By Simon Vardy, Accenture’s strategy lead for utilities in Australia and New Zealand.
With energy a front-page issue in Australia for years, being wrapped up in public policy debate, consumer trust in the industry has never been lower.
In fact, the Australian Energy Market Commission found that only 37 per cent of consumers trusted the industry, with most surveyed believing the energy retailers were not working in their long-term interests. To combat this, a new Energy Charter has been introduced in Australia as a world-first initiative to improve industry behaviour. Twenty Australian energy businesses have joined the Charter as a commitment to improve accountability and restore consumer trust.
Additionally, the upcoming Consumer Data Right will be applied to the energy sector, allowing consumers to more easily compare and swap providers, amongst other benefits. These moves are all taking steps to put power back in the hands of customers. So, what steps can be taken for energy retailers to regain trust and promote loyalty?
While energy retail typically accounts for about 10 per cent of total industry revenue, Accenture predicts by 2030 it will rise to about 25 per cent through the introduction of new revenue opportunities. To earn trust back from Australian consumers, an improved and engaged customer experience should be a priority.
Accenture’s New Energy Consumer research has found that transforming customer experience (CX) is at the heart of value creation for energy retailers. The research found that when it comes to delivering an engaging customer experience, most traditional energy retail utilities lag behind disruptor brands, in both new energy-market entrants and service providers from other industries’.
Understanding and improving the customer experience
Over time, the energy value chain has become decentralised, digital and fragmented. Analysis from Accenture suggests that much of future growth from energy retailers will result from new products and services, such as electric vehicle products and services to connected building services.
To accommodate the availability of increasing products and services, energy retailers must prioritise a more vibrant and connected customer experience. Creating a connected energy experience involves digitally-enabled products and services and going beyond the commodity. These experiences are supported by insight-driven, hyper-relevant interactions.
Generally speaking, being ‘helpful’, ensuring an experience is intuitive, clear and easy to understand, is particularly important to customer experience. Among traditional energy retail utilities, competitive brands were less loved than non-competitive ones across all but one key moment: receiving proactive communications from their provider.
Proactive engagement is a key factor in generating a positive customer experience. The Accenture study found that ‘helpfulness’ is the top driver of all three business outcomes of staying, recommending and being satisfied across key moments of interaction. The study found the largest gaps in customer service for energy retailers were observed during moments of sign up — including initiating basic energy services or adding a new product or service.
Prioritise improvement with digital technology
Many energy retailers are struggling with generating growth or competitive advantage through current investments, and it’s proving tricky for retailers to track and analyse the impact of these investments over time. For most, the current state of existing operations continues to be a barrier to both entering new markets and achieving higher levels of customer experience. There is also an added complexity as consumer expectations are changing more quickly than energy retailers can address them.
When faced with evolving customer expectations, particularly impacted by digital technology, traditional energy retail utilities need to take action to boost customer relevance by adopting new customer-centric capabilities. Energy retailers can exceed customer expectations through initiatives such as digital marketing, targeted product offerings, insight-driven interactions and AI-enabled customer care, all to allow for a more satisfying experience for consumers that meets current digital expectations.
Energy retailers must leverage artificial intelligence (AI) technologies to enable intelligent services and differentiate CX by providing relevant digital support. In addition to reducing operational costs, AI offers enormous benefits to help improve customer satisfaction as an ideal tool to eliminate channel noise, improve service consistency, simplify processes and allow agents to focus on more strategic interactions.
AI can also personalise the customer experience. Personalised services are more in demand than ever before – according to research from Accenture, nearly 30 per cent of customers surveyed now expect companies with which they engage to know more about them.
The good news is that a significant segment of consumers are willing to share personal information if they receive something in return. Energy retailers can succeed in personalisation by making services hyper-relevant through a variety of tools and techniques. This could include proactive alerts and auto adjustments of in-home technologies and personalised subscription services.
Target for value and target for growth
Beyond implementing digital to achieve customer satisfaction, there are several key transformational levers that can set energy retail utilities on a course to sustainable growth and competitive advantage.
In addition to improving the customer experience to drive growth, earning consumer trust also emerges as a key element for success. Without trust, consumers will not be compelled by sophisticated and targeted marketing campaigns. Consumers have become increasingly discerning, meaning energy providers can no longer benefit from cross-selling and upselling opportunities — such as gas or maintenance services or into connected energy services — that can increase the revenue per user.
Instead, the best approach for energy retailers to achieve value and growth is by identifying more potential value in existing products and services and pursue it in new ones. Energy providers must be strategic by recalibrating business portfolios that specifically target new customer preferences and opportunities around digital interactions, as well as offering new products and services.
Understanding and improving customer experience is at the heart of value creation for the current energy market. Australian energy providers must plan their customer experience recognising that future growth will be driven through new energy retail products and services, and new ways of delivering value to consumers.
As consumer expectations for digital and personalised services steadily evolve, no energy retail utility will be all things to all customers — nor should they. Accenture’s research suggests that a more focused approach to customer experience, engagement and retention will be key to delivering new returns.
By focusing on the experience, energy retail utilities in Australia can exceed customer demands, and make every customer interaction an opportunity to deliver a connected energy interaction that goes beyond the commodity. Ultimately, energy retailers can restore their trust by becoming valued providers and true partners in delivering what a customer wants.