Digital transformation has been an essential part of most businesses, with 70% of businesses in 2019 working on some kind of strategy. But while other sectors have been pushing hard to enhance their digital capabilities, the energy and utilities sector has typically been slower to adapt.
However, the sector is reaching a tipping point. With the financial repercussions of COVID-19, customers are re-examining their finances. In many cases, this means switching energy provider to secure a better tariff.
So how can companies boost retention while grappling with tight margins? A flexible, iterative digital transformation approach is a key part of the answer – helping surmount key challenges affecting profitability.
Here we explore 3 of those challenges – along with digital solutions that can help overcome them.
Challenge 1: Reducing customer churn
For years, money-saving experts have been evangelising about the financial benefits of regularly switching. And that message is getting across. Every year in the UK, 18% of customers switch providers. In the first half of 2020 alone, 3.3 million customers switched electricity suppliers.
Higher quality, more efficient customer communication is an easy way to start reducing churn rates. By regularly asking customers – past, current and future – what they value in an energy supplier, their reasons for switching (or looking to switch), and what they’d like to see from your business, you can adapt your strategy to improve retention and maximise renewals.
And there are a host of simple digital solutions that make this simple. SMS and email customer surveys, sent automatically after a customer engages with you, are a quick, easy and affordable way to gain feedback.
Challenge 2: Supporting customers through financial hardship
The primary motivation for switching has always been saving money, but never more so than now, when the COVID-19 pandemic has left many customers on shaky financial ground.
While you might not be able to adjust your price points, you can introduce digital payment management solutions that better help your vulnerable customers.
Centralising your customer data is key to this. If you can see all information in one place, you can implement triggers for signs of financial hardship – allowing you to manage the situation proactively before it reaches a crisis point. Importantly, this can provide you with the ability to keep lines of communication open to support customers in such a situation, rather than lose all contact.
Tools like the Engage Hub’s Intelligent Collections Solution can help you go one step further. It allows you to automate cross-channel digital journeys to speed up customer communication – and make it easier (and quicker) for them to pay bills.
Challenge 3: Improving customer service
67% of customers prefer to use digital self-serve options. A massive 91% of customers would use an online help platform over calling a contact centre, if it were available and tailored to their needs.
In other words, your customers expect effective digital service channels. If you don’t offer this, retention becomes more difficult.
However, having online options isn’t enough. To create long-lasting relationships, you have to offer a connected customer experience. That means going beyond ‘online-only’ tariffs and the ability to submit meter readings by app. It means looking at opportunities for automation and artificial intelligence.
The first step in doing this is to bring together data from your disparate systems. The energy and utilities sector is notorious for having siloed solutions, resulting in fragmented customer journeys – and, by extension, frustrated customers.
Solutions like Engage Hub’s Customer Journey Tracker can sit on top of and orchestrate data from your legacy systems. This provides an accurate and holistic view of all customer interactions (online and offline). As a result, you can more effectively personalise communications, engage high-risk customers sooner and foster relationships that increase lifetime value through optimising customer contact with your organisation.
Digital transformation doesn’t have to be a big, expensive project
Digital transformation has never been more vital for the energy and utilities sector. As the global economic impact of COVID-19 puts pressure on customers’ finances, companies that can innovate, operate efficiently and support customers in need will thrive; those who don’t will experience higher churn rates.
And you don’t have to launch an expensive, multi-year initiative to achieve these digital transformation benefits.
Find out how Engage Hub can help you implement the right technology, in the right way, to deliver fast ROI. Get in touch today.