Utility Week

26 | 29TH JUNE - 5TH JULY 2018 | UTILITY WEEK Customers Analysis E ight years ago the concept of customer engagement swept through the utili- ties industry like a tornado, leaving no company unaffected in its wake. And as a result, you will have used the word engage- ment in each and every customer-related meeting since. The reason the word remains so persis- tently on the table and in the boardroom is that utilities of all persuasions are consist- ently lambasted in the national press for not engaging their customers enough. His- torically, the utilities sector has fallen behind other industries (such as banking and retail) when it comes to this area. For water utilities, this low performance may have been due to the regional monopolies each company held. But as regulators continue to implement new expectations of customer engagement, this may all be about to change. Customer engagement of the past didn't go much further than bill payments and complaints. But new technology and data opportunities mean this is no longer enough – consumers can now engage with compa- nies of every ilk at the touch of a button, and utilities must keep step. "Issues such as the complexity of the reg- ulatory framework and the continued ability of suppliers to engage in price discrimination have been significant factors in disengage- ment," says Justin Haines, customer service director at Ovo, which was founded in 2009 in response to the lack of engagement in the industry. It topped 11 of the 12 award catego- ries at the Uswitch Energy Awards for three years running and achieved a 93 per cent customer satisfaction score (the highest ever score in the poll's ten-year history). However, with a customer base made up entirely of switchers, he says the company can't afford to rest on its laurels: "We've always known that if we don't work hard enough to keep them, our customers will vote with their feet. Customers' needs evolve constantly, and there's no one answer to stimulate engagement – it's about being reactive and responsive." In response to this challenge, efforts to overturn the wave of negative sentiment have been broad-ranging and hugely varied, but the challenge remains. If this was in any doubt, the Institute of Customer Service recently reported its find- ings from the UK Customer Satisfaction Index (UKCSI), highlighting that energy and water utility companies are lagging behind in cross-sector cus- tomer satisfaction scores. It is the first year since 2014 that the satisfaction score for utilities 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 rest of this article, we outline some of the key issues surrounding engagement and talk to industry delegates about how they're tackling them. Identifying and engaging with vulnerable customers Any campaign engaging vulnerable audi- ences faces a challenge, because there is no cut-and-dried definition of vulnerability and as such no silver bullet when it comes to engaging with those that fall into this bracket. In fact, as Ofwat rightly noted in a report on the subject, stakeholders believe specific definitions are not useful because they prevent companies from responding with operational flexibility. But broad definitions don't deliver the insight the industry needs to make informed choices around the right strategies and tac- tics to engage with everyone, including vul- nerable groups. It's therefore a question of identifying the potential barriers to engage- ment that are relevant to the task in hand. In the case of utilities engaging with con- sumers effectively, this means being human and talking to people in terms of "worth, benefit and quality of life", according to Smart Energy GB. "This doesn't mean that financial objectives are unimportant, but it does mean that additional investment and ingenuity may be needed to reap a wider societal and financial benefit." In terms of engagement, vulnerable audiences can be more likely to resist, and frequently have other practical or social concerns that prevent them from engaging with their utility companies. So companies seeking to reach vulnerable audiences need to understand the quality of their current experience and the barriers to them being responsive. A smart solution? New technologies and new market entrants continue to deliver innovations that offer to make consumer choices easier and automate their engagement with utilities. These have the potential, and cer- tainly the intent, of cutting out the tradi- tional utility business in order to deliver an enhanced customer experience. Questions remain, though, around whether these will mean more customers will become energy self-sufficient and what this means for traditional utilities. The immediate answer would appear to be integration, with smart technologies for example. But smart tech alone will not change customer engagement. It might help customers access their consumption data easily and more oen, but unless that data is framed with useful, easily understandable insights that help consumers take control of their consumption, smart tech is unlikely to be the standalone answer. Julien Lancha, chief customer officer, Advizzo, says: "This is especially the case with consumers who are about to be hit with a higher bill than usual. The same goes for introducing new ways to pay a bill, or using Congratulations on your engagement? For utilities, trying to get customers to engage is proving a hard nut to crack, especially for incumbents. Alice Cooke looks at the efforts being made by the industry to get customers on board. Smart tech alone will not change customer engagement

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