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Future utilities: How energy giants can enhance the utility customer experience

  • 5 mins read
Rob Verheul
by Rob Verheul
Managing Director

Graphite's Managing Director and a BIMA 100 winner. Also on the BIMA Young Talent Council, which is focused on creating a pipeline of future innovators in all areas of digital.

Published on Thursday 7th November 2019

The future of utilities will look very different in the next decade as the utility market is undergoing unprecedented change. Energy industry digital transformation is underway as the main suppliers seek to compete against new disruptive suppliers entering the market. Consumer expectations are also increasing and individuals are seeking to protect planet Earth, understand where energy is sourced and how they might use renewable energy sources. Large enterprise energy suppliers need to provide better utility customer experiences. In this blog we look at an overview of the utility industry and how enterprise suppliers might deliver better customer experiences.

A history of the consumer market

The Gas Light and Coke Company was the first public utility company in the world, incorporated by Royal Charter on 30 April 1812 under the seal of King George III. This market was privatised in 1986, and British Gas became disrupted by multiple competitors, supplying energy to the consumer market. 

In the last decade, the majority of Britain’s consumers were supplied by the so-called ‘Big Six’ energy suppliers - British Gas, E.ON, SSE, EDF, Npower and Scottish Power.  

Despite this competition, Ofgem felt it necessary to create legislation in 2016, known as the ‘switching programme’ which enforced the consumer ability to switch suppliers very quickly. The changes have seen greater competition, pricing transparency and smart meters measuring consumption. It has become easier for customers to recognise how much they are paying, and how much less they could be paying for the same outcome.

Since then the big six have faced competition from more than 60 smaller firms, often offering lower prices. In its annual state of the market report in 2019, Ofgem said the six companies had lost around 1.3 million customers, and they served just above 70% of domestic customers as of June this year, down from around 75% in June last year (Ofgem).

Energy bill phone scan

So what’s going on in this changing utility market?

It’s not just price that’s creating disruption.

Energy is a utility; in terms of customer experience at its basic level, it’s either working or it’s not. In a survey last year, nearly a quarter of Brits admitted to having never checked to see if they could save money on their energy bills (MoneySupermarket.com). It may seem that customers are dispassionate about their energy supplier but there are opportunities to provide better experiences and interactions when customers interact, either when problem-solving or investigating pricing. 

Energy companies need to stand our of provide a positive customer experience in an increasingly competitive market, with low barriers to switching.

In recent years various disruptors have created offers that attempt to take market share from the big six; including:

Bulb energy has experienced tremendous growth in the last couple of years. Offering rates around 40% lower than British Gas, they buy their energy from green sources and make customer service a priority. Their growth has been fuelled by a simple and generous referral scheme - refer a friend. Give £50 + Get £50 is a powerful scheme that compels customers to encourage advocacy.

Labrador is an incredibly disruptive service; acting as an intermediary between you and your energy supplier, they will measure your usage via your smart meter. Then they will automatically switch you onto the cheapest rate. No longer do brand, energy source or value-added services count - only price. The whole customer experience is delivered via their digital user interface.

How can energy providers provide a better customer journey?

The smaller disruptors aren’t always a runaway success. Ofgem is taking action after the collapse of 16 smaller suppliers since November 2016. It would appear that navigating the industry is not child’s play. The regulator recently warned four companies that they could have their licences revoked if they did not pay money owed to a government scheme designed to support renewable electricity generation by the end of October.

This is a huge opportunity that the Big Six energy providers can jump on. However, to keep a competitive edge, market leaders need to innovate. In terms of innovation, there are a few recurring themes in terms of ‘jobs to be done’:

  • Sourcing - ‘How might we ensure customers feel like their energy is sustainably sourced’?

At the point of writing, we’re not far away from 2020. Consumers are now more conscious of the origins of their products, energy in particular.

  • Price - ‘How might we ensure customers feel like their spend is being minimised, and money managed transparently and fairly?

Spending time looking through energy bills can be a huge pain point for consumers. Empowering them with accurate information and tools to manage their spend transparently are vital opportunities.

  • Customer Experience - ‘How might we provide the best customer experience, through every channel, every day?

It might sound like a tough mandate, but it’s only through building customer satisfaction, and continually improving the customer experience (particularly the digital customer experience), that any utility company will thrive.

Energy agreement

How can we help?

The race to enhance the customer experience in the energy sector is definitely on. At Graphite, we partner with enterprise clients on their ongoing journey to develop better digital customer experiences. We often begin this process by bringing teams together to form innovative solutions in a design sprint, followed by detailed user research. If you want to find out more about how we can help your energy business keep up with innovation, get in touch via the form below.

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