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Challenging times for energy and water companies

Consumer Marketing Data General

utility blog

It is very apparent that the Utilities sector is enduring some of the toughest times in decades. Energy suppliers continue to feel the force of the directives from the Retail Market Review initiatives, with a focus on clear and transparent pricing, fairness of practice and improving the switching process. With the increasing negative PR from the political scrutiny on profits and the breaches in the selling practices and instances of over billing, it’s no wonder that energy leaders are hesitant to adopt cutting edge practices. Similarly the Water industry is under pressure to streamline its costs and improve customer satisfaction ratings, whilst investing in many programmes of change.

However, when you combine the tough regulatory and social landscape with the economic drivers in the wholesale market and the consumer debt landscape, the only conclusion one can see is that the energy or water provider will need to become ‘smarter’, ‘leaner and more efficient’, but most importantly ‘customer centric’ to win in this market space.  But what does ‘win’ truly mean? Appropriate profitability and market share? Highest levels of customer satisfaction? Increased brand reputation? Or all of the above?

With the long term trend of rising energy prices (recently stabilised and some reductions), increasing debt across the industry and a need for investment, whether in smart, green, mobile, digital and efficient technologies, utility providers have to become smarter in their policy and operational decisioning.  Whilst SMART and Universal metering programmes may ultimately help remove some of the ambiguity and increase confidence in billing in the Energy and Water sectors, it will merely shed limited light on the consumer preferences and behaviours. Ultimately utility providers need to prioritise efforts to those customers who need it the most.  Being more certain and assured of customers’ circumstances and tailoring strategies and offerings according to the customers’ ability to pay and affordability.

The challenge of bringing together the complexities of all the data linkages between the customer, the address, supply points, products, tariffs, bills and financial transactions, across a large and diverse customer base presents a significant challenge in its own right.  Therefore, it’s key for the industry to combine a more formal approach to contracting whilst ensuring customers are aware of their obligations to pay and the repercussions of not doing so.

The critical data component is the customer.

  • Who are they?
  • What is their relationship with the property?
  • What are the customer’s wants and needs?
  • Which customers require financial assistance versus which customers may choose not to pay utility providers in favour of other credit or spending?

Many consumers are unaware that utility providers share payment performance information with credit reference agencies which ultimately will have an impact on their credit status and ability to get forms of credit. Therefore it’s important that utility providers make this practice transparent whilst engaging with their customers and being proactive in supporting the customer with the most appropriate payment, billing and tariff offerings.

This brings me onto the final thought. Back to the challenge at hand.

  • How can the Utility industry keep the regulator on side?
  • How can the Energy supplier keep the customers happy whilst retaining market share?
  • How can the Water supplier maintain or increase their customer satisfaction rating?

The answer is clear. Embrace regulation by putting the customer at the heart of everything you do!

By doing this you will be more agile, innovative and responsive. By immersing your business in your consumer and everything about their wants and needs, you will not only treat the customer fairly, but you will treat them empathetically. So always challenge yourself with the question – Do I know enough about my customer?

If you would like to speak with me further on this please email: martyn.cladingbowl@callcreditgroup.com

Author: Martyn Cladingbowl | Head of Utilities

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