The PSI team had the pleasure of attending the recent Utility Week Live conference, in Birmingham, with this year’s theme as ‘disruption’ in the industry.
With panels and seminars covering a range of topics from managing customer trust to flexible energy storage - here’s our take on some of the talks that piqued our interest from the conference, and what this means to the future of utilities.
Customer trust: the challenges and opportunities
- Lois Vallely (Features Editor, Utility Week)
- Jennifer Felton (Head of Comms, United Utilities)
- Matthew Cole (Head of Domestic Policy and Social Energy, Npower)
- Matt Rudling (Director of Customer Services UK Power Networks)
Today’s utility industry is rife with low customer satisfaction levels, brought on by a lack of trust in suppliers. Utility Week & WNS came together to undertake a research project on trust and the role pricing has in the customer's perception of fairness and transparency.
With the industry as a whole standing at a 7.2 / 10 trust rating there is clear room for improvement. As mandated pricing structures come in to play, and there is a commodities style race to bottom in terms of price, you would think low cost equals high trust, this is not actually the ideal strategy. The Utility Week & WNS Partnership research indicated that the focus needs to be on fair pricing, transparency, and giving customers an understanding of where their charges are going.
To drive trust and satisfaction, the role of the Utility needs to be redefined. The relationship with the customer needs to change; from acquisition, to customer service, and operational excellence, each touchpoint your customer has with you or one of your third parties needs to be delivering a streamlined approach, and a superior service, with clarity and transparency at each step.
Opportunities presented by smart meters and the connected home
- Jennifer Major (Head of IoT, SAS)
- Neil Pennington (Founder, Pennovate)
- Aimee Betts-Charalambous (Smart Meter Technology Policy Lead, Department for Business, Energy & Industrial Strategy)
- Toby Ferenczi (Director of Strategy, OVO Energy)
Like many others in the utilities industry, PSI has focused much of its research on creating a more connected experience for the customer in recent years. From marketing tactics to the way utility products work, utility providers need a customer-centric approach, in order to thrive in today’s market.
To implement such an approach, utilities will need to identify their key customer segments, and design targeted experiences to match. Jennifer Major, the Head of IoT (internet-of-things) at SAS identified the following customer segments:
- Non-early-risers who tend to be out during the day
- Families with kids, whose energy use jumps in the evenings
- Early-to-bed, early-to-rise households – especially those with young children or older people
- Late night gamers
- People who work from home
According to Jennifer, formulating customer-centricity strategies for each of these groups could prime utility providers for success. This might entail creating personalised dashboards and forecasts, and keeping each segment updated with the most relevant information. Above all, it’s about understanding each persona as a customer, and delivering value especially for them.
OVO Energy’s Head of Strategy, Toby Ferenczi, was on hand to explain how his company has used technology to steal a march on the big six. He explained that OVO sees itself as a software business, first-and-foremost. Over half its customer base has a smart reader, and engagement with the company’s app is high.
Cutting-edge digital features - such as a pioneering online top-up option - have helped OVO build its reputation as a customer-centric utility provider for the tech-savvy. Toby’s revealed some of the philosophy behind the brand’s success, and perhaps also a hint as to what its long-term direction will be.
“The key to success in our time is owning the means of connection,” he said. “Value is created by connecting two distinct user groups, as AirBnb has connected homeowners with renters. How does this apply to energy?”
We were interested to note that none of the speakers brought forward a solution to the security concerns associated with the IoT, nor why smart meters are no longer on the Ofgem critical list. A surprising oversight, given the focus on building customer trust we saw elsewhere at UWL.
Smart infrastructure, energy systems and cities
- Tobi Babalola (Smart Electric Vehicle Manager, OVO)
- Katie Black (Head of Transport, Energy and Digital, National Infrastructure Commission)
- Stephen Hilton (Bristol Futures.Global)
- Tony Sceales (5G Testbeds and Trials Programme Lead, Department for Digital, Culture, Media and Sport)
This varied panel discussed how their respective organisations – or society as a whole – can meet the challenge of implementing new infrastructure and energy systems, whilst remaining competitive in the existing marketplace.
OVO’s Tobi Babalola said his firm’s strategy is to allow customers to take control of their consumption – though they’ll face a challenge in making such a model sustainable.
Stephen Hamilton of Bristol Futures spoke about how the council-sponsored Bristol Energies created revenue to channel into other projects, including building infrastructure.
Tony Sceales, a programme lead from the Dept. for Digital, Culture, Media and Sport, drew attention to how little the public understands the costs of infrastructure and energy projects, citing the 500 systems currently in-place simply for digging up roads.
The National Infrastructure Commission’s Katie Black discussed prospective approaches to meeting the UK’s long-term infrastructure challenges. She suggests a living lab model, in which customers can participate in projects as co-designers.
Echoing the great Cedric Price, Future Cities Catapult proffered, “Technology is the answer - what’s the question?”
Transforming customer service in the water industry
- Jasminder Oberoi, Principal - strategy and policy - Ofwat
- Tony Smith, Chief Executive - Consumer Council for Water
- Alun Shurmer, Director of commutations and customer strategy - Welsh Water
This session offered a mix of positive news and notes of caution for water companies.
Thanks in part to the generosity of the regulator Ofwat, water companies are consistently outperforming the stock exchange. Prices and customer satisfaction are going up – but customers’ sense of fairness and value-for-money is falling.
Water companies are outperforming their peers in the energy sector, but is that the standard they need to be aiming for? When we look at the most trusted brands, who are delivering the best service, how do water utilities stack up. Trying to drive improvements, Ofwat are now implementing the Customer Measure of Experience (C-MeX) which is being tested currently and due to go live in 2020. This initiative will be targeting all customers in a water company’s catchment area to test their experience and perception of the water company. With the spotlight being shone on these monopoly’s the need to deliver an exceptional service at every touchpoint is key.
Alun Shurmer, Director of Customer Strategy & Communications at the high-performing Welsh Water, said water companies are failing to meet the pace of change, and that “getting it right today won’t be the right solution for tomorrow.” He suggests water companies ask themselves what they’re trying to achieve, and whether that’s what customers expect. Furthermore, do customers care, and is the sector listening?
Utility Week Live has given us plenty to think about, from customers’ expectations to utility providers’ innovations. We’ll be writing more about this, including actionable advice, over coming weeks but if sales are your most pressing concern right now, then download our tip sheet below.