Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/390460
UtILItY WeeK | 3rd - 9th OctOber 2014 | 27 Customers Market view T he past 12 months has seen Ofgem dishing out huge fines to a number of the big six over improper handling of complaints and miss-selling. Beyond this, it has also implemented strict regula- tions regarding the practice of incentive marketing, resulting in mounting pressure on businesses to improve and extend their relationships with customers through an expanding variety of channels. Ofgem's measures have been imple- mented to protect customers, but they have also exacerbated mistrust in the marketplace and made customer loyalty harder than ever to earn and maintain. Creating customer loyalty in the energy sector has been, and always will be, more of a challenge than it is in the high street. How- ever, with utilities' increasing focus on trans- forming the customer experience, loyalty is becoming an important target and measure of success for the sector. A recent report from EY said: "Utilities must improve their relationships with cus- tomers to survive in the future – or risk los- ing out to new opportunistic competitors who could demand higher margins." Data is key to doing this well, it is key to turning exemplary customer relationships into financial reward. Recent technological developments have led to an explosion of customer channels and touchpoints and have created rich sources of data to be mined. Used correctly, businesses will be able to pull out insights from this data, improving their ability to identify and respond to customer preferences with tar- geted offers and engagement. Without the proper data infrastructure, however, they will fail to establish a clear view of customer data, let alone use it to enhance their overall brand experience. Using the data to understand what the multi-channel environment means to each individual is paramount to keeping customer experience consistent and encouraging that customer further along the purchase journey. It is one thing for energy providers to rec- ognise a customer's desire to communicate through a variety of channels. What is more important is ensuring the multiple interac- tions, and resulting data, are understood and held in one place. With providers running multiple cam- paigns of various lengths at one time, invest- ing in a robust data management system is crucial if the data being generated for each campaign is going to create value for the brand. It will also support a consistent cus- tomer experience and build a foundation for loyalty. The retail and travel industries have championed the application data to improve customer loyalty. In these highly competitive industries, even the smallest detail can mean the difference between gaining the purchase or not. While loyalty and promotional cam- paigns require a different approach in the utility industry, the same theories and best practice can be applied. Retailers, and supermarkets in particu- lar, pioneered data collection via a loyalty card, and have evolved with developments to invest in systems that provide them with a complete view of the customer, no matter how they are interacting. These systems sup- port data intelligence, which can be acted upon strategically. In showing that they understand how and when that customer likes to shop, and what they are purchasing, retailers can deliver personalised offers that are likely to result in more future business. Promotional marketing has enormous potential to add value, but success can prove elusive unless the right steps are taken. Promotional marketing needs to be carefully managed and resourced if it is to positively engage consumers. Starting a cam- paign without a complete view of customer journeys across your business can quickly lead to trouble and, ultimately, drive up switching rates away from your business. No matter what the engagement is, the customer experience with the brand must be consistent throughout. Whether they are interacting through the website, over the phone or email, the experience should align with the tone of your brand and the values behind it. Delivering this means undertaking detailed training for all employees who might be viewed as brand guardians. They need to be aware of reg- ulations, which might impact their ability to offer services, and have a clear framework for best practice in engaging with customers. Within this framework and field of knowl- edge, they can then leverage brand value to ensure the customer service they offer is con- sistent and positive. A large part of effective data management involves supporting two-way communica- tions. This is crucial if the brand experience is going to be truly joined-up. The data generated each time a customer is interacting with the provider must be fed back into a central customer relationship management system so that marketers can use this information to inform the next inter- action. Without this constantly up-to-date detail to couch interactions in, it is almost impossible to create continuity and granu- lar relevance in your communications with a customer and to earn their loyalty. All customers, regardless of the sector, have higher expectations of their business interactions than ever before. Ofgem's inter- ventions to protect customer from irrespon- sible data use cannot deter utilities from responding to these expectations. Instead, companies must find ways to comply while still making the most of tech- nology and data to forge competitive advan- tage. If successful they will gain a far deeper understanding into the customer and can act on this insight to create a joined- up experi- ence that encourages long-term loyalty. Joanne Varey, managing director at Granby Marketing Chasing customer loyalty While abiding by regulations to protect customers from irresponsible marketing, utilities must embrace technology to earn customer loyalty, says Joanne Varey. "Using data to understand what the multi-channel environment means to each individual is paramount"