Utility Automation & Engineering T&D - AVM provides utilities effective vehicle for enrolling customers in LIHEAP

As funding for next year's assistance becomes available, 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 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. 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 can be an effective vehicle for delivering recorded messages to a large number of customers at a lower cost than manual dialing, predictive dialers or direct mail.

With predictive dialers, for instance, line capacity can be tied up by agents leaving messages on machines or reaching the wrong party. Alternatively, AVM solutions offer more 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, notifies them of their possible eligibility for LIHEAP and the benefits of the program. An interactive survey with qualifying questions determines the customer's eligibility and may allow the customer to enroll immediately over the phone.

With AVM, utilities could have the ability to implement LIHEAP campaigns within days, and register results in real time. Because customers can take immediate action and enroll right on the call, response rates can be higher than traditional contact methods. Utilities using AVM have reported program response rates of 5 to 15 percent.

As the vice president of consumer direct strategy at SoundBite, Eric Keough consults with SoundBite's key strategic industries, including automobile finance, on best practices in the design and implementation of customer contact strategies. Keough has more than a decade of marketing experience leading multi-channel contact strategies with emphasis on integrated program launches, inbound/outbound campaigns, loyalty programs, and web channel strategy.

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