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Rethinking Customer Engagement in the Digital AgeDigitizing Customer Services in Utilities

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Changing customers’ communication preferences from traditional towards digital

Generation Y customers prefer to connect with utilities anywhere, anytime and also demand a quick response to their inquiries and complaints

Website, social media and web chat are preferred channels to contact utilities

Declining customer trust in energy utilities in the UK

Changing regulatory regime compelling utilities to provide better customer experience

Ofgem has laid down rigorous guidelines for utilities to improve the overall customer experience– It periodically conducts customer surveys to assess the effectiveness of digital initiatives taken by utilities and incentivize

the companies that performed well and penalize those with the poor quality of customer interactions

Rising use of smart meters and smart grids

UK Government aims to install ~53 million smart meters by 2020, implying the availability of an enormous amount of near-time data3

– Smart utilities have started to leverage this data to understand customer consumption patterns and deliver more value to customers such as introducing new tariff plans and proactively offering solutions

Source: 1 - Institute of Customer Service, 2 – Ofgem, 3 - Department of Energy and Climate Change

Read full report for the complete view of trends underpinning digitization in the UK energy industry

Market trends compelling utilities to digitize customer experience

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The UK utility sector was second least satisfied with respect to customer satisfaction (CSAT) scores1

In 2014, 44% of energy customers (an increase of 5% from 2015) did not trust energy suppliers to be open and transparent with consumers2

82.0 81.1 79.7 79.0 78.8 78.7 78.0 77.5 77.0 73.8 73.5 73.0 72.8 72.6

60.070.080.090.0

Ret

ail (

No

n-

foo

d)

Ret

ail

(Fo

od

)

To

uri

sm

Lei

sure

Au

tom

oti

ve

Insu

ran

ce

Ban

ks &

Bu

ildin

g

Ser

vice

s

Ave

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e

Pu

blic

Ser

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s…

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ort

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blic

Ser

vice

s…

Uti

litie

s

Tel

eco

m &

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iaCSA

T sc

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s

Source: UK Customer Satisfaction Index, by Institute of Customer Service, July 2015

Customer satisfaction scores of various sectors in the UK, July 2015

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Shift towards digitization enable utilities to reduce cost‐to‐serve across the meter‐to‐cash process

Source: WNS DecisionPoint™ analysis* Customer complaints related to billing and metering issues which they communicate with utilities

through channels such as telephone, utility outlet, post, and e-mails2 Wnsdecisionpoint.com

0

0.5

1

1.5

Cost per meter readingsper customer - physical

meter reading

Cost per meter readingsper customer - self-service

portal

Estimated costs savingsCo

sts

(In

GB

P)

010203040

Approximate averageannual customer contact

cost - letter/post

Approximate averageannual customer contactcost - self-service portal

Estimated costs savingsCo

sts

(In

GB

P)

0

500000

1000000

1500000

Approximate cost ofcontact center operations

(pre channel shift)

Approximate cost ofcontact center operations

(post channel shift)

Savings generated fromchannel shift

Co

sts

(In

GB

P)

Costs savings likely to be generated by shifting

physical meter readings to self-service channel

Potential costs savings likely to be generated by reducing printed paper bill and mailing costs

Estimated savings to be generated from reducing customer service agents by re-directing some of

the call center workload* to digital channels

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‘Digitally’ mature utilities are experiencing increase in operational efficiency

Source: WNS DecisionPoint™ analysis

0% 2% 4% 6% 8% 10% 12% 14%

Laggards' average

Followers' average

Forerunners' average

0 20 40 60 80 100 120 140

Laggards' averageFollowers' average

Forerunners' average

*Note: Laggards - utilities that offer inconsistent digitally enabled customer service and are cautious when it comes to investing in digital platforms Followers - utilities that have commenced digital channel initiatives with short-term strategy but have significant headroom to improve through

long-term planning Forerunners - utilities that deliver digitally enabled customer interaction services on fairly consistent basis but still lag in terms of digital innovation

WNS DesicionPoint™ conducted a detailed study of top 16 energy utilities in the UK to Estimate the digital channel adoption rate by utilities belonging in three categories* and its implications on complaints,

customer acquisition and cost to serve

79 80 81 82 83 84 85 86 87

Laggards' average

Followers' average

Forerunners' average

Cost to Serve per Customer, 2014 (in GBP)

Average Increase in New Customers in 2014 over 2013 (in ‘000)

SG&A Margin, 2014 (% of Revenue)

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Energy utilities in the UK still have a long way to generate a ‘digital’ advantage

* Transformers - utilities that have mastered alignment of digital customer engagement with long-term business goals and have set disruptive trends in the market# Scores are based on the data available for each utility as of August 2015

The development cycles of digital technologies are extremely rapid and

utilities need to augment their digital capabilities sooner and

continuously refine them

But the question is how to bridge the digital divide?

Read full report to assess digital readiness of the UK based energy utilities and understand how they can bridge the digital gaps to become Transformers

Although many energy utilities in the UK have increased their focus in embracing and deploying digitization initiatives, theystill need to significantly enhance the scope and reach of digital service offerings

Laggards

Followers

Forerunners

Transformers

0

2

4

6

8

10

12

0 1 2 3 4 5

Source: WNS DecisionPoint™ analysis

Digital maturity gap between Transformers* and other categories

Utilities

Sco

res

scal

e#

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A credible insights hub for companies looking to transform their strategies and operations by aligning with todays realities and tomorrow’s disruptions.

Email: perspectives@wnsdecisionpoint.comWebsite: wnsdecisionpoint.com

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WNS DecisionPoint

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