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Utility Week 18th May 2018

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26 | 18TH - 24TH MAY 2018 | UTILITY WEEK Customers Market view H istorically, the utilities sector has fallen behind other industries, such as banking and retail, when it comes to customer engagement. For the water utili- ties, this low performance may have been the result of the regional monopolies each com- pany held. The tide is now shiing though, as regulators implement new expectations of customer engagement. The Institute of Customer Service recently reported the findings of the UK Customer Satisfaction Index (UKCSI), which highlight the fact that energy and water utility compa- nies are lagging behind in cross-sector cus- tomer satisfaction scores. It is the first year since 2014 that the satisfaction score for utili- ties has flat-lined, with a score of 74.4 out of 100 for utilities, which is below the all-sector average of 78.1. In the past, "customer engagement" for water utility companies mostly involved bill payments and reports or complaints, and that was it. Today it is much more impor- tant to bring water companies into the 21st century, and ensure customer interactions are well thought through. New technologies and techniques for interacting with data are creating opportunities to improve customer engagement. Smart meters The energy sector hailed the introduction of smart meters, but smart meters alone do not change customer satisfaction overall. It might help customers access their con- sumption data more easily and frequently, but unless that data is framed with useful insights, helping them take control of their consumption, it is unlikely to improve the overall customer experience. This is espe- cially the case with consumers that are about to be hit with a higher bill than usual. The same goes for introducing new ways to pay a bill, or using social media as an out- post for complaints. They might help utilities facilitate interactions with customers, but without any substantial content, they won't necessarily improve customer satisfaction. Ofwat, the UK water regulator, is moni- toring the situation closely with the Service Incentive Mechanism (SIM). Aer 2020 the SIM will be renamed C-MeX (Customer Meas- ure of Experience) to monitor the satisfac- tion of all water utility customers, not just the ones who connect with the company to discuss their water bill, complain or report a leak. This means a customer has the power to comment on a water utility's entire customer engagement strategy – which means water utilities have to be proactive, rather than reactive, to complaints. If customer satisfaction is low overall, penal- ties for the water utili- ties will ensue. We are at the start of new customer engagement strate- gies for water utility companies. So how can water utilities take advantage of the improvements in metering technology? To deliver true customer engagement, you need a combination of behavioural sci- ence and data science to generate proactive and very personalised insights for custom- ers about their water consumption and bills. These insights can help build a mutually informative conversation between the com- pany and its customers. These conversations are not just an exchange of words, but are also an exchange of content and ideas. It is essentially a feed- back loop in which companies and their customers change their actions as a result of input from one another. If you adopt techniques derived from behavioural and data science that uses, for example, social norm messaging, cognitive dissonance, goal pursuit or incentives, you create the opportunity to communicate and engage with consumers differently. By combining techniques from behav- ioural and data science, companies can gain a better understanding of their individual customers and identify the best ways to engage with their customers on the issues that matter most to them. One popular way to engage with a con- sumer is by combining it with "social norm" messaging, helping consumers better understand their consumption by bench- marking it against the average consumption of similar households in their area. This creates social awareness about what con- stitutes reasonable consumption – so there are no surprises when the bill arrives. Giving consumers advice and solutions in advance of their pain points of interact- ing with utilities can help motivate them to adjust their behaviour to mitigate the prob- lem. By personalising that advice, consumers can relate to that infor- mation easily, and are more likely to have a heightened social awareness of sustain- ability, as well as how to change their hab- its. This gives them an incentive to ask the right questions, and to be more sustainable consumers. Digital options Consumers have many different digital options to interact with brands: through email, mobile apps and the web. With data and behavioural science added to a water utility's digital engagement proposition, a water utility could triple the likelihood of customers opening water utility emails, for example. In terms of click-through rates to more content, you can quadruple them. This means the right conversations will begin if people start to get the right types of insights and messages, learn from them and subse- quently see the value in them. With new changes in regulation, emerg- ing technologies and a renewed call for improvement in customer satisfaction driven by other industries, it is now time to change the water sector's narrative on customer engagement. Julien Lancha, chief customer officer, Advizzo Engagement expectations Water companies have for years faced a customer engagement crisis. Regulators are now demanding more meaningful engagement than sending bills and responding to complaints, says Julien Lancha. "By combining techniques from behavioural and data science, companies can gain a better understanding of their individual customers and identify the best ways to engage with their customers on the issues that matter most to them."

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