Why digital channels are essential for strengthening utility customer loyalty

The utilities industry is in challenging times. Deregulation is intensifying competition, more enhanced technology is being presented and customers have distinct, new expectations.

Over the past few months, customer experience has become ever-more important. Many people across the UK are battling with financial struggles sparked by the pandemic, and so, are naturally looking to cut costs. Utility bills fall within the cutting category. Now, the most important thing for utilities providers to focus on is their customers, and critically, how they communicate and serve them. Good customer experience will stand the best chance of maintaining loyalty, and ultimately, reducing churn.

But, what exactly are the steps towards positive digital transformation? And how can change in customer experience bring more flexibility?

Digital expectations in the utilities industry

Utilities customers have strong expectations for a more modern experience: 73 per cent of them want more digital options to interact with their provider. Customers are increasingly used to commodity in all areas of their lives and expect the same for their utility needs.

One of the massive changes in the industry is deregulation, allowing customers to switch more easily. Last year, 20 per cent of customers in the UK moved to another energy supplier. According to one study, price remains the main reason for this change. Another major reason for 33 per cent of customers choosing to switch is poor customer service. When prices are aligned between competitors, customer experience becomes the main differentiator. As outlined by Deloitte, it becomes essential to “provide options, be connected, and allow customers more control over their energy use”.

With increased competition in a commoditised market, customers want to minimise their time and efforts in interacting with a provider. If the experience is not up to their expectations, they can easily move to a competitor.

How to transform customer experience with innovative channels

Bearing in mind that 44 per cent of energy consumers say they have no particular interest in interacting with their providers, it may seem arduous to increase customer engagement through digital channels. The three main reasons for contacting a utilities company are billing enquiries, meter reading or outage and supply issue.

With digital channels, these interactions offer utilities companies opportunities to differentiate and reinforce their relationship with customers. By adopting channels already used in day-to-day life, companies can develop a better knowledge of customers and reduce churn.

One of the fastest-growing channels is messaging, with apps such as Facebook Messenger and WhatsApp. Used daily by 80 per cent of adults, they allow them to contact customer service in an asynchronous way, removing the need to wait on the phone.

Digital can simplify the experience at key moments:

• Billing enquiries: for privacy reasons, checking a bill online is often a complex operation. With digital channels, utilities providers are able to simplify this process, by giving a snapshot of the bill and clarify the contact method to ask questions. With the importance of price, sending information about high-bill alerts can also have a significant impact to decrease churn.
• Meter reading: as a common operation, meter reading usually requires a physical presence, or to go through traditional channels such as phone. By using digital channels such as messaging, customers can actually do the reading themselves, and send the number or a picture.
• Outage and supply: phone remains essential for urgent situations, but it can be combined with messaging. Depending on the urgency, some customers will prefer using digital channels and in case of peaks of enquiries, the activity will be easier to manage for the company.

Using digital channels to solve these fundamental enquiries can have a great impact on improving customer experience.

Moving away from legacy systems

One of the common roadblocks for utilities companies is the reliance on traditional systems, limiting their ability to innovate. This means they’re often not able to adopt new channels expected by customers.

To match customers’ expectations, they need to move away from legacy systems and break silos. Within customer service, that means moving from an organisation based on channels to one based on skills.

Adopting an omni-digital approach allows businesses to communicate more efficiently with customers. One of the major benefits is the flexibility it brings. Implementation is faster and more efficient, and customers are capable of contacting providers on the go, in any situation.

The move to the cloud has already started and will accelerate in the next few years. 74 per cent of utilities companies plan to increase their investment in the cloud in the next five years, and the key driver is improving customer experience.

Conclusion

Innovation plays a crucial role in future-proofing utilities businesses, and developing excellent customer experience is key. Business leaders need to bear in mind that, nowadays, switching between providers is incredibly easy, and the only way to maintain customers is to continuously adapt. We also need to anticipate the effects of the incoming recession, and put plans in place to ensure we’re ultra-connected with customers who might be sitting on the fence.

In this context, offering easy engagement channels both allows businesses to win market share and reduce churn. With more concerns for eco-friendly consumption and the ability to control it, utilities companies can build on this increased interest and reinforce their relationship with customers.