Utility Week

UTILITY WEEK | 13TH - 19TH MARCH 2020 | 15 "Digital messages and payment options that tie in with affordability assessments will improve the rate and speed of collections payments, reduce early-stage debt and improve the collections experience for customers." T he combination of increased whole- sale prices, price caps, a crowded mar- ket and regulation are squeezing UK energy suppliers, young and old, big and small. Since the beginning of 2018, 16 chal- lenger energy companies have collapsed and the combined profits of the six largest pro- viders for domestic energy supply decreased by 35 per cent in 2018. Record levels of switching between Janu- ary and November 2019 (5,367,738 people moved to new suppliers) have and continue to create opportunities for suppliers able to differentiate themselves on price and brand experience. A good level of customer service from energy suppliers is oŒen found lacking, according to a 2019 Citizens Advice customer service league table. In that, a quarter of energy companies failed to achieve an aver- age of even 2.5 stars out of five. According to Uswitch, an energy debt of £400 million was owed by three million households at the end of 2018 – up by nearly a quarter on the previous year. Ofgem's report, Vulnerable consumers in the energy market 2019, revealed that the overall num- ber of customers in debt increased by 4.2 per cent in electricity and 4.8 per cent in gas dur- ing 2018. Among these customers there was an increase in those in arrears without a repay- ment plan, mean- ing that there is an increase in the number of customers in debt who Market view need to be contacted to work out their repay- ment options. Ofgem regulation requires the indus- try to address affordability issues and treat customers in arrears fairly. The regulation requires "suppliers to offer certain services for customers who are in payment difficul- ties, and to take all reasonable steps to ascer- tain the customer's ability to pay". Undertaking affordability assessments is a central element in adhering to these guidelines and the first step in setting afford- able payment plans. Completing income and expenditure (I&E) forms via phone and paper can be a time-consuming and expen- sive process. These assessments oŒen create a poor customer journey and don't always capture the most accurate data. Smaller providers may not have the infrastructure in place to undertake these, nor can they afford to blight the brand experience for relatively new customers. Self-service tools Self-service, digital channels that enable the agent, customer or both to complete I&E forms across multiple devices, as well as on the phone, can be transformative. Where previously an I&E analysis could tie up agents and customers for an average of 45 minutes, at a cost of £40-80 each, the omnichannel I&E process takes just 15 min- utes on average. Intelligent self-service data validation tools make the assessments more accurate and, consequently, the payment plans more realistic. Digital channels promote more col- laboration between both parties and inter- nally between departments, helping to better educate customers and give them greater visibility and control over the I&E process. For challenger brands, a digital afford- ability process not only lowers the burden and cost of assessments, but also empowers them to adhere better to industry directives. Streamlined processes Technology in collections itself also has a huge role to play. By harnessing back-end technology to streamline the collections process, smaller utilities companies can compete with larger providers in debt recov- ery and communications. Providers must offer their customers choice and flexibility in paying their debts to encourage prompt payment. Automated and omnichannel collections technologies, such as SMS, outbound and inbound interactive voice response, mobile, email, web and online portals, better engage customers and encourage loyalty. Moreover, funds are recovered at an earlier stage and the cost of collections is reduced. Omnichannel communications and pay- ments channels also help to reduce early- stage debt. Ofgem requires suppliers not only to manage and recover debt, but also to focus on preventing debt. This means mak- ing early contact with customers before they accumulate debt. Digital messages and pay- ment options that tie in with affordability assessments will improve the rate and speed of collections payments, reduce early stage debt and improve the collections experience for their customers. Collections is too oŒen an aŒer-thought. Many of your good long-term customers may be struggling to pay their utilities bills, so it is important to create a consistent brand experience in collections. The first step is to harness omnichannel technology that ena- bles you to assess affordability, set plans and collect payments. Mark Sussex, head of international, illion Digital Tech Solutions See Consumer Debt Conference report, p16 Intelligent debt recovery With energy debt rising, smaller suppliers have an opportunity to differentiate themselves through the way they handle customers experiencing payment difficulties, says Mark Sussex. Operations & Assets

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