Utility Week

UTILITY WEEK | 7TH - 13TH DECEMBER 2018 | 27 Customers data sets that can assist us in terms of how we trade, hedge and manage our portfolio." For Cook, the educational benefits of smart meters to consumers are equally important – because they allow them to visu- alise their consumption and, therefore, make "informed" decisions to reduce energy use and save money, he says. Another important topic in today's energy world is the incoming price cap on standard variable tariffs (SVTs). In November, Ofgem set the final level of the incoming energy price cap at £1,137 – just £1 higher than the proposed amount. Cook is philosophical about the cap and can see both advantages and disadvantages of the mechanism, which was designed to protect customers on the most expensive tar- iffs. "I need to place myself in the middle, I can see pros and cons to both as a business owner active in the energy market. For the consumer I 100 per cent recognise that for them doing absolutely nothing, they will save £76 a year and that's a big win. How- ever, I also fear that it could lead these peo- ple into a false sense of security in thinking they are on the best deal." Cook is also concerned that the cap could restrict the extent to which a company can hedge, or purchase energy ahead of time. "What we need to do is to be able to hedge out in line with the price cap rules to be able to lock in that gross margin," he says. Recently Eversmart announced its Fam- ily Saver Club tariff, a tariff that will let cus- tomers pay for their energy 12 months in advance. The supplier says its Family Saver Club tariff is £49 cheaper than the closest other fixed-rate deal, and £63 cheaper than the closest big six fixed-rate deal. In its enthusiasm for its new product Eversmart, had to apologise to Money Sav- ing Expert founder Martin Lewis aer send- ing out an email implying he had endorsed the Family Saver Club. The email was sent in relation to Lewis talking about the idea of paying for a year's worth of energy bills up front. Aer Lewis posted on Facebook denying he had endorsed it, Cook issued an apology on behalf of the company. "It won't happen again, and we hope there are no hard feelings. We're huge fans of Martin and his work," he said. Although smaller energy suppliers are facing increased hardship in today's some- times ruthless market, it is clear there are those who wish to stand out from the crowd and avoid the treacherous path others have tread. Eversmart has not always got it right, but it is certainly different in its strategy. Eversmart criticised by Citizens Advice, see news, p13 Market view Communicate with vulnerable customers Jane Asscher says traditional energy advertising campaigns fail to connect with vulnerable audiences. A t the end of last month, Citizen's Advice filed its super- complaint to the competition watchdog over what has been dubbed a £4bn "loyalty fine", highlighting the widespread practice of overcharging loyal customers. The complaint highlighted the fact that the most vulnerable are most likely to be affected because they tend to switch providers less frequently. Also, many customers who struggle financially are on a pre- payment meter (PPM). Customers on prepayment meters struggle to access better deals – a PPM customer could save £221.16 if they switched to the cheapest direct debit tariff on the market. As a creative communications agency specialising in behavioural change — oen with vulnerable audiences at heart — we at 23red can't help but see that as a failure to reach and connect with those audiences. Traditional advertising campaigns oen miss these peo- ple, and standard direct comms with long copy about services avail- able are also not suitable for many vulnerable customers who find it difficult to understand. Suppliers rely too much on consumers seek- ing advice and support. What they need is bespoke communications programmes that have their needs and potential touchpoints at the heart – perhaps shiing the focus to creating collateral to be used by local support groups, as opposed to ploughing budgets into TV ads. One project that encapsulates this is Smart Energy For All, for which we led the consultation and resulting strategy. Through this we learnt a lot about what it takes to change the behaviour of these audiences. Smart meters could be a great asset for vulnerable people. They promise that everyone will have more control over what they use and, in turn, what they pay. The project involved identifying the audiences most likely to have additional barriers to adopting smart meters – barriers including disability, geography, housing type, and energy provision type. We worked with organisations like the National Housing Federation, the Post Office, Age UK and Citizens Advice to reach the most vulnerable. Ultimately however, regulation and telling people about Smart Meters isn't going to be enough to change behaviour. Even when paying too much, many people still don't act to change tariffs or providers, particularly vulnerable customers. This is in part due to what is known as 'endowment effect'. We would rather main- tain the status quo rather than risk being worse off, even in the face of explicit information. Understanding behavioural effects like these is crucial if we want to genuinely support vulnerable customers. In short, utilities companies must engage with disengaged and vulnerable customers – oen by understanding how behaviour is truly changed for that group and working with partners to provide support for the individuals involved. Recent social voice research for YouGov shows that this could not only benefit vulnerable customers, but also gain wider support for the company – with 58 per cent of the UK population wanting the brands they use to behave responsibly and 54 per cent believing brands have a responsibility to society. Jane Asscher, CEO and founding partner, 23red

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