Posted: 7th February 2022
The utilities sector is consistently faced with the challenge of improving customer satisfaction. It is rated lower than the UK average for transparency, customer ethos and emotional connection and with the added pressures of the pandemic and rising energy prices this sentiment is likely to get worse before it gets better.
The financial impact of the pandemic continues to take its toll on people’s physical, mental, and financial health. Redundancies, business closures and reduced earnings has resulted in nearly 51% of people being forced into debt since March 2020, having to use credit cards, overdrafts or loans from friends and family just to stay afloat. The Citizens Advice Bureau reports that between 2.8 and 3 million households have fallen behind on their energy and water bills, respectively.
Understandably, many people are worried about their ability to cope financially, and this has turned the spotlight onto the way organisations treat their customers – especially those who are vulnerable. Organisations providing critical services, including the utilities industry, stepped up to support their customers, offering payment holidays and other mechanisms to ease the pressure. However, this isn’t sustainable, especially with rising energy costs. Therefore, the utilities industry needs to rethink its collections strategies, to make the debt collection process fair and supportive. Those willing to do this will benefit from customers’ loyalty in the future.
Huntswood has recently helped a water firm gain a deeper understanding of the issues facing customers who currently have, or expect to have, unmanageable debt and how they want to be treated by their creditors during the collections process.
58% of those currently facing unmanageable debt said that this was the first time that making repayments had been an issue for them, and listed credit cards, bank loans and utility bills as the main sources of their debt.
This means they are unfamiliar with the options available to them, so it is essential contact centre staff take the time to explain the choices available and work through to ensure they choose a repayment plan that is affordable and realistic.
Information should also be easily accessible through website and chat too.
Train your people to support vulnerable customers and identify distress
There’s no doubt that financial distress, heightened by Covid-19 and rising energy prices, is affecting people’s mental health. People feel embarrassed about their debts and abandoned by the companies that they owe money to; they even feel scared to talk to them, which makes their financial situation worse. Customers have admitted avoiding communication and waiting for the company to contact them first.
Engage early with customers
By extending the collections journey to include pre-emptive involvement and increasing end-to-end monitoring and automation, companies could engage with customers as soon as they’re deemed to be at risk of getting into debt, to discuss the best way to tackle the situation. There’s scope for companies to engage with customers more proactively, using data to understand them better and avoiding putting them into a ‘one-size-fits-all’ approach to collections. For example, a water firm is looking at improving the way it segments its customers, so that it can offer more help to those who are having problems paying their bill. There’s further opportunities to identify debt patterns across energy, water, and telecoms services.
Companies must accommodate customers’ needs in their collection process, taking into account that flexibility and fairness are seen as the most important factors by those in debt. For example, the traditional fixed payment date, where customers pay their bill on the same day every month, is changing to accommodate those who have a flexible income. Could this approach be adopted by other companies to allow for the ever-changing nature of employment contracts? As well as making it easier for them to pay their bills on time, it can make customers feel that they’re being treated responsibly by a supplier that understands the nature of their employment situation. This applies to contacting customers too.
Businesses can’t assume that all customers want to be contacted in the same way during the collections process, as everyone’s circumstance is different. Despite admitting that they were ashamed to speak to creditors, 67% of consumers said they preferred to talk to a customer service agent rather than self-serve on a website. A blend of human and automated interactions can centre collections around empathy, proactivity, and data analysis. By combining empathetic conversations, tailored support and data-driven outreach, companies can create a personalised collections journey that can help to identify at-risk moments, prevent debt, improve customer satisfaction, and increase long-term loyalty and retention.
So, can the utilities sector work to rebuild customers’ trust and loyalty, leading to sustained business success? Put simply, yes, BUT the utilities industry must do more to help its customers, especially the vulnerable ones! People have high expectations that contact should be easy, compassionate and, above all, tailored to their situation. Many feel that they are treated like a number and not like a human being. So, companies must be flexible and fair, especially when collecting debt and communicating with customers and crucially, treating customers fairly - at a time when they are most in need - can increase loyalty, which will help businesses to grow their revenue in the future.
HOW CAN HUNTSWOOD HELP?
At Huntswood, we know that effective customer service can make a difference to the success of your Collections teams, by creating a good customer journey whilst still collecting cash. We also understand the cost of earning a new customer relationship, which can be offset by preventing multi-product customers leaving because of poor customer service.
For firms to stand out in a price-driven market, brands differentiating themselves with high quality customer service can significantly improve customer experience. Ultimately, this approach carries both bottom-line and customer satisfaction benefits when executed correctly.
Huntswood delivers customer service experts to its clients, providing the right levels of support to create better outcomes and greater satisfaction.