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Energy customer service: transition to a digital, customer-focussed model

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Poor customer service is one of the big drivers of churn in European energy retail. It’s not difficult to recall a time when you’ve felt underwhelmed when querying an inaccurate electricity bill, when trying to understand a change in payment plan or when changing account after moving home.

But under the surface, there’s a fair amount of innovation happening to address customer pain points, particularly in the digital space. Our research in Europe points to a transition away from the traditional approach centred around operational efficiency towards a customer first approach.

The drivers influencing this change are not a surprise. Within our own or our clients’ organisations we recognise the drive to reduce the cost to serve customers. As individuals, we appreciate brands that respond to our growing expectations around digital service as we subconsciously benchmark customer experience across sectors. And we can all acknowledge the technological advancements and artificial intelligence shaping communication in the wider world.

 

The transition has started

In the European energy sector, we’re firmly on the road to change with a huge array of communication tools and options. Chatbots and voice control may be in the spotlight, but innovation in customer service can come in many forms, from regular nudges based on energy consumption insights, to call centre agent assistants beyond the visibility of customers.

These new digital customer service channels vary in their purpose, maturity and characteristics, such as the relationship that customers have with the service provider through them shown in the chart below.

 

 

This of course implies that there isn’t one single answer as to which channel to get behind as they have different roles. So before we think of the what, we must address the why. Is the focus on providing operational excellence or are you trying to build a relationship with your customers? Are you looking to encourage loyalty, look for up-sell opportunities or help empower them to make better decisions?

 

Making sense of the options

Our research in the European energy sector has found the transition in digital customer service generally moving from operational efficiency to customer engagement to customer empowerment. Most energy companies have historically been firmly placed in the operational end of the spectrum, backing process to minimise errors and providing a standardised service for all. However, such service models are no longer enough as customer expectations and power grow, as technology advances and as commercial pressures tighten. So many energy companies are moving towards customer engagement.

Take digital self-serve. Basic online account management with operational functionality like checking bills and making payments are commonly done by energy retail customers. This helps reduce call volumes and hence cost to serve. But this is really at execution level.

Conversational self-serve, through webchat and chatbots for example, can add a new dimension when done right and can develop a relationship with a customer digitally on their terms. This can start to add value through operational efficiency and build customer engagement. Examples include Wien Energie’s BotTina in Austria and Shell Energy’s Ask Us in the UK.

But the transition goes beyond customer engagement to empowerment – providing customers with the options, resources and tools to make decisions or tailor their brand experience in the way they want.

Remote boiler diagnostics is a good example of this. The typical boiler maintenance or warranty product is a reactive model that relies on the customer to report a fault. Companies like British Gas in the UK and Feenstra in the Netherlands are turning this model on its head by remotely monitoring boiler performance, informing the customer when an issue is identified and taking appropriate measures to rectify it. This offers proactive service and reassurance for the customer, through peace of mind knowing their boiler is being continuously monitored, and reducing the number of engineer home visits, thereby empowering customers to get on with their lives.

 

It’s clear that there’s lots of innovation taking place. What’s also clear is that energy companies need to get the fundamentals right. The current inconsistency in customer service in the old non-digital world will only escalate in this new faster, more complex landscape with more permutations and higher customer expectations.

 

 

David Trevithick's picture

Thank David for the Post!

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Discussions

Matt Chester's picture
Matt Chester on Sep 19, 2019 2:26 pm GMT

Poor customer service is one of the big drivers of churn in European energy retail. It’s not difficult to recall a time when you’ve felt underwhelmed when querying an inaccurate electricity bill, when trying to understand a change in payment plan or when changing account after moving home

Makes you wonder how much churn there would be in certain U.S. markets if customers have the option to choose their provider. David-- do you see any significant gap in customer service between those utilities who are in open vs. closed markets?

David Trevithick's picture
David Trevithick on Sep 25, 2019 1:49 pm GMT

HI Matt, thanks for the great question. It’s often a complex picture led by business strategy. In open markets many energy retailers see customer service as an area to differentiate their brand and in both open and closed markets, there’s potential to develop customer relationships and cross-sell new services. Therefore there’s good reason to invest to improve customer experiences in both types of market. On the flip side, there are energy retailers in open markets who compete on price alone and some of these have very poor customer service ratings, so bring the average down.

Matt Chester's picture
Matt Chester on Sep 25, 2019 2:17 pm GMT

Interesting that some think price alone will win out (which is certainly the case for some customers), but that seems like a quite short-sighted view of it all!

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