Customer Relationship Management (CRM) is the strategy and tactics deployed to maximize the lifetime value of the customer asset - customer equity. CRM is defined by as "an ecosystem that must drive bottom-line revenue by applying the right CRM treatments, to the right customer segment, at the right time."

In other businesses, the drivers to maximize customer equity center on improving your acquisition rate, retention rate, and add-on sales rate. For a utility, however, the focus is to drive cost out of the process without sacrificing the effective and efficient service that customers demand. That's because the regulated nature of the utility business provides little marginal opportunity to impact or benefit from acquisition, retention, and add-on opportunities that other businesses have - the benefit of marginal reduced cost exceeds the benefit of marginal revenue.

Utilities are Different
Consider 1-800-FLOWERS. When a person calls, it's a selling opportunity. The company wants to sell, they want to "up sell," and they want the customer to call again. It pays to extend call times and call frequency.

With a utility, it's the opposite. While a utility wants to provide the customer with a positive and consistent experience -- as well as using the opportunity appropriately -- the best call is the one that never gets made. The next best call is the one that ends the fastest, with an appropriate response so the customer does not need to call again.

Essentials for Utility CRM
This fundamental difference in business drivers and the resulting business focus demonstrates the need to consider the key differences between utilities and other businesses. For utilities to deliver superior customer relationship management, they need