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 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 1. Develop a Clear Service Strategy 2. Communicate Expectations 3. Create customer intelligence and scorecard 4. Assess resource adequacy in customer contact areas 5. Allow time and resources for supervisor oversight 6. Manage By Walking Around (MBWA) 7. Align the organization around the customer experience 8. Look at complaints as opportunities 9. Improve employee recognition programs 10. 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 focus groups, 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

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