Recent reports that price comparison sites will soon offer ‘auto-switching’ promises a new era of reduced energy bills for consumers. With sophisticated computers automatically swapping customers onto the cheapest tariffs, the hassle of searching for the best deal will soon be a thing of the past.
James Daley, director at consumer campaign group, Fairer Finance, was quoted in The Telegraph, saying price comparison sites would need to adopt auto-switching “or die”, due to “pressure on all fronts”. But with consumers being moved automatically to the cheapest energy tariffs, the key question now is – how can utilities firms compete? Industry deregulation, flat baseline pricing and advances in digital technology are all combining to turn the industry on its head, empowering customers and disrupting long-established business models.
More choice for consumers
Following the deregulation of the UK gas and electricity markets in 1996 and 1998 respectively, the UK water industry finally followed suit in April 2017. Doing so has significantly increased competition amongst providers and choice for consumers. Your water supplier is no longer dictated solely by geographical location; a customer in Cornwall can choose Scottish Water if they wish.
According to Ofgem, more than 7.7 million people in the UK switched energy supplier in 2016, a 28 per cent increase over 2015, which was itself a record year. Where once price and location were the sole determining factors for choosing energy and water suppliers, today’s customers have more choice and more information. Price comparison websites make it far easier for customers to identify the most competitive tariffs, and the emergence of auto-switching services promises to solve this problem completely.
Increased competition is forcing providers to up their game across the board to win new customers and retain existing ones. With pricing largely flat across most suppliers, brand values and overall customer experience are now much more significant factors in purchasing decisions. A commitment to customer experience will become the driving force behind customer switching and retention in the utilities industry. Getting it right is more important than ever before.
Strategic investment in the contact centre
Main challengers in the utilities market are already using brand identity and customer experience as key competitive differentiators over more established providers – strategies largely unheard of in the utilities industry before now. Failure to keep up with this rapid pace of change is likely to prove extremely damaging for even the largest organisations, echoing trends seen in other sectors across the business world in recent years.
It’s not about price, but performance. It’s not the savings; it’s the service. Organisations must adapt to survive and strategic investment in technology that improves the customer experience is crucial. Take the contact centre. This area falls at the intersection of customer experience and compliance – a primary area for strategic investment in technology.
Many large organisations struggle to cope with a rapid pace of technological change due to costly legacy systems, which are expensive to maintain, update and replace. This leaves them vulnerable to disruptive new market challengers and technological innovation, and underprepared to meet increasingly stringent compliance requirements. The focus is not just from regulators – in today’s society, data protection is increasingly a concern for consumers. Data breaches appear in the news all too frequently, and businesses now need to demonstrate they are prioritising the safety of customer data.
Firms will need to review their contact centre operations to ensure they diligently handle telephone card payments and protect their customer’s financial data in line with the Payment Card Industry Data Security Standards (PCI DSS) stringent requirements, as well as the impending requirements of the EU General Data Protection (GDPR). Both frameworks place significant demands on companies to demonstrate the highest levels of security and data protection.
The NIS Directive will raise the security stakes even higher
Following a public consultation in Summer 2017, the UK government is finalising plans to facilitate Network and Information Security (NIS) Directive compliance. First adopted by the European Parliament in July 2016, and entering into force in August 2016, the EU directive aims to achieve a high common level of network and information systems security across the EU in three key ways:
- Improving cyber security capabilities at the national level.
- Increasing cooperation on cyber security among EU member states.
- Introducing security measures and incident reporting obligations for operators of essential services (OESs) in critical national infrastructure (CNI) and digital service providers (DSPs).
Fines of between €10 million and €20 million, or 2–4 per cent of annual global turnover, have been proposed by the UK government for organisations that suffer a security breach and are unable to demonstrate appropriate risk mitigation measures were in place.
The new directive will directly affect the utilities sector, raising the security stakes even higher and placing more emphasis on effective data security. Regulatory and financial pressures mean utilities firms need to look to new technology solutions that offer seamless and transparent transitions, with zero disruption to customer experience.
Cloud-based solutions are the obvious choice for strategic investment, and for the contact centre they offer a huge range of future upgrade possibilities. Choosing the right technology now will enable firms to meet the security, compliance and customer experience demands of the future.
Going beyond payments
The primary area cloud technology has benefited the contact centre is with secure phone payment processing solutions. These offer a seamless payment experience – one that’s both customer friendly and easy for agents to use – which significantly shorten average journey times whilst securing sensitive payment information. The simple change of offering customers a faster, more satisfying contact experience can improve retention and boost overall Customer Lifetime Value (CLV).
But once an organisation has adopted a cloud-based platform, a range of additional capabilities can be integrated. One example is Automatic Speech Recognition (ASR) for phone payments. This offers customers who cannot use their telephone keypad the ability to speak their payment details, whilst still processing their payment in a secure, compliant way. This capability will likely affect a small proportion of potential customers, but providing an accessible service that maintains security can make a big difference to brand perception and customer retention.
There is no doubt that utilities is an industry under pressure, and for these firms the power, security and flexibility offered by cloud solutions are impossible to ignore. This technology can help close the widening gap between resource and requirement, offering an affordable and proven route to customer experience and compliance. As the pressure on the industry continues to grow, it will be do or die for many utilities firms.
Matthew Bryars, CEO and co-founder, Aeriandi (opens in new tab)
Image source: Shutterstock/everything possible