Unlike other products that customers can touch and feel when they buy them, utilities aren’t like that. They’re services that most customers barely notice until they get a bill that’s calculated wrong, the meter reading is off, or the price has gone up again.
It’s at this point customers pick up the phone to fix the problem — only to get a less than helpful customer service rep. After an hour or more on the phone with no progress, the customer’s more frustrated than before and thinking about switching their utility company if that option’s available.
Between the different utility suppliers available, there are a lot of options to choose from when there’s more than one provider per region. Where there are multiple options offered, customers switch in the hopes of improving their experience and getting a lower price.
A study done by Echo Managed Services found that 34% of consumers in the UK regularly switch utility providers. This means that regions with more than one utility company see a lot of churn and end up spending more money to attract new customers.
Growing your business shouldn’t come at the expense of customer experience. Find a way to give consumers the experience they expect — fair prices, accurate billing, supportive customer service — to break the cycle of churn so that customers switch less often.
Here are four customer experience trends in utilities and how to use mobile messaging, like short message service (SMS) and rich media messaging (RMM), to improve service.
Between monthly invoices, most customers aren’t encouraged to engage with their utilities companies. The customer relationship becomes about only providing a service and not taking a step back to make sure customers are actually happy.
This due diligence is key because the same study by Echo Managed Services found the most common reasons customers switch utility companies to be:
Of these four main reasons, price is at the top. Higher pricing is inevitable, so to help customers anticipate and plan for higher rates, some utility companies are starting to see the value in engaging with customers between when bills are sent.
To slow down churn, these companies have figured out where along the customer journey consumers decide they’ve had enough. Once they know this, these utility companies use mobile messaging tactics like RMM or rich communication services (RCS) to engage with their customers to keep them happy.
A few ideas of the types of messages to send reminders about include:
Combined, these messages help create a positive customer experience so that even when you make mistakes — like calculating a meter reading wrong — customers are more forgiving and less likely to want to switch companies if that option is available to them.
To figure out what types of information your customers value the most, send a survey via text since mobile messages have a higher open rate than emails. For example, as a way to improve customer communication, Scottish & Southern Energy (SSE), an energy company based in Scotland, uses interactive voice messaging (IVM) to share their Net Promoter Score (NPS) survey. The voice messages are prerecorded so SSE can reach practically all of their customers at a low cost.
Read more about: Rich Communication Services: The Benefits and Drawbacks
Keep your surveys short, with four to five questions and ask about what type of information customers want to hear about and how often they’d like to receive new updates.
Depending on what interests them, you can create different kinds of campaigns to keep customers engaged and satisfied with your service.
Whether utilities are privatized or not, price is an important part of customer satisfaction. For example, if prices seem to keep going up but there isn’t an equal change to service quality, customers are more inclined to leave in search of lower prices and transparency on how their bills are calculated every month. The more open you are with your customers, the better your chances are of retaining them longer.
Companies and governments that regulate utility pricing are also responsible for increasing price caps. In some regions, it’s not uncommon to see changes to the cap multiple times a year. Oftentimes, it puts a squeeze on your revenue, especially if you’re dealing with supply issues due to seasonality:
[Source] An example of how seasonality affects price caps in the UK.
While price caps are meant to regulate how much customers pay for their gas, water, and electricity, multiple increases to tariffs mean customers are paying more instead of less. Stephen Murray, energy expert at MoneySuperMarket, explains the issue this way, “Rather than bring bills down, the cap has simply made them even more expensive for customers who are already struggling.”
Customers know that sometimes prices will go up for legitimate reasons like when wholesale energy costs increase — price hikes are inevitable. However, what damages the customer experience is when these increases don’t seem fair and customers feel as though they’re being taken advantage of.
To build trust with your customers, you have to be transparent about pricing and be ready to explain when it increases. Are increases because of seasonality or are they because of something else? When price increases happen, add value to the customer experience by sending IVMs or video messages in RMM format to let customers know, well in advance, what’s coming.
Briefly explain the reasons for the increase and invite customers to share comments and questions in response to your message. This way, customers are prepared beforehand and are given a chance to voice their opinion. You might have to increase prices regardless of what customers say but at least show them you value their opinion by making improvements to your services — for example, share product outage updates on your website or on social media, improve your app, or share the latest business and industry news on your blog. Combined, these strategies help improve customer experience.
Customers miss payments for a number of reasons: they forgot about the payment deadline, they dispute the billing amount, or they can’t afford it. As a result, you have to launch a collections campaign to get payment. Collections is one of the hardest jobs utilities must deal with, but if you use a friendly tone, and make the payment process as frictionless as possible, you can maintain great customer relationships.
Read more about: 5 Credit Collection Strategies for Faster Repayment (and Better CX)
Where this process takes a turn for the worse is when customers are bombarded with calls, emails, and letters from you that get increasingly more threatening the longer payment is left outstanding. Collections is a form of customer experience and taking a negative approach to it does nothing but turn off customers — even if they’re in the wrong.
Thirty-three percent of customers say they switch companies because of bad customer service:
How you choose to communicate late payments with your customers may need to improve. A harsh tone might seem like the best way to get customers to take action immediately but, in reality, it shows a lack of understanding and compromise.
Because you offer a service that customers can buy over the phone or online, customer service is often the only contact customers have with you. This is why you have to work on creating a positive and helpful experience to minimize switching and get your customers to engage with you.
With each SMS or RMM you send, encourage customers to ask questions or leave suggestions. When they do, it’s important that you respond in a timely manner.
For example, for late payments, send supportive texts that:
This way, you give customers the ability to respond and act. Plus, you build a trusting partnership since your approach is more personal and respectable vs. authoritarian.
When customers who can switch utility companies do so, that isn’t the time to try to improve their experience. One mistake many utility companies make is they try too hard to win back customers who’ve left because of a bad experience.
This attempt is too little too late — the effort should have been made before customers chose to leave. Spamming churned customers with emails and phone calls only frustrates them and sours their experience even more.
Customers want a utility company that solves their pain points — like offering an affordable service. You can retain more customers by finding ways to talk to them about your services and engaging them so they don’t leave. As long as they’re still customers, you can improve their experience.
One way to do this is to create a drip campaign that keeps customers engaged after they sign up. For example, a mobile messaging campaign might look something like this:
For each message you send, include an invitation for customers to contact your customer service team with questions.
Read more about: 5 Credit Collection Strategies for Faster Repayment (and Better CX)
It’s clear that customers won’t hesitate to leave one utility company for another if that option is available to them. To improve customer experience, companies have to do a better job of engaging with customers from month to month.
Energy Market Price points out that “energy businesses are recognizing the need to become more customer-centric.” But Energy Market Price recognizes that there’s still a ways to go from saying this and doing it. They also point out that the more flexible you are when it comes to making changes to meet customer needs, the better your chances are of retaining them, therefore reducing churn and customer acquisition costs.
Find out how VoiceSage can help you improve your customers’ loyalty and engagement, book a demo today.
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