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Promoting customer engagement: A new trend in utility regulation
Author(s) -
Hahn Robert,
Metcalfe Robert,
Rundhammer Florian
Publication year - 2020
Publication title -
regulation and governance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.417
H-Index - 45
eISSN - 1748-5991
pISSN - 1748-5983
DOI - 10.1111/rego.12182
Subject(s) - customer engagement , incentive , process (computing) , business , regulator , customer retention , marketing , process management , public engagement , industrial organization , public relations , computer science , economics , microeconomics , political science , service quality , biochemistry , chemistry , world wide web , gene , social media , service (business) , operating system
This paper traces a new development in regulation that encourages utilities to engage more directly with their customers. We make four contributions: First, we perform a comprehensive analysis of how regulators are using customer engagement, and offer a simple model for understanding different customer engagement initiatives. Second, we review assessments of customer engagement. We find that there are no quantitative, empirically robust assessments of the effectiveness of customer engagement as a regulatory tool. Third, we develop two detailed case studies of an energy regulator and a water regulator that are in the forefront of customer engagement efforts. We find that there is no direct link between the engagement strategy used and the economic incentives received by a firm. Finally, we propose a framework for improving the customer engagement process. The new framework relies on microeconomics, modern tools of program evaluation, and supplying the regulated firm with direct incentives to engage with the customer.