Utility Week

24 | SEPTEMBER 2022 | UTILITY WEEK Customers Download report How well do you know your customers? A new Utility Week report, in association with Mastercard, explores the barriers hampering energy and water companies' ability to engage with customers across the billing and payment cycle. T he cost of living crisis has monopolised much of the news agenda for months as households and businesses across the country take stock of record-breaking interest rates and staggering inflation. The Bank of England has warned that the economic outlook could be much worse later this year, which paints a stark picture as thoughts turn to the energy price cap increase in October. The economic onslaught has already seen energy and fuel prices skyrocket, leaving swathes of customers struggling to pay their utility bills – many of whom were already feeling the crunch on finances following the impact of the coronavirus pandemic. To find out more about how utilities are responding to these wide-ranging chal- lenges, Utility Week partnered with global payments and technology company Master- card to conduct a unique piece of research with industry leaders for an Insight Report titled Billing and Payments: How Well do You Know Your Customers? The survey sought to reveal the enduring challenges for energy and water utilities as they explore how an enhanced approach to billing can help to address some of the pressures currently fac- ing domestic and business customers. The research also looked to understand the scope for utilities to provide customers with more flexibility and control over their payment arrangements. According to our survey, customers are more likely to communicate with their utility provider about issues with their bills, rather than proactively making their own decisions about payments. 65.2% of utilities have seen a rise in customers requesting their bills to be paused or reduced, or for payment arrears to be revaluated. This trend is reflected in the number of customers who have not paid or have decided to reduce payments. Interest- ingly, the occurrence of late payments has increased for 34.8% of utilities and 30.4% are seeing a rise in failed payments, while just 26.1% have experienced a surge in can- cellation of recurring payments. The capacity to provide a personalised service is wholly dependent on utilities' abil- ity to better understand their customers, and many respondents expressed concerns that they did not have a firm grip on collecting accurate and valuable customer data. Our survey found that for 52.2% of energy and water companies, generating valuable data to inform other business activities is a major challenge. Driven by the energy companies, poor quality data was also identified as the big- gest risk for the reconciliation process. A resounding 75% of energy companies and 46.7% of water companies consider inaccu- rate and incomplete data to be the most sig- nificant challenge in this area. Respondents were clear that traditional approaches to data will fall short without clear investment in new technologies and strategies that support a holistic digital transformation. Understanding billing issues There is little surprise that utilities currently consider web-based billing methods the most important. However, according to 70% of water and energy companies, paper bill- ing remains an important channel. Respondents were clear that the digi- tal transition must not leave any customers behind. Offering a multitude of billing chan- nels is critical to ensuring customers are engaged via channels that are most conveni- ent for them. While there are clear merits in linking usage and billing through a more interactive platform, utilities are at different stages of maturity in this space. Legacy systems and dated strategies were pinpointed as a sig- nificant blocker for some businesses as they work towards offering customers a more per- sonalised billing journey.

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