Posted: 31st January 2020

Think about this one for a minute: when was the last time you actually talked to your energy, gas or water supplier?

It’s probably been a while? But don’t worry, none of us really get much of an opportunity to connect with our providers anymore.

Apart from exceptional circumstances (burst pipes, cut service and other similar emergencies) it is very unlikely that you’ve received much more than your regular bill or request for meter reading from them. Or maybe you switched supplier through a price comparison site with relatively little contact beyond the scripted conversations of one side or another?

Automation and self-service within this industry has just become so efficient – delivering benefits to customer experience and cost savings – that interpersonal communication has suffered as a result. This may mean that businesses can cut some of the costs associated with staffing customer contact centres, and that customers can rapidly switch tariffs and pay their bills in whatever way they find most efficient, but this efficiency actually has a number of drawbacks – not the least of which is losing the opportunity to hold onto valuable, loyal customers when they are needed more than ever.

A volatile time to be in the business

The twenty-tens saw dozens of energetic, innovative challenger suppliers enter the market, introducing new ideas and new ways of doing a business that is hardly the most glamorous. It’s hard to get people excited about their utility supply, but some of these new businesses have been able to achieve it.

But while the challengers brought new life into the market, raising customer expectations along the way, many of them faltered along the way.

Whether they were not sufficiently resilient, unable to compete on price or simply not hitting the right marks with customers, the simple fact of the matter is that a great many of them have either folded or been absorbed by larger providers in recent years. Since the beginning of 2018, 15 domestic energy suppliers and counting, have gone bust.

And it’s not just challengers struggling. Over the past number of years, customers have been leaving the ‘Big Six’ in droves. More than 1.3 million homes have switched away from them since June 2018.

In December 2019, Peter Earl, Head of Energy at Compare the Market, stated:

"Ofgem urgently need to stem the burst main of supplier failures. Breeze is the 15th domestic supplier to fail since the start of 2018, but without more stringent checks on suppliers there will likely be a further collapse in the near future. With more than one million households affected by supplier failures, Ofgem's proposed improved financial checks and more rigorous testing for existing energy providers cannot be implemented soon enough."

On top of all of this, continuing issues in the rollout of smart meters – meant to improve ease-of-use and improve automation across the board – have left many customers ‘out in the cold’, caught in between full-automation of service delivery and traditional usage reporting.

It’s a volatile time to be in the utilities business, and providers need to stand out from the crowd if they are to be (and remain) successful.

This is even more important now that customers are more likely than ever to simply leave their provider for another instead of offering them the opportunity to keep them onboard.

So, how can current and emerging providers escape the fate of so many challengers before them? The answer might lie in how they interact with their customers.

In this time of innovation and disruption, it might pay to start thinking a bit ‘old school’.

“Why have a conversation when you can just switch?”

Customers today are less likely to share their complaints experience but are much more likely to switch providers or avoid using the firm being complained about. The unprecedented technological disruption we are seeing across both the financial services and utilities marketplace means that it is much easier today for customers to 'vote with their feet' – and it seems that's exactly what they are doing.

Through research for our Complaints Outlook, we found that of all those customers who had an issue with their provider, only 41% of them are still with that same provider, but 86% told us they would be more likely to stay with the business if their complaints were handled effectively.

We also found that prospective customers are actively choosing their provider based on the positive experiences of others, with the resulting sales conversion levels being those that marketing and business development teams can only dream of.

But businesses are struggling to take advantage of this, simply because direct customer-to-provider communication is now so limited and rare. In fact, it is usually only when customers come to complain that they end up talking to a representative of the company, and in such cases, they are usually not thinking the best of the company they are reaching out to. It’s an uphill battle from there, but certainly not impossible to turn complainants around.

Self-service, the ‘smart’ way

Of course, for the benefit of customers and firms, we need to keep finding new and innovative ways to give the end consumer control of the energy supply journey. We’re certainly not advocating for a roll-back to ‘simpler times’ of paper bills and provider-initiated meter reading.

But businesses in this space must recognise there is a limit to how far they can step back from the process, and that by doing so too drastically can leave customers feeling unsatisfied and unheard.

Worse yet, by requiring more and more self-sufficiency, providers may be inadvertently cutting vulnerable customers out of the journey. Customers who live with disabilities that might impact their ability to provide regular meter reads, for example, or who live outside of urban centres, may not be able to enjoy all the benefits that other customers might take for granted.

And so, in this age of smartphone banking and smart meters, there are a few things that your business could be doing a bit differently to ensure your customers really feel valued:

  1. Catch up regularly – now, this doesn’t mean you have to send representatives around to houses, but if you want to remain a part of customers’ lives (and part of their considerations when it comes to their decision to switch away or not), then it is worth providing customers with regular check-ups.
    Forward-looking providers could take cues from some popular brands in other service sectors. For example, companies like Spotify and Giffgaff provide their customers with regular (monthly, quarterly or yearly) updates personalised according to their own user data. This tailoring of messaging is hugely important to the modern business-customer relationship and can be largely automated. Just have a little fun with it and stand out from the crowd!
    Taking things even further, one canny supplier heard that people are most impressionably in terms of their musical tastes around the age of 14. So, when you call them as a customer, your hold music is tailored to be whatever was ‘number one’ in the charts on your 14th birthday. Making the experience unique and memorable are key factors in modern customer servicing.
  2. Be open – ensure that customers know how to contact you and are able to do so through their channel of preference. You want your customers to know that your staff are always on hand to help and though this will likely mean that you will have to have staff sitting ready to respond to queries via everything from the mail room to the social media inbox, being able to cover as many bases as possible (and deliver an omni-channel experience) will really pay dividends in the end.
  3. Take complaints seriously – the single most important aspect of successful complaints handling is speed of resolution. It’s not always possible to fix customer issues in a single sitting, but being able to turn around a solution or refund as quickly as possible after an issue arises will likely have a positive impact on your net promoter score.
    Your complaint handling teams will have to be particularly well-trained and given as much autonomy and confidence as necessary to allow them to make effective, split-second decisions. If they can remain empathetic to customers and sincere in all their dealings as well, this will really make the difference to the relationship with your business.
  4. Provide un-called for remediation – In such a complicated industry, mistakes will occur. Issues with billing are quite common across energy, gas and water, and these are often the problems that cause customers most stress. This is all the more likely to occur if your business is forced to make estimated charges due to a lack of meter readings.
    Wherever possible, seek to reach out to customers by their channel of choice to deliver proactive remediation. If you find that the customer may have been overcharged, be sure to let them know and provide solutions that will be good for their pocket. We’ve even known providers to go the extra mile and deliver non-monetary remediation, for example sending flowers to say apologise. These nice gestures can really make all the difference and will probably be a small price to pay for continued customer loyalty.
  5. Use big-data for the benefit of all involved – providers that make extensive use of automation will surely have extensive information on the habits of specific customers (and those around them). When it comes to providing a personalised, net-promoter-score-boosting customer experience, the data you hold will prove invaluable.
    Make sure that your business also shares data across its various functions. Complaint handlers’ jobs will be made a lot easier if they have as much information on the customers as possible at hand, and customers will welcome the frictionless experience that this will enable.

The future of automation relies on the human touch

We no longer live in an analogue world, that’s for sure.

But as innovative services, products and communication channels change the very shape of the utilities industry, there will surely grow a desire for personable ‘real’ service. Delivering such a dedicated and personalised customer experience could really see a provider break away in this competitive and volatile market.

So, let’s take advantage of the best of both worlds, shall we? After all, there’s nothing to say that automation and self-service has to be so detached and impersonal.

Alex prentice

Alex Prentice

Sector Lead