Utility Week

30 | NOVEMBER 2021 | UTILITY WEEK Customers Event Serving up net zero Getting consumers to engage with net zero is going to require big changes to service strategies. But are utilities clear on what those changes should look like for a diverse spectrum of customers? T he drive for net zero is creating a need for radical changes to service strate- gies in the utilities sector. This was the starting hypothesis put to a group of senior energy and water company representatives at a recent Utility Week roundtable, hosted in association with Capita. And it's one with which the assembled individuals – all holding responsibility in their respective organisations for aspects of customer service or proposition development – largely agreed. The UK's ambition for carbon neutral- ity by 2050, combined with other climate change driven trends such as water scar- city and biodiversity loss, imply a need for behavioural and lifestyle changes on a society-wide level, they said. All of us must start using less energy and water, and using that which we really need more efficiently. In the case of energy, there's also the option for consumers to pitch in by proactively leverag- ing assets like electric vehicles, solar panels, small-scale batteries and more to help the grid run more efficiently. To enable this shi‚, our expert group said they acknowledge the need to engage differ- ently with consumers and to offer them new things – from personalised energy and water management advice to the installation of technologies to help them be more efficient. Or options that make it easy for them to take part in energy flexibility services to the grid. But, they added, knowing what to offer, to whom and when and how, is a thorny challenge they are struggling to grasp. At the root of the problem facing utilities is a lack of up-to-date and granular data on their cus- tomers. To varying degrees, they lack insight into the level of concern and understanding that individuals have about the climate crisis or the extent to which their age, income and other personal circumstances influence their willingness or ability to take actions moti- vated by sustainability. Without this intelli- gence, it is hard for utilities to come up with effective marketing, communications, educa- tion and sales strategies for net zero-focused products and services. It's a blind spot companies are working hard to address. For both energy and water utilities, the roll out of smart meters is a foundational step, giving firms a better idea of consumption patterns and, to a degree, the ability to infer from this information what usage needs an individual or house- hold has. Customer behaviours Increasingly, firms are also harvesting data on customer engagement behaviours, track- ing their activity across company apps and online self-service tools to build a picture of the channels they prefer to use to achieve different outcomes and what kinds of infor- mation or resources they tap into. With regards to the latter area, there was agreement that the pandemic has provided an unexpected fillip to the endeavours of utilities to understand their customers bet- ter. One roundtable participant in particular said the first national lockdown, which pre- vented its high proportion of prepayment energy customers from completing their habitual meter top-ups in corner shops, precipitated a mass adoption of its account management app and, consequently, a huge increase in the volume of data available on consumer behaviours. A‚er using initial data insights to rapidly deploy new affordability and vulnerable customer support services, this energy company is now keen to take a longer-term view on what its new wealth of data should mean for service strategy. This experience resonated with other roundtable participants who agreed that the pandemic has prompted a welcome wave of "digital upskilling" across significant chunks of their customer bases. They agreed that sustaining this new level of digital engage- ment and leveraging it strategically will be crucial to their ability to deliver truly person- alised advice and support to customers, and to engage them in propositions which they are in a good position to take up. While utilities are working towards this endgame, however, several roundtable par- ticipants talked about the need to make opportunistic "quick wins" with easy to iden- tify customer demographics. This included a focus on installation of energy efficiency measures and targeted efficiency advice for customers in social housing – o‚en deliv- ered in partnership with local authorities or landlords. This kind of focus has the double benefit of ensuring that those customers who are most likely to struggle with affordability are the ones helped first to reduce their spend on energy and water. As one participant was quick to point out, however, it's an approach that doesn't really bring utilities a closer understanding of those customers' personal challenges and motivations. Nor will it help them develop compelling propositions for investment in things like low-carbon heat- ing technologies for the mass "able to pay" market. For this segment, the biggest issue for utilities is overcoming the undeniable bar- riers of cost and disruption which come hand in hand with many new low-carbon technologies or home interventions. None of our group had firm ideas about how they can counter these objections from custom- ers, except that education, coupled with

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