Are Big Switch initiatives the best approach?

Published on May 8, 2012 in electricity, gas and utilities. 0 Comments Tags: , , , , , , , .

Paul LaycockBy Paul Laycock

Consumer group Which?’s Big Switch reverse auction is due to take place tomorrow (9 May), aiming to use the power of collective bargaining to source a better energy deal for consumers.

These schemes certainly have plenty of support; Energy Secretary Ed Davey is on board, over 275,000 have already signed up and EDF has become the latest big supplier to announce it will bid alongside Eon and Co-operative Energy.

Consumer Focus’s Director of Empowered Consumers, Richard Bates has also given collective switching his backing, saying: “This could be a great way to make consumers more powerful in some really important markets.”

However, despite all of this I’m yet to be convinced that this is necessarily the best solution for customers or the industry. You see I’m always open to any innovation within the energy markets that offers better value, but my concern is that this approach may accidentally reinforce a customer acquisition model that leads suppliers to penalise customer loyalty.

You see processing up to 275,000 new customers within a short period of time would be a massive customer service challenge for the winning supplier, particularly for anybody outside of the Big Six where this would mean more than doubling their customer base overnight. Furthermore, the nature of the process could inadvertently lead the winner to offer a loss-leading tariff which required them to recoup the losses from existing customers.

High levels of customer churn also add significant costs to all suppliers in the market, which is inevitably passed on to consumers in the form of higher bills.

For these reasons I believe a more positive move from the suppliers would be to prioritise retention offers designed to increase lifetime customer value. Particularly as at the very least the Big Switch campaign will make customers more aware of the option of switching as a means of getting a better deal.

Is collective switching in consumers' best interests?

This route forward requires implementing the systems and processes that enable a deeper understanding of a customer’s overall value to the organisation. But the benefits lie in establishing a connection with customers that leads long term business to be more sustainable.

Where do you stand on the concept of collective switching? Is it the answer or is there a better route forward for consumers, regulators and suppliers?

Can the utility industry learn a lesson or two in trust from Telco?

Published on April 25, 2012 in customer trust and utilities. 0 Comments Tags: , , , , , , , , , .

By Joseph Barber

Those in the utility industry know only too well that they need to become more customer centric in how they conduct business and that to build lifelong relationships with customers they need to engender trust. A positive step in the right direction is news that energy companies will be required to inform customers once a year what their best tariff is, particularly when their fixed-term deal comes to an end. According to ministers this move could potentially see households saving up to £100 per year.

Ofgem states that there are more than 300 different tariffs being offered by suppliers. Understanding the different energy tariffs that are available, and what they mean for their particular household, can therefore be confusing for customers and for this reason we welcome this move by Government. However, in itself it only skims the surface. Levels of customer mistrust are unfortunately at an all-time high and can only be reduced if this forms part of a much wider customer communications strategy in helping people engage more effectively with their energy bills and provider.

Let’s briefly take a look across sectors where we can see an excellent example occurring within T-Mobile Austria of how tariff optimisation, if done correctly, can work particularly well in building strong relationships with customers. Here, advisors within T-Mobile deploy intelligent analytics to obtain a single view of the customer and craft a tariff based around the individual’s mobile phone useage. Customers feel content that they are being treated as individuals, receive a great customer experience and receive personalised packages that suit their needs.

Since implementing customer analytics T-Mobile has been able to deliver a more tailored approach to generating tariffs, and has experienced increased effectiveness of their customer retention activities achieving a 20% reduction in churn.

Tariff overload leaves consumers in a spin

A one size solution does not fit all. It is all about knowing enough about each individual customer to tailor tariffs and services so closely to the customer’s ideal that they are naturally drawn to purchase with little ‘persuasion’ required. Building trust and developing an emotional connection with customers is one of the most important strategies you can implement to boost customer value, improve relationships and ultimately impact your bottom line.

Energy companies must get on the front foot in tackling trust issues

Published on April 16, 2012 in Billing, Customer service & communications, customer trust, electricity, gas and utilities. 0 Comments Tags: , , , , , , , .

By Lloyd Day

With local elections just around the corner it’s been another tough week for the energy suppliers in the battle to gain customer trust.

First Nick Clegg scored some quick political points announcing they must write to customers once a year to inform them if they could be on a cheaper tariff. Then a YouGov report report revealed 84% believe energy suppliers maximise profits at the expense of customers.

Consumer Focus has cautiously welcomed the Deputy Prime Minister’s announcement but warned one-off mail shots must be part of a wider strategy if the suppliers are to restore customer trust. And this for me gets to the crux of the issue for the energy providers.

As long as these moves are seen to be being instigated and enforced by government they are unlikely to engender any sense of goodwill from consumers. Yet were the suppliers to voluntarily go further and regularly inform customers (or even offer to automatically switch them) when a cheaper tariff was available, I believe benefits could be realised that were in the interests of all parties.

For example, the government claims that seven out of 10 people are not currently on the right tariff and despite the added expense of poor retention rates there are currently numerous voices calling for consumers to switch in order to find a better deal. Surely it would be better for suppliers to foster loyalty by regularly switching them to their most appropriate tariff rather than driving them into the arms of a competitor by overcharging them in the short term?

Energy providers must get on the front foot in tackling trust issues

The industry recognises the need to become more customer-centric and has already made a number of very positive steps in the right direction. But I wonder if some have fully come to terms with just how quickly politicians and consumers are expecting these changes to be made? Getting on the front foot and being seen to be introducing these initiatives of their own free will could be just what is needed to enable relationships with customers to thrive.

Deal or no Deal?

Published on April 5, 2012 in Customer service & communications, customer trust and utilities. 0 Comments Tags: , , , .

By Joseph Barber

I recently attended The Future of Utilities conference in London and listened to some interesting industry conversations on deploying technology to drive efficiencies and the issue of customer trust. One of the presentations that I particularly found interesting was by British Gas on The Green Deal.

In this session British Gas presented on their plans to implement the initiative and how this is a great opportunity to interact with individual customers. They outlined goals to enter 12 million homes   however explained that the specifics of day to day customer engagement remain to be finalised.

The commitment shown today by British Gas highlights the opportunity organisations see in the Green Deal, which only bodes well for the scheme’s future success, however for me, customers must sit at the foundation of any strategy if this is truly to work. This is a great opportunity for the industry to restore levels of customer trust if the entire journey from delivering customer communication, to employing engineers with the relevant skillsets, to managing the actual process of booking in jobs, is done correctly; the industry already is struggling to win customers’ hearts and minds and cannot afford for such a flagship initiative to fail.

Consumer group Which? has stated in the media that the most important thing is getting the detail of the green deal right for homeowners. Richard Lloyd, executive director at Which? has been quoted as saying: “It’s crucial that the Government gets the fundamentals of the Green Deal right. If it’s not good value for consumers overall, short term incentives will not be enough to guarantee that this scheme will be a success.”

Inadequate communication will cause Green Deal confusion

I couldn’t agree more. It is only by having meaningful and insightful conversations with customers across all touchpoints that suppliers can develop real understanding and a greater capacity to forecast and devise what customers actually want. Every customer’s situation and home environment is different and each individual has different needs. As we’ve covered in more detail in our Green Deal white paper, taking a more personalised approach to managing such a major initiative will make customers feel valued, informed and much more engaged.

A key insight into the Future of Utilities

Published on March 22, 2012 in Customer service & communications, customer trust, electricity, gas, utilities and water. 0 Comments Tags: , , , , , , , , , , , , .

Paul LaycockBy Paul Laycock

We’ve outlined previously on this blog the challenges being faced by the utilities industry. Put succinctly, it is under intense pressure to keep prices down while investing billions in the infrastructure upgrades that are needed to realise a transition to low carbon generation and supply. However, there’s little clarity on how government or regulators expect these conflicting aims to be achieved.

We are therefore looking forward to the opportunity presented by next week’s Future of Utilities conference to listen to our peers, share ideas and hear first-hand how the industry feels it is progressing. In particular, we look forward to finding out about the innovative ways utilities providers are deploying technology to drive efficiencies and help address these challenges.

Customer trust is also an issue that needs to be tackled, since strong customer buy-in is absolutely central to enabling planned large scale projects – such as the smart meter rollout, the green deal and the water industry’s  proposed infrastructure upgrades – to succeed.

As Dr. Paul Golby, CEO of E.ON UK stated at last year’s conference, the industry has to accept it isn’t always naturally well-regarded by its customer base.  Since he made these remarks utility providers have undoubtedly made some concerted efforts to show understanding and become more customer-centric at a time when utilities bills command a significant share of increasingly squeezed household budgets.

However, with customer trust in the utilities sector dropping from 60% to 53% last year there is still a lot more to be done. With this in mind we’ll be presenting on ‘The key to building customer trust’ and taking the opportunity to share real examples of how we have helped organisations:

  • Achieve Qualitative results and improved SIM Scoring

    Without customer buy-in large planned projects won't succeed

  • Obtain a 360 degree view of the customer in real time
  • Provide best next actions to contact centre staff
  • Recommend appropriate price bundles based on the individual
  • Improve company reputation and build advocacy
  • Reduce service failure

This will incorporate ways we are working with Yorkshire Water to help improve its customer experience as well as some of the lessons utilities providers can learn from other industries in fostering trust amongst their customer base.

Do join us if you can as the conference really does present a unique opportunity to network with peers and come away with new ideas. We’d love to hear your thoughts and I’m sure the conference will provide a lively platform for debate.

The Green Deal is missing basic communication skills

Published on March 12, 2012 in Customer service & communications and utilities. 0 Comments Tags: , , , , .

Paul LaycockPaul Laycock

A survey out this week by The Green Deal Skills alliance reveals that only a third of the existing workforce has the skills needed to deliver the government’s flagship Green Deal energy efficiency scheme. The Department of Energy and Climate Change is therefore putting forward £3million to help people skill-up to deploy Green Deal measures to ensure that this scheme is a real success on the ground.

However an unskilled workforce is by no means the biggest issue that could make this campaign flounder.

The Green Deal scheme won’t even reach 14m homes unless Government urgently addresses customer concerns. With seven months to go, there is still a massive communications challenge for utility providers to overcome, and simply offering customers ‘sweeteners’ in the form of £150 cash back upon take-up, in my eyes, isn’t really the most appropriate measure for real engagement.

First of all is the need for utility providers to have clear and concise conversations with its customers to engender their buy-in to the scheme as so much has changed since it was first unveiled. Customers need to know exactly what The Green Deal is, how it is financed, who is eligible and which energy efficiency measures qualify for the scheme. For example, some of the seven million customers who are on prepayment meters are unsure about how payment will be taken and specifically keen to know how meter credit will be allocated against Green Deal payments. And, what is also important is that these conversations are taking place via the channels that customers want to be engaged with.

Meaningful dialogues with customers can enable suppliers to understand what customers want

These challenges mentioned above should be seen as opportunities for utility providers. The Green Deal could be a huge opportunity for utility providers to transform their relationships with customers and generate some positive customer sentiment. Where consumers are unaware of what is available for them there are marketing and possibly sales opportunities. Where customers have little knowledge of what is on offer for them under the Green Deal but need guidance, there is an instance simply to advise and begin to forge trust on which to build business.

By having meaningful dialogues with customers, suppliers can develop real understanding and a greater capacity to forecast and devise what customers want. Every customer’s situation is different and each individual has different concerns. A personalised approach to managing such a major initiative will make customers feel valued, informed and much more engaged.

Drought customer communications; are water companies ready?

Published on February 29, 2012 in Customer service & communications, utilities and water. 2 Comments Tags: , , , , , .

Paul LaycockBy Paul Laycock

The vast majority of people are unaware that we are currently in the middle of a crippling drought, with river levels in many areas lower than they have been since 1976. Such prolonged periods of drought can have numerous negative knock-on effects – on wildlife, on agriculture and even on consumers through enforced water-saving measures and higher food prices. This presents an interesting challenge for the water companies – how do they engender customer support to actively reduce their individual water consumption when they are going through  a period of increased prices?

As we can see with the recent ‘call to action’ by Thames Water to its customers, when drought conditions are imminent water companies are obligated to carry out a communications and marketing campaign urging people to reduce their water consumption and relaying the positive impacts this brings. However, during an emergency drought summit last week the Environment Secretary Caroline Spelman warned that in light of climate change the government is now preparing for drought as ‘the new normal’ in the UK. I’d therefore suggest that communicating this type of information now needs to become a year-round priority for water companies.

Implementing an effective customer communications programme  consists of many different elements, all of which must be in place to ensure customer expectations are met in a cost-effective manner. Easy to access and  up to date information on the current drought status needs to be available via the company website, and call centre operatives need the information at their fingertips to ensure routine customer queries are satisfactorily addressed at first point of contact. Every opportunity also needs to be taken to use each customer interaction to disseminate information on the simple everyday measures that individuals can implement to cut their own water use.

Bone-dry River Derwent

River levels in many areas are dangerously low

Furthermore I’d argue the water companies also need to be more proactive in communicating some of the measures they themselves are taking to minimise water wastage as it will ultimately be customers who pay for this work through higher bills.  For example, they have already invested significant resources into upgrading their networks to reduce leaks and increase efficiency. Customers would no doubt be more open to requests to change behaviour if they better understood the long term benefits that will be realised by the continuing infrastructure investments that the water industry is making.

Urging customers to reduce water consumption immediately before a drought to avoid more stringent measures is one thing. But if changes to the UK’s climate make drought a more frequent occurrence, it will be imperative that efforts to encourage individuals to take greater responsibility for cutting water waste are ongoing. Just like the physical network before them, the water companies’ customer communications capabilities will have to be upgraded to meet this new challenge.

Call centres hold the key to customer satisfaction

Published on February 17, 2012 in Customer service & communications, electricity, gas and utilities. 0 Comments Tags: , , , , , , , , , .

By Lloyd Day

Call centre operatives tend to be undervalued within large companies, yet they act as the gatekeepers holding the key to achieving greater customer satisfaction. Why? Because they operate on the frontline of customer service and therefore have a huge impact on consumers’ perception of the organisation as a whole. Nowhere are these perceptions more important than in the energy market, where, since all suppliers are selling the same gas and electricity, price and customer service is all that they have to truly differentiate themselves from their rivals.

EDF is the latest of the Big Six to face criticism, after an anonymous employee claimed customer complaints have soared as staff struggle to get to grips with a new £160 million customer service system. It’s unfortunate that there have been teething problems, but the size of this investment at least shows EDF are taking this issue seriously. In fact, it seems the company is in a no-win situation as it is now being criticised for the very measures it is taking to improve its mechanisms for responding to customer queries effectively!

I’m sure we’ve all had a negative experience of dealing with a bad call centre. Long waiting times, repeating the same information to different people and being unable to have simple queries resolved   at first point of contact can all be incredibly frustrating. However, we should also remember the positive examples of customer service when the call centre operative seemed to have all of the relevant information at their fingertips, knew exactly what the customer wanted and went the extra mile to make them feel valued.

The Gatekeepers

Call centre operatives hold the key to customer satisfaction

No customer service employee sets out to be deliberately unhelpful. Yet dealing with large volumes of customer enquiries is a major challenge, especially when the proliferation of new communications channels available to customers is taken into account.

To deliver the experience customers expect, staff need a single holistic view into each customer, available in real-time. This includes a complete list of the products and services supplied to them, their interaction history with the company across all channels and the ability to view all previous customer communications exactly as the customer received them. Appropriately intelligent systems are therefore vital to customer-facing employees’ ability to succeed in their day-to-day roles.

Call centre staff are the human face of gas and electricity providers. Equipping them with the tools to do their job more effectively must be an ongoing priority if customer loyalty and trust within the energy market is to be achieved.

An urgent need to tackle metal theft

Published on February 3, 2012 in Asset management, Customer service & communications, Location intelligence, electricity, gas, utilities and water. 0 Comments Tags: , , , , , , , .

Paul LaycockBy Paul Laycock

Last evening’s  special edition of ITV’s Tonight Programme focussed on metal theft, an issue one in five of us has been directly affected by and which is now estimated to cost the UK as much as £1 billion every year.

With metal prices soaring on the world markets this isn’t a problem that is likely to go away. Hospitals, churches and even war memorials have all been targeted. And with the copper in electrical cables capable of fetching £1000s, thieves are increasingly targeting power providers who are now facing around 700 attacks to their networks each month.

The direct cost of responding to each of these attacks – identifying the fault to the network and rectifying it – is itself considerable. But the real problem is of course the wider impact on all of a utility provider’ customers within a particular area when a key piece of infrastructure such as a substation is taken down.

This presents an operational challenge to get the network up and running again as quickly as possible but also a severe test of the company’s customer communications capabilities to keep customers informed of the status of the situation and when their service is likely to be restored. It’s therefore imperative that power providers take action now to identify weak points in their network and understand where to best focus their security resources to minimise their risks of attack.

Metal theft must be stopped in its tracks

Last night’s programme also highlighted how British Transport Police is already tackling this national problem on the railways, identifying crime hotspots in order to ensure areas where police resources can be deployed to have the greatest effect.

Capturing accurate location data and being able to analyse its significance is the key to preventing metal theft. But thieves continued willingness to risk their lives, and the sheer size of the networks power providers must protect, makes this challenge considerable. So much so that British Telecom has seconded 40 of its own experts to a Waste and Metal Theft Task Force to help tackle this threat. How long I wonder, before we see utilities providers signing up?

Greater transparency fits the bill

Published on February 3, 2012 in Billing, Customer service & communications and utilities. 1 Comment Tags: , , , , , , , , , .

By Lloyd Day

Public reaction to two announcements this week –  the upcoming rises to water bills and the government’s decision to shelve plans for the compulsory implementation of smart meters – have one thing in common: utilities customers want to see more ‘bang for their buck’ and better understand where the money they are being asked to pay is going.

Customers want to know what return they will see on the major infrastructure investments that utilities providers undertake on their behalf and how these changes are going to affect them. This hunger for information goes well beyond the remit of the traditional statement, and, even for those with the information at their fingertips, the myriad of available tariffs to compare can make this information confusing.

Thankfully, the transparency of customer billing is an issue that the industry is taking seriously. In the energy market,

Customers expect clear and concise communications from their utility providers

Ofgem is pushing for a model bill that enables customers to compare suppliers more easily. While Ofwat has made clear it will take action against water companies who fail to deliver on their investment promises.

The suppliers themselves also seem to be on board with the initiative. Eon, for example, has recruited former Asda and Royal Mail boss Allan Leighton as Chairman of its independent customer council, and set him the task of coming up with an easy to understand energy bill for its 5.5million customers. This is great news for consumers and for the industry as a whole, as where one of the Big Six leads the others tend to follow.

Whether the main driver proves to be regulatory or commercial, it appears the will is there for the utilities sector to become more accountable, tackle the issue of the complexity around its billing and enhance the way it communicates with customers. The task now will be to develop the relevant processes and systems across the organisation that makes future interactions with customers more clear and transparent, and ultimately helps restore customer trust.

I’d be interested to know whether you think we’ll see positive progress in this area and what the long term repercussions will be for the sector.