Utility Week

Utility Week 11th October 2013

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/189195

Contents of this Issue


Page 24 of 31

Customers Event The new energy consumer How best can utilities put the consumer at the heart of the business in this smart, digital age? Ellen Bennett joined Accenture and some industry leaders in a roundtable discussion to find out. P utting the customer at the heart of the business is both a challenge and an opportunity for utilities. But with the rise of digital and smart technology and ever-increasing expectations, just who is the new energy consumer and how can utilities best cater to them? Accenture has spent the past four years compiling consumer insight and creating a yearly New Energy Consumer report. Managing director of Accenture Energy Consumer Services in the UK and Ireland, Oscar van der Berg, joined Utility Week editor Ellen Bennett and group of industry leaders at a roundtable in London last month to debate the issues and review the latest findings. The discussion opened with three brief presentations to set the scene. Vijay Tank, head of business transformation at Eon, talked about how the energy industry was "facing the biggest change cycle since privatisation". He outlined the major challenges – lack of customer trust, hostile media scrutiny, the need to continue to invest to keep the lights on – and argued that the industry needed to understand what customers want, and embrace it. The Chief Ombudsman, Lewis Shand Smith, had worrying statistics on hand that suggested the industry had a long way to go to meet customers' expectations. The Ombudsman is seeing a huge rise in complaints, he said, up 33 per cent last year. Most complaints arise from bills and switching, but European experience suggests smart meters will present a separate source of ire. The mismatch between customer expectations and service levels is, for some, an opportunity. Richard Robey, sales and marketing director with Haven Power, outlined how his business had spotted the gap in the market for SME customers, who were either being treated like domestic customers or larger businesses – neither of which suited their needs. Smart metering The group discussion began with smart metering. One delegate outlined his concerns that the supplier-led rollout would cause significant problems for customers. The delegate said official estimates were that 2 per cent of installations would require intervention by the relevant distribution network operator, which would nearly double the amount of customer callouts networks have to manage each year. There was widespread agreement that the smart meter rollout model was not perfect, but as one delegate said: "The industry needs to work together to ensure the customer experience is as positive as it can be." Education and engagement was the biggest worry, with initial supplier experience pointing to consumer apathy. "Smart meters will only be valuable if people use them," one delegate said. The biggest opportunity, the group agreed, was in the data arising from smart metering. However, there was concern that companies weren't set up to take advantage of this data. Digital All the companies represented recognised the importance of digital channels to their business, but none had yet tackled them to their own satisfaction. As one supplier said, "awareness and understanding in the industry is really low". While recognising the importance of digital, suppliers were unsure as to what priority to give it against competing demands. This may be partly because there is no one right way to introduce digital: "Suppliers are quite torn – how do consumers want to pay their bills?" Utilities have the same customers as other sectors and should learn from those sectors, suggested one delegate. However, they will be using the same data and back office systems for digital as for other channels, and this could cause problems because the systems were set up for call centres. Moreover, they need to ensure that digital interactions are compliant. This could result in replicating what one delegate called the "Apple experience", where customers are frequently asked to agree to detailed and technical updates to Apple's terms and conditions. "We've been though dealing with all this complexity in paper bills already – but how much of it is driven not by us, but by regulation?" was one supplier's rhetorical question. Brand For some energy companies, a successful brand is one that does not appear in the press. For others, mostly suppliers, brand is of huge importance. However, delegates agreed that the individual brands seem to count for less than the collective brand of the industry as a whole. "There is a lot of rivalry between suppliers, and while it may seem to help one company to fight against another, actually it damages them all in the eyes of the consumer," said one. Given that the industry sells on price, this is little room for strong brand identities or differentiation, said another. However, several delegates praised British Gas's recent advertising campaign, "We Look After Your World", for demonstrating that energy companies do more than simply keep the lights on. The whole table was critical of the term "big six", pointing out that six major companies is a fairly large competitive field and stands up well in comparison with telecommunications and retail. There was some discussion of the threat posed by new entrants. Delegates felt that new entrants would face considerable challenges at this stage, given the many policy and regulatory demands on utilities. The smart thing for a potential new market entrant to do would be wait for smart metering and other market changes to be resolved. Skills Given the many changes utilities are experiencing, they need new and different skills. This is a challenge given the ageing workforce – one business represented at the table had 5,000 employees, for which one in five had been working there for more than 40 years. Finding talent outside London was also named as a challenge. However, on the up side, utilities found themselves more attractive to graduates since the financial crisis damaged the image of the financial services sector. UTILITY WEEK | 11th - 17th October 2013 | 25

Articles in this issue

Archives of this issue

view archives of Utility Week - Utility Week 11th October 2013