The new utilities consumer: a brave new world of digital engagement

Jillian Ambrose reports from the Utility Week Keynote conference following a roundtable debate on the challenges posed by increasingly digitally-oriented utilities consumers.

Leaders in the energy and water industries are in little doubt that the needs and expectations of its customers are shifting in an increasingly digital age.

But far from offering a sure fire means of engaging with the public, companies will need to navigate a new set of challenges to take advantage of emerging opportunities. Else they risk losing out to more innovative, tech-savvy rivals.

Key to the debate is engagement. Opting for emails rather than mail, online rather than phoneline help, and metered rather than estimated billings could help encourage greater customer engagement with their supplier. But underpinning this is a continued need for innovative service offerings which keep pace with consumers’ evolving preferences from their supplier. And the risk that new engagement strategies, badly handled, could further alienate disgruntled customers.

The future of innovation in technology and service offerings may remain uncertain, but utilities can be sure that the way that these fresh ideas are brought to the fore is as important as the ideas themselves.

In the roundtable discussion, leading utilities specialists from water companies, big six suppliers and utilities analysts agreed that the future path for consumer offerings will need to take into account the risks and opportunities of the consumer in three main facets:

1. The customer as a digital consumer
2. The customer as a service user
3. The customer as a person

The customer as a digital consumer:

Customers are able to procure more and more services via digital channels, and for many the ease and efficiency of a more digital world means the utilities sector would do well to appeal to a new online generation by moving their engagement towards an increasingly digital format. One delegate noted, however, that as modern life becomes ever more inundated with digital information jumping on this particular bandwagon could serve to dull the engagement a firm has with its customers by blending into a digital blur. There may be value in cherry-picking which services are handled digitally, and which continue to require a human touch. This would also help not to alienate those customers who, for varying reasons, do not prefer a digital approach.

Aside from communication and billing customers are likely to see their relationship with energy and water efficiency evolve with the increased use of smart metering. The roundtable was divided between those who believe that the novelty of metering may soon be lost of those who become ‘desensitized’ to their useage patterns and those who believe that the more information available to consumer could stoke the fire of resentment against their providers. Both camps agree though that educating consumers on energy use will be key to help consumer become more energy-literate and therefore more engaged with their supplier. One option is to offer consumers the chance to set monthly targets for energy use with frequent digital alerts programmed to keep users up to date on their progress. This is currently offered by a non-supplier at a modest fee, but this initiative could form one of many new services which suppliers may offer.

The customer as a service user:

Simply supplying gas, electricity and water is unlikely to remain a sustainable offering for the new utilities consumer, the roundtable agreed.

Already British Gas and Google offer remote intelligent home heating solutions while emerging new entrants including Flow Energy offering combined-heat and power boilers. The trend is a recognition that the challenge of engaging with consumers and their solutions needs can help to create opportunities for suppliers. One roundtable delegate, formerly in financial services, recalled being asked to “get rid of frequent callers” which were costing the business time and money. Rather than tackling the issue as a ‘problem’ the delegate found opportunity in understanding the reason behind the frequent calls and delivering a solutions offering which a) reduced expensive call centre handling, and b) helped to build trust by delivering tangible benefits to the customer base. Similarly the previously ‘less desirable’ pre-payment energy market is fast becoming an area where new market entrants are keen to gain market share because a differentiated service offering not only engages customers more meaningfully but also provides opportunites for suppliers to make inroads.

The customer as a person:

But underpinning the drive towards innovative solutions and digital engagement channels utilities still need to address the problem of appealing to people through a unified ‘personality’. The roundtable echoed the thoughts shared earlier in the day by former John Lewis boss Andrew McMillen who said the success of airlines such as British Airways and Virgin comes down to clearly defined brand personalities which foster an individual relationship with consumers despite the fact that they offer near identical services.

“It’s not what they do, it’s how they do it”, he said. And utilities have in many ways been slow to break out of a ‘predictable’ stance as a consistent service supplier into a ‘brand’ which differentiates itself in ways that may be intabgible but are nonetheless valued by customers. The example of the Innocent smoothie company was cited in the roundtable as a clear example of the consumer trend of informal customer communication which utilities have failed to tap into. Late payment notices remain cold and abrasive despite a wider trend in corporations communicating on a more personal level, for example, which can only serve to alienate customers just when a better relationship would arguably help.

Utilities stand poised to gain from the opportunities presented by the changing customer profile but will need to shrug off the ‘same old’ approach to communications and service offerings to find a niche which is based not only on what the customer wants, but how they want it too.