How energy firms can save customer relationships
When COVID-19 changed the way many of us live and work, it caused energy demand to drop dramatically and energy prices to become unstable. As the UK faces one of the worst cost-of-living crises for generations, compounded by rocketing energy costs around the world, consumers are looking for all the support they can get.
Yet customer loyalty towards energy providers is at rock-bottom, with research conducted by ELSE in April 2022 revealing almost half (46%) of bill payers feel no loyalty to their current provider. This is going to cause huge problems for energy companies once the crisis passes and disruptors flood the market. They urgently need to figure out a way to maintain their customers’ loyalty for longer. To do that, they first need to understand what inspires customers to be loyal, and where they’re currently failing to deliver.
At ELSE, our own research on the topic revealed that what people want most of all is to be empowered. Not only to monitor their energy usage, but to understand and control it.
In fact, one of the most compelling takeaways from our report is that energy is no longer a “low engagement” sector, with results from our consumer survey revealing that rather than just looking at the cost of their energy, 37% of energy customers are now actively seeking information about how and where they can cut costs.
Unfortunately, they’re finding that information too hard to access. Recent research from Citizens Advice, for example, found that customer service standards at energy providers is at an all-time low. As a result, customers are turning to other sources to help them with energy worries: Citizens Advice itself has reported an increase of 63% in energy related enquiries in the first quarter of 2022.
As demand for information intensifies – in line with expected bill increases later in the year – energy providers have an opportunity to design services which educate customers and empower them to manage some of their consumption. At a time when the cost of energy is impacting household budgets, providers can offer meaningful help by giving customers the tools they need to feel more in control of their usage.
The National Grid is already exploring ‘demand shifting’ whereby customers who keep consumption within certain parameters are rewarded. Following a successful trial earlier in the year, the National Grid is now in discussion with energy providers about a national roll-out. Success in supporting customers to make the most of a ‘demand shift’ — with the information and nudges required to make the required behaviour changes — could see significant pay-offs in terms of long-term loyalty to their providers.
Cost is a huge concern for people, but it’s not the only one. Customers are increasingly concerned about their impact on the plant. For a business, early use is about how you deliver immediate value. It’s important to help your users feel the decision they’ve made to become a customer is the right one — essentially substantiating their decision. For many energy businesses – and customers – this has historically been thought of as affordability. But interestingly, we found that just 21% of the people we surveyed said that affordability was the main reason they were loyal to their provider – what they want is the tools and information to take control of the energy footprints, whether for financial or environmental reasons.
In our research, nearly a third (29%) of bill payers admitted they want advice from their energy provider on how to be more sustainable with household energy usage. What value looks like to a customer evolves over time and, at every part of the journey, you have an opportunity to offer your customer choices. There is a huge amount of value to your business in creating an always-evolving learning experience that takes your customer from novice to master.
At ELSE, we call this evolution of (customer) capability the Experience Arc, which evolves over time and brings the customer on a journey with you. We define it for every service experience we design — to make sure they will deliver real value to the customer over time. Evolving alongside customer needs and desires is key ensuring you remain relevant to their life. This translates to loyalty and longer lasting value back to the business.
As experience designers, we’re most excited to design solutions that play a role in shifting behaviour for the better. As the conversation about climate change intensifies, energy providers can be deploying our industry to put these tools in the hands of their huge customer base. They can become leaders of this future behaviour shift right now.
It will require taking a critical approach to what value looks like to them as their customer relationship develops. Indeed, our report indicates that just the length of partnership alone is seen as a value exchange worth rewarding by 47% of bill payers.
This report is telling us the loyalty landscape within the energy sector is under new and significant pressures. As experience designers, we see numerous and genuine opportunities to improve things. Leaders within the space urgently need to look beyond ‘business as usual’ solutions to rise to the challenge. In the near future, when things improve, we customers will remember the ones who looked out for us when times were difficult.