .”

- New York Times, August 8, 2004

• Touchstone Energy national score has been a 79 for three straight quarters

• In Q2, Sempra was number one in the industry with an 81• Good news: TSE Cooperatives still score third in the utility

sector and still have a “Cooperative Advantage”• Not so good news: our “Advantage” has shrunk to four

points, half of what it was a year ago• Overall, we’re seeing a compression of scores among

utilities. Gas and gas and electric utilities have moved up• Key reason for our 79: lower scores for “Quality” and

“Value”

Touchstone Energy and the ACSI

70

75

80

85

2008

Q1

2008

Q2

2008

Q3

2008

Q4

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

Industry Average Touchstone Energy

AC

SI

Energy Utilities Industry Average and Touchstone Energy CooperativesTouchstone Energy vs. IOU Average

Perceived Value Lags

Num

ber

of C

oope

rativ

es

Touchstone Energy Cooperatives -Distribution of ACSI Scores, Q3 2010

YTD

Descriptives :

N = 354High = 94Low = 66Mean = 82.44St. Dev. = 4.31

• Common questions: – How do I move an ACSI score from 75 to 81, or from 81

to an 89?– How do I improve reliability in a way that pays off in

member satisfaction? • Key brand resources:

– ACSI resources– Best Practices Knowledgebase– Brand Performance newsletter– Cooperative Difference Research– Balanced Performance Scorecard

How do we improve?

Sample ACSI ads

– Library of best-in-class approaches employed by cooperatives

– Arranged by topic area– Features 48 case studies (5-7 pages),

links, and resources– All objectively measured; statistically

reliable results– Don’t guess: Learn from peers who have

achieved success

Best Practices Knowledgebase

85

• Quarterly newsletter about the ACSI, Best Practices, and performance improvement

• Mailed to cooperative CEOs and brand leaders• Content: strategic performance issues. Offers tools,

ideas, links and resources for improvement• Mailing dates: September, December, March, June• Specific features: ACSI updates, best practice case

studies, Cooperative Difference research findings, columns from brand leaders

Brand Performance Newsletter

TSE ServicesYour Touchstone Energy® Partner

TSE ServicesYour Touchstone Energy® Partner

Cooperative Difference Research

4.0 5.0 6.0 7.0 8.0

EE displays in local co-op office

An energy audit of your home

Energy efficiency workshop

Hearing about EE at annual meeting

Expo with energy efficiency experts

Co-op hosting a booth at local

hardware

On-line access to historical energy use

Monthly report of energy use versus

similar homes in your area

How intested are you in your cooperative offering…?

• Tool to measure strategic performance in a co-op’s big four, mission-critical areas: member satisfaction, safety, reliability, cost

• Available on the Touchstone Energy Interest Area of Cooperative.com

• 14,000 web hits in the first eight months. Single biggest user is CEOs

• Key value for you: benchmarks ACSI scores over three years, also by region, size and density

• Puts member satisfaction into a strategic context for CEOs, senior staff, Boards.

Balanced Performance Scorecard

Benchmark Data

• Building Your Performance Scorecard

• Phase II Development now underway• Being reviewed and vetted by a CEO panel• Will expand website functionality to:

– Provide systems with on-line access to their own scores

– Allow selection and reporting by customized peer groups

– Allow reporting by trend and performance targets with graphics

– Provide additional performance criteria for customized scorecards

Balanced Performance Scorecard

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