Simon Coulbeck - Managing Director, Specialist Sectors, looks at the most significant industry challenges and opportunities within UK Utilities and predicts some key areas that will be on the sector’s agenda in 2023. 

Proactive vulnerability detection 

As inflation, energy costs, and the general cost of living continues to rise, many people are struggling to make ends meet, causing more issues with vulnerability nationwide. Vulnerability has also become a much broader concern for the utilities sector, not only encompassing challenges with finance but also with health, age, and many more.  

Moving into 2023, suppliers in the utilities industry need to proactively identify these potentially vulnerable customers and ensure they receive the appropriate level of service and support.  

Previously, providers would depend on the priority service register (PSR) to achieve this, but it is no longer suitable. In addition, the database is not managed effectively and does not help to create proactive interventions in customer journeys in its analogue form, so providers must begin to mobilise their own data as soon as possible.    

The Office of Gas and Electricity Markets (OFGEM) frequently raised this vulnerability issue with suppliers in 2022, so we hope to see more proactive innovation in this area in 2023.  

More effective use of data 

Data, data management, governance, and data science will continue to be critical enablers of transformation for utilities providers over the next few years.  

First and foremost, the effective use of data is essential to detecting customer vulnerability. Moreover, when accompanied by behavioural science insights, data can inform customer experience and journey design.  

The industry can also use data to contribute to net zero by helping to change customers’ consumption behaviours with gas, electricity, and water. We take energy and water for granted in the UK, but they are not in endless supply. For example, without adequate water efficiency action, the UK could be hit by major water shortages by 2050 (over and above some of the seasonal restrictions we sometimes see already), so it’s down to the utilities sector to promote and ensure responsible consumption by leveraging data.  

Building customer trust in utilities 

Trust in the utilities sector had been low for many years, and it continues to be the case. As a result, when customers have problems with their water, gas, and electricity, they are not turning to their utility providers for help but looking elsewhere.  

In a study by Utility Week, 77% of energy and 58% of water customers stated that price stability was the most important thing to them, while around 20% said that sustainability and net zero should be priorities for utilities businesses. However, less than a third (27%) acknowledge the difficulty of the sector achieving these outcomes, and only 7% want new services from energy companies and 12.5% from water providers.   

These findings highlight that suppliers must focus on removing detractors, communicating with their customers, and rebuilding trust from the ground up. A great place to start is through billing transparency, self-serve and self-management tools, and broader social media and digital engagement campaigns.  

Ultimately, building customer confidence will be the key to success in 2023, so utilities providers must combine data and technology with proactive engagement, customer journey mapping, and exceptional customer experience, designed around supporting and improving people’s lives.