Energy retailers now need to accelerate their digital transformation to radically alter their customer experience or risk losing customers to competitors. A 2012 study by Capgemini and the Massachusets Institute of Technology found that only 20% of utilities companies are Digirati and are ‘Conservative’ as a sector. We describe here how changing customer expectations and behaviours mean that the emphasis is now on energy retailers to accelerate the rollout of digital channels.

The context: Energy retailers are currently managing the shift from traditional channels (face-to-face, paper and call centre, supported by a billing engine) to a digital world, with the associated opportunities for online interaction and customer self-service.

  • These new channels include web (mobile, tablet and PC-based), mobile apps, social media, virtual assistants, as well as other forms of self service such as IVR.
  • Market leaders, British Gas, report having 60% of all contacts through these digital channels.  As we have seen in other industries, traditional voice and face-to-face channels still have a part to play as well, especially for ‘high touch’ contacts such as complaints.
  • The channel evolution provides an exciting and daunting challenge to energy retailers: to provide a seamless customer experience, whilst minimising disruption to the business, and delivering the benefits that implementing digital channels can provide.

The benefits: Maximising the use of digital channels during the customer lifecycle delivers value in two areas: cost reduction and improved customer retention through better customer service.

  • A reduction in the number of contact centre agents: the cost reduction element encourages customers to self-serve through digital channels.
  • Reductions in the cost per item and the total number of communications, by the shift to digital correspondence (i.e. transferring information from a letter to a web page).
  • Customer retention benefits: the opportunity to maximise each customer contact through the provision of a personalised customer experience, resulting in more satisfied, longer term customers (reduced churn).
  • Better customer segmentation, providing the opportunity to engage differently with selected customer segments according to the organisation’s commercial aims.

Why accelerate? Customer expectations have increased with the accelerated evolution of digital channels. Customers expect digital services. They receive digital service from leading retailers. Utility retailers must catch up.

  • Whilst a few years ago, retailers might have had to persuade customers to adopt digital channels, a recent survey suggests that 67% of customers now prefer to self serve. In a utilities context they want to be able to manage and control their interactions with their energy provider in a way that suits them. 
  • Other industries which have forged ahead in their provision of digital experience, for example banking and retail, have now set the benchmark against which all other sectors will be measured. Energy retailers are no exception.
  • The caveat which we must mention here is that customers will always want to talk to someone for issues resolution. Hence the emphasis we place on an All Channel Experience, with customers being able to interact with the appropriate channel for their purpose.
  • Customers now expect great customer service, across all channels, and companies which do not provide that experience risk losing customers to their competitors.

Not just a digital experience – an All Channel Experience (ACE). Customers now expect great customer service across all channels.

  • A true All Channel Experience means customers being able to interact consistently across all channels with their energy retailer. An example would be signing up to a new energy contract, and being able to do so through: mobile app, website, contact centre, face to face  etc. and the information being updated real-time across every channel
  • For the energy retailer we mean being able to recognise an individual on each channel, including their contact history across all channels, and provide them with a personalised service across all channels.

In conclusion therefore, we see customer expectations aligning with business objectives to drive the need to transform the energy retail organisation, and to do so at an accelerated pace. There is no time for delay; customers are demanding change, SMART metering will be here soon, and in the meantime Ofgem and the political parties are plotting the next wave of regulatory change