For UK Utilities, CX-driven data is critical to support high-priority customers
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As the UK’s cost of living rises in tandem with global inflation, people everywhere are looking for ways to reduce their expenditure, with many turning to their energy and utility providers for help.
The energy industry is doing a good job supporting its customers, with initiatives like debt management, payment plans, and smart meters becoming indispensable for vulnerable customers in low-income households — whom I refer to as high-priority customers.
Still, there are plenty more ways that utility companies can improve the customer experience (CX) while delivering the positive outcomes that people are looking for in these challenging times. For instance, while a considerable percentage of the population are either digitally excluded, require financial support, or both, there’s an opportunity to improve these customers' lives with the right blend of data, technology, and CX enhancements.
In this article, I’ll explore some of the critical challenges that utility companies and their customers face in times of inflation, digital disruption, climate change, and covid while sharing some innovative ways to enhance CX and proactively support high-priority customers.
UK Inflation Challenges
The UK’s cost of living has been steadily rising since the start of 2021, but year-on-year consumer prices rose 5.4% in December, representing the highest inflation rate since 1992. In the same period, food and non-alcoholic drink prices were up by 4.2%, with further increases expected in early 2022.
Regarding last year’s household energy tariffs, gas prices increased by 28% and electricity by 19% between January and November. Higher wholesale costs will also spark a rise in the energy price cap when April comes around, pushing the government to announce a £350 support scheme for every household in the UK. Still, according to Paul Johnson, Director of the Influential Institute for Fiscal Studies, the average customer is likely to be £400 worse off than in 2021 due to tax rises and inflation.
For high-priority customers, energy takes up a large proportion of their monthly outgoings, so these price increases substantially affect this part of society and hinder people's ability to afford essential goods and services. On top of that, stagnant wages, higher national insurance contributions, changes to income tax, and the withdrawal of the £20 universal credit uplift are all expected to squeeze household incomes further this year, potentially creating a very different commercial environment for utility companies in the UK.
Notably, as concerns about inflation grow, energy and utility companies need to take a proactive approach to find high-priority customers and assure them that help is available.
Increase in Vulnerable Customers
Against the backdrop of higher costs countrywide, more people are expected to find themselves in difficult or vulnerable situations in 2022.
In 2021, the Financial Conduct Authority (FCA) released a report that characterises vulnerable individuals as those in poor health, people experiencing negative life events like redundancy and reduced working hours, and those with low financial resilience. With inflation on the rise, these factors are at risk of increasing nationwide.
The Financial Lives 2020 survey shows that 27.7 million adults in the UK now have characteristics of vulnerability, which can limit people's ability to make good decisions and make them susceptible to accepting unfavourable terms with their providers.
While households earning less than £15,000 annual income were most likely to show characteristics of vulnerability last year, households earning more than £50,000 had the most significant proportionate increase in having these characteristics, signifying that inflation and pandemic-related issues are having a broader economic impact than before.
Before the pandemic, it was common to label elderly customers in the “vulnerable” category, but young people are now just as likely to require financial support in post-covid times. For example, the FCA report found that almost two-thirds of UK adults aged 18-34 had one or more characteristics of vulnerability in October 2020, rising from less than half in February.
Frankly, I’m not a huge fan of the term “vulnerable”, as it’s become more of a catch-all label than an accurate representation of a particular demographic. Instead, I prefer to think of people in challenging financial situations as high-priority customers. However, it’s not only economic challenges holding these customers back — many still have no access to the digital and communication tools we take for granted today.
Digital Exclusion in the Age of Covid
Despite a nationwide government push to ensure at least 85% of UK premises have access to gigabit broadband by 2025, 1.5 million homes were still entirely offline by the end of 2021, according to Ofcom. Those without internet access were most likely over 65, on low incomes, or financially vulnerable.
Life offline is undoubtedly disempowering in the age of remote work and digital communication, leaving many people without the means to find employment or easily engage with their suppliers when there is an issue.
Innovations like smart meters have given people in the UK a reason to engage with their gas and electricity usage, in many cases reducing their average consumption by 10%, which could be transformational for the country if the whole population used them. However, smart meters require broadband connections, ruling out the aforementioned 1.5 million homes. They also require a rudimentary level of digital expertise, ruling out a further 21% of the population who don’t have the essential digital skills needed for day-to-day life, according to the Lloyds Consumer Digital Index 2021.
The unfortunate irony is self-serve and online tariffs are often the cheapest option, but their exclusive online availability makes them inaccessible to many of the customers who are most likely to be hunting for more affordable energy bills.
Along with making these customers the highest priority for utility providers, brands need to find ways to connect with people without broadband, smartphones, tablets, and other digital tools and support them effectively.
What are Utility Providers Doing to Help?
Along with the smart meters I mentioned before, utility providers are already initiating financial programs to support high-priority customers.
British Gas, for instance, helped over 300,000 people manage their debt in 2021 and launched a £2 million fund to help customers with their winter energy bills. The company also formed the British Gas Energy Trust to offer energy debt advice and support to those who need it.
The energy industry is also working with the government to make £2 million worth of emergency payments available to those "severely impacted by the fuel crisis", according to the Department for Communities. Plus, the government has put aside another £500 million to help people pay their energy bills, particularly heating bills, as well as cover food and clothing expenses for those who need financial aid.
Financial support is a great starting point, but it’s not the only way to help. There are several technologies and customer experience strategies that will give utility companies the ability to find, support, and ultimately retain their high-priority customers.
How Smart Use of Data and Technology Can Help Further
Data is the key to understanding the challenges behind customer vulnerability and the affordability of essential services. It helps utility companies understand what their customers want and deliver it effortlessly, on time, and in their preferred channel.
For most digitally excluded customers, the telephone is likely their primary source of communication. As such, utility organisations should focus on implementing speech analytics platforms within their customer experience operations. These tools can interpret conversation topics, sentiment, and emotions during every interaction, allowing you to target your resources and resolve customer issues at the exact moment.
For instance, if a customer calls in to request a weekly pay scheme, or asks if they can pay at the Post Office, or reduce their bill by a couple of pounds, speech analytics can pick up on these phrases as an indication of vulnerability and alert advisors on the situation. Contact centre advisors must also have the ability to recognise and support high-priority customers, so adequate training on empathy and social perception is essential.
We can use the data gathered by voice analytics to design effortless journeys that deliver precisely what the customer needs, capturing the benefits of an improved customer experience. In addition, it allows us to create an accurate end-to-end view of how customers are interacting with providers, with no blind spots, so we can make good product and service decisions using all the facts.
Ultimately, the customer's needs should be the key driver of the proposition on offer and the service provided, so understanding those needs is the top priority.
Where to Start?
Electric, gas, power and water companies will need to prioritise operational improvement plans and customer journey transformation to overcome the many CX challenges in 2022, placing the customer at the core of all critical decisions. Here are some areas to focus on.
Getting the customer journey right
Quickly mobilising teams that can flex in line with customer demand and striking the right balance of digital, self-serve technologies with more profound, more human relationships will be essential.
Implementing digitised end-to-end processes
Digital transformation can reduce operational and customer costs while providing the capabilities to leverage actionable data and insights to ensure the best possible CX. A complete understanding of digitalised end-to-end journeys and the associated user experience is crucial to guaranteeing transformative digital channel design.
The utilisation of data and analytics
Understanding how to analyse and interpret customer data, and creating actionable insights from it, should be a critical strategic goal for the sector in 2022. The ability to identify vulnerable, high-priority customers and provide them with fast-tracking to a skilled front line advisor will form a crucial part of delivering a supportive, empathetic customer experience.
Developing human capability
With the increase in digital journeys, brands need to develop a human capability to manage more complex situations, where human contact and connection is required to ensure a satisfactory customer experience. These scenarios require a ruthless focus on developing highly skilled and knowledgeable service teams that can effectively interact with customers and solve their problems.
Hayley Monks is Gobeyond Partners’ Managing Director for the Utilities sector.
Hayley previously held a wide range of senior executive roles in British Gas, before founding Think, Inspire & Create (TICL) in 2015, a business process improvement consultancy with a unique visual approach to helping clients to re-engineer and re-shape their organisations. Hayley is also co-founder of the Women’s Utilities Network and is passionate about connecting, supporting and developing women in the sector.