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UTILITY Week 17th July 2015

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UTILITY WEEK | 17TH - 23RD JULY 2015 | 27 Customers Market view T he UK energy sector is undergoing far- reaching change, as the balance of power between consumers and sup- pliers changes. This change comes not sim- ply from the expansion of regulatory policy and the pressures surrounding energy sup- ply, but from deep-seated changes in the ways consumers interact in a digital econ- omy and from technologies that are chang- ing the dynamics of markets and customer experiences. The utilities sector in the UK ranks as the lowest performing industry when it comes to delivering customer experience excellence, not least because energy is in many ways a distress purchase that lacks the theatre of buying a consumer product such as an iPad. However, when compared with the US mar- ketplace, reported in KPMG Nunwood's 2015 Learning from the USA's Customer Experience Leaders, the US utilities sector outperformed the UK by 14 per cent. There are a number of reasons for this, including the difference in maturity of the respective smart energy programmes in each country, but it is also apparent that in the US, suppliers focus on creating and main- taining long-term customer relationships and not short-term sales. US utilities thrive oen where UK com- panies fall short in making the most of an opportunity. In the US, retailers focus a lot of time on turning an issue into a positive cus- tomer experience. This comment from a Florida Power & Light customer is indicative of this – and rep- resents more of a norm than similar positive reviews which might be reported in the UK: "We lost our power in a storm and they tried to keep us informed regarding the progress in restoring power. They did a very good job in getting us reconnected quickly." UK brands also oen falter in the later stages of the customer journey. Notwith- standing the differing responsibilities of distribution network operators and energy suppliers in the US, consumers' percep- tions, as a whole, seem markedly different over there. But how much is this to do with culture? KPMG Nunwood's recent US Customer Experience Excellence Report showed that the UK utilities sector was not alone in hav- ing a low relative performance on customer engagement when compared with the US. Across sectors, US brands were on average +5 per cent better than UK brands in terms of delivering customer experience. Whether we accept and embrace cus- tomer experience best practice wholesale from our American counterparts or not, we can nevertheless use the insights in this report to build meaningful customer rela- tionships in many of the same ways they do. The first thing to do is get your customer experience strategy on the front foot – start- ing with brands, values and beliefs, not capabilities, products and competitors. It must be led and owned at the top table, engage and enthuse the wider business, and be designed to differentiate on the back of excellence, not simply reflect what custom- ers expect or need. The second lesson is to use customer jour- ney mapping and experience design to drive change. Understanding journeys, the root cause diagnostics that go with them, and the pivotal "moments of truth" from the cus- tomer's perspective, can be powerful ways to manage and execute change. Innovations managed around gaps or constraints in the customer journey can yield real premiums in driving change. Aer all, if it is the cus- tomer telling the organisation what needs to change, it becomes hard to resist. Debates about which metric to focus on go only so far, so pick a metric and move on. Reporting and measurement should be pre- scriptive of customer needs, not descriptive of feedback. This approach offers the pos- sibility of building that all-important bridge between insight and action, avoiding the chasm of drowning in the depths of analysis. Lastly, use culture and employee optimi- sation to shape customer excellence. Culture and behaviours dictate customer experience, and employees come before everything. This means combining "voice of the customer" and employee programmes and working to create a single model for behaviours, values and customer experience principles. Far-reaching changes in distribution and supply enabled by smart technologies, together with a fundamental shi in the con- sumer landscape, are creating the conditions for disruption and disintermediation. Brands in the UK have the opportunity to grab cus- tomer experience and make it work in the same way the US has done. This will enable them to compete effectively in a consumer landscape where value chains are breaking up and reforming in new ways. Chris Nutt, business development director, KPMG Nunwood Experience counts Energy may be a commodity product, but enhancing the customer experience can enable a utility company to stand out from the herd, as lessons from the US demonstrate, says Chris Nutt. PERCENTAGE DIFFERENCE IN US AND UK SECTOR CUSTOMER EXPERIENCE EXCELLENCE SCORES Source: KPMG Nunwood 3% Financial services Travel & leisure Entertainment & hotels Telecoms Utilities Restaurants & fast food Non-food retail Grocery retail Logistics 8% 4% 0% 14% 9% 4% 6% 9% +6% +2% +4% -6% -9% -2% -1% ➜ ➜ ➜ ➜ ➜ ➜ ➜ - 0% 0% -

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