Utility Week

12 | JANUARY 2023 | UTILITY WEEK Customers In characteristically straight-talking style, Cox warned that if utilities shied away from questions about their legitimacy, then public frustration would boil over, triggering "irra- tional" political interventions in the market. Hope ahead Such portentous words are nothing new. Vet- erans of the UK utilities industry will be well used to discussions about the causes of low consumer trust in the sector and the need to forge a new deal with customers – hence Utility Week's New Deal Campaign in 2019, which culminated in a high-pro… le debate featuring leaders such as Eon boss Michael Lewis, Northern Powergrid chief executive Phil Jones, the eminent chairman of the Committee on Climate change, Lord Deben and Jonson Cox, then chair of Ofwat. Back then, leaders clearly recognised the need to redraw utilities' social contract with consumers for a future including monumen- tal investment for net zero and a transition to smart, digital services founded on dynamic use of data – both asset and consumer. What has changed since then is that cli- mate threats have become more intense and consumer willingness to shoulder any costs associated with mitigating them have dimin- ished thanks to the squeeze put on domestic … nances … rst by the pandemic and then by the cost of living crisis triggered by the war in Ukraine. In our October 2022 survey, less than a quarter of respondents said they would be willing to pay for utilities to make strides towards net zero. And there was a lack of sympathy with the idea that getting to net zero should lead to increased costs for con- sumers. Less than one-third (27%) agreed that it is tough for utilities to make sustain- ability investments while keeping bills low. But while it may seem depressingly as though utilities' battle to build legitimacy is only getting harder, there are some who look at Utility Week's new research … ndings and … nd hope. Speaking to Utility Week, Deepak Ravin- dran, chief executive of Kraken Technolo- gies – the technology company spawned by the energy industry prodigy Octopus Energy – says the industry may be on the brink of a signi… cant step forwards thanks to wide- spread transformations of customer engage- ment platforms in the sector. Historically, Ravindran observes, energy and water providers have lacked a "strong platform" for › exible customer engage- ment, resulting in inconsistent experiences, frustration and rigidity in service delivery modes. In this world, he says, "it is very diœ - cult to see" why customers would want any- thing other than a commodity supply service from their utilities. But re-platforming moves in energy – and soon water too – mean customer engagement is about to move into a new era, according to Ravindran, and this will "open the door" to provision of value-added services. Another strategy leader working for a major energy supplier agrees that legacy fail- ures on the basics of customer experience have undermined the introduction of higher value propositions in energy. Put simply, they say "people don't like to buy stuŸ from people they don't trust", so where customers have been burned by poor service or confus- ing product information in the past, they are twice shy of engaging further. However, where strong engagement has been achieved, customers were generally open to conversations about services which might help them manage their energy usage more eŸ ectively. Our commentator says: "The lack of interest in service provision [shown in the survey] is not really re› ected in our daily conversations with customers. The reality is that in the current economic climate a key service we can oŸ er is to help customers lower their bills. "That might not have been what people were thinking of when they chose to say they were uninterested in services from utili- ties. I think what is more telling, and more hopeful, is that 72% of consumers told you they are willing to reduce their energy use to help manage their bills and that another big chunk said they would be willing to change their habits if we gave them the right price signals. That's what we need to focus on." Jess Cook, project development manager at National Energy Action, also thinks that consumers may not have been clear about what kind of new service provision they were being asked to imagine from their util- ity when responding to the survey. And, she points out, in the midst of an aŸ ordability crisis, there would have been a good deal of caution about seeming to endorse the crea- tion of multiple new "up-sell opportunities" for utilities. "I think a lot of people may have imme- diately thought that a new service from their continued from previous page The provision of excellent customer service provides utilities with an opportunity to build the trust required to be take the relationship forward

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