With utilities under increasing pressure to modernise as regulatory requirements and customer expectations rise, technology has become key to the transformation. But how can businesses ensure that technology-led and customer outcomes remain connected so that the results are truly focused on the needs and interests of those they serve?
A challenging backdrop
This was the subject of our latest Understanding the Energy Transition event. There was widespread agreement that customer expectations of service are increasing, with Des Johnson, former Vice President of CX and Digital Product Delivery at BP, expressing it succinctly when he said: “As a customer, your minimum expectation is set by your last great experience. That becomes what good looks like.”
This ‘expectation inflation’ is something all organisations have to rise to. But at the same time, it’s important to recognise this doesn’t mean every experience must be through a digital channel or app. As Nicola Harris, Head of CX at Yorkshire Water, observed, “A customer with sewage outside their home doesn’t want to deal with a chatbot. They want to talk to a real person. However, what they do want is for their needs to be promptly understood and met. That’s where AI and other tech come in, helping us deliver services shaped to the customer with agents offering the right solutions more quickly. More widely, AI helps surface decision-useful insights across the business that can support the customer agenda.”
Regulation is another key driver, raising the bar for organisations to take a customer-oriented approach. Our conversation was very timely given that, in April, a new piece of regulation comes into effect as part of the Special Measures Act requiring water companies to be able to evidence that they have taken consumer preferences into account when taking major decisions that will have a material impact on customers. However, there was a strong consensus that compliance with regulation is a hygiene factor or ‘minimum threshold’. It should be an almost natural by-product of adopting a customer-oriented culture and belief set where doing the right thing for the customer is the right thing for the business too.
Transformation led by a customer-centric vision
The imperative to put CX at the heart of operations, and to leverage technology to do so, is clear. But the transformation can often feel like an Everest. Most organisations are already some way into their journeys – but how can they increase the momentum?
For Duncan Knight, Head of Front Office at KPMG, technology and AI should be seen as powerful enablers, but not a ‘silver bullet’. “You have to come back to critical questions about why this is important and the customer experiences you want to offer,” he said. “Start with the vision, not the technology. The vision should be your frame of reference and the blueprint for your transformation. Remember too that CX is a team game – it should be part of everyone’s brief across the business, to put the needs and perspectives of the customer at the heart of decisions. It doesn’t just sit with one department.”
Keeping the vision as the driving force, an effective strategy was seen to be identifying and focusing on ‘halo customer journeys’ – those experiences and processes that are the most fundamentally important – and, within those journeys, the moments that matter which really determine whether the experience has been a success. Measure where you are with these currently from a customer outcome perspective and iterate on improvements.
The willingness to experiment and innovate is also a pre-requisite, with a ‘fail fast’ mentality. As Des Johnson advised, “Don’t be scared to fail: control the cost of failure, not the rate of it. Keep focused on value in everything you do, by which I mean what will have value to the customer? You need a ruthless tracking of your metrics to validate or disprove your hypothesis. When you have a success, this builds confidence to scale quickly. Start small, move fast, validate success, scale.”
Overcoming the data challenge
A critical challenge here, of course, is data. Utilities companies have a wealth of customer data – but can remain insight-poor if systems aren’t connected and talking to each other. Agents may have to ‘swivel chair’ between different repositories of information when talking a customer, for example, or data may not be adequately joined up between different functions such as customer service, billing and operations.
“The end goal is to have a unified or golden customer record – most organisations are on the unification journey,” Duncan Knight said. “It very much depends on each organisation as to where they are currently and the task in hand. Where does data sit now, how can it effectively be managed and governed, where should it be housed? It is often possible to start quite small, remediating key areas, then scale up, moving towards a system of master data management. There are lots of platforms and products available in the market. The sequencing is crucial too: think about data as you are digitising, not afterwards.”
Better data management enables more focused and customer-centric support. Nicola Harris gave the example of the important area of supporting vulnerable customers. “It’s key that we can surface the right data at the right time. When dealing with a vulnerable customer such as an elderly user, they may need priority support in the event of an incident but we need to know exactly what their needs are, whether that’s a disability or a mobility problem for example. More broadly, having that access to quality, accurate data can help us be more proactive and pre-emptive in meeting customers’ needs.”
Delighting the customer
Ultimately, those utilities that connect technology-led transformation with better customer outcomes will be the winners of tomorrow. As Duncan Knight concluded, it is about a lot more than operating efficiency: “You can’t just chase operational cost gains through AI and other tech-based automations – you’ve got to think about the effect on CX too. Done right, AI can enable both: efficiency savings which you can invest in delighting the customer. That’s the real win-win that stands to be gained.”
If you’re interested in a deeper dive, take a look at our report Redefining customer engagement in utilities here.
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