Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/807744
Sponsored report 22 | 7TH - 13TH APRIL 2017 | UTILITY WEEK Brought to you in association with I t would be hard to find a utility company of any sort whose corporate rhetoric does not speak of improving customer experi- ence. Yet when it comes to using innovation to make that happen, not everyone is up to speed. "The culture is part of the problem – the ways of working at these organisations," says Steve Jennings, UK power and utilities lead at PwC. "The incumbents have come from an environment where you didn't need to be innovative to succeed. Now innovation is a core capability that's required of them." Whether it's smart technology, improved and more streamlined contact centre inter- actions, automatic voice recognition (AVR) systems, or the "gamification" of energy and water usage to encourage consumers to cut down, utilities are striving to find novel ways to attract new business and improve the experience of those they already serve. Furthermore, with vulnerable customers representing an ever-larger group, enabling them through the innovative use of technol- ogy could be both a boost for business and create genuine social change. But what are utility companies doing on the ground to make their innovation efforts genuinely customer-led – sensitive to their behaviours, needs and desires? What more can be done? And what are the barriers, both for customers and for the innovators themselves? Overcoming resistance On the customer side, a PwC report from May 2016 carries a stark message. The con- sultants' research showed that, at the time, 72 per cent of people believed they were unlikely to introduce smart energy technol- ogy into their homes in the next five years. However, once the technology is there, cus- tomer experience improves, with 81 per cent of people noticing a positive impact from smart heating and 95 per cent seeing benefits as a result of installing smart appliances. "There are a relatively small number of people who are prepared to pay for this technology, but a high number who, once they have it, think it's fantastic," says Jennings. "Overcoming that resistance is key. Once you have a delighted customer, you have the opportunity to monetise that delight." From a business point of view, the chal- lenge boils down to something more prosaic: boosting the bottom line and justifying the kind of investment needed. "Everyone is asking what more they can do," says Jennings. "How can I grow revenue and make the most of the tech opportunities that are available through distributed gen- eration, connected homes, smart devices? Or how can I be more cost efficient?" Jennings gives an example of a way in which some companies get it wrong: "One of the common misconceptions is that by mov- ing people to digital channels, your costs of service will go down. What it actually means is the type of queries you will deal with will be different." When it comes to vulnerable customers, overcoming the resistance to take up techno- logical innovation is even harder, according to Jennings. "It's more difficult as they tend to be less engaged. Intuitively you have to say if the general population is reluctant to spend to Insight Report: Enabling customer-led innovation Utilities want to innovate in a way that benefits and engages their customers. But this ambition faces challenges shows a study from Utility Week in association with Wipro. First Utility's My Energy Operating as either a feature on our website or mobile app, My Energy gives customers person- alised, relevant insights into their usage and how it compares with others, as well as energy efficiency tips to let them know what they are using and how much they are spending. It incorporates 'widgets' that allow customers to gauge usage against similar homes and see which appliances are the most efficient/energy hungry. First Utility describes the project as "very much a joint effort" with its customers, creating a constantly evolving database. "From the very beginning we were clear that to be a success it needed to have customer input and feedback embedded in its DNA, which is why we have a number of approaches to engage our customers," the company explains. As with UK Power Networks' emergency pack (see box), My Energy was developed through a series of focus groups to understand how customers think about energy efficiency. In addition, First Utility has created an 'Alpha Group' of highly engaged customers who act as testers for new products and innovations. In a further bid to draw out more customer engagement, every page and widget on My Energy features a feedback button to prompt users to say what they like and what they would like to see more or less of. One feature which came from customer feedback shows smart meter customers their usage by hour in a heat map of the week. It was developed in response to demand for a simple way to view detailed usage information and times of peak consumption. A further innovative feature of the app is that it provides the option of showing informa- tion about usage in monetary form, showing customers how much they've spent on the assumption that kilowatt hours are a confusing concept. So far, My Energy has engaged with 575,000 customers, more than half of First Utility's cus- tomer base. That level of engagement helps the company to "build a very robust model around comparison data".