At the beginning of the year, nobody could have anticipated the impact COVID would have on the utilities sector: changing usage patterns, supply chain interruptions, delays to renewables projects due to lack of capital and workforce, the list goes on. But what does 2021 have in store for the utility sector? Jo Allen, Customer Engagement Ambassador, Pegasystems, discusses her top predictions for the year ahead.
AI will identify vulnerable customers: Last month it was reported that households unable to pay their winter energy bills will be offered extra help from their supplier under new rules put forward by Ofgem. But how will energy companies be able to determine who should truly receive this benefit as they won’t be able to give it to everyone? And with many customers likely to experience financial difficulties, how can they communicate with them with the empathy they deserve?
Next year, we will see utility providers harness the power of AI to address both these needs – to calculate the individuals most deserving of a subsidy, and to help customer service representatives provide empathetic solutions. Those providers that are able to make this leap forward and engage with their customers on a personal level will stand out, as brands need to be seen as trusted providers as the knock-off effects of the pandemic persist.
Advent of new pricing models: With the increase in home working and customers struggling to pay their winter bills, we will likely see the introduction of new pricing models, rather than tariff changes to accommodate. With changing usage patterns, we will also see utility providers increase their data collection and analysis considerably to inform how to charge customers more accurately by linking back to their specific usage and needs.
Alternatively, we could see more providers switch to a subscription-based pricing model, with additional services being bolted on to the basics. For example, we may see companies move into offering smart radiators or motion-activated lighting so that they can achieve a repeatable income. This will signal a divergence away from standard offering and from utilities being viewed purely as a commodity.
Becoming sustainability educators: We have arrived at a point where customers want to use more green energy than ever before. While this is undoubtedly a positive, energy suppliers are struggling to deliver enough energy across the board to cope with ever increasing demand. In a bid to meet these preferences, providers will have to do more to encourage customers to change their habits pertaining to energy use.
Some people are already moving in the right direction in terms of becoming more sustainable. For example, sales of electric vehicles rose by 144% in 2019. But for providers that means a significant increase in electricity consumption. Given that they will have to produce significantly more energy, with more of that being from sustainable sources, they must increase their efforts to educate customers on how to use power more wisely. By promoting the installation of energy-saving gadgets in homes or endorsing habits, such as boiling the kettle with less water in it, consumers will be able to continue their day-to-day living patterns whilst also being more environmentally friendly.
Utility providers are always one step ahead: In a bid to be more operationally efficient, organisations will have to utilise technologies that can help them anticipate customer issues before they happen. For example, by monitoring data from customers’ heating systems, artificial intelligence (AI) can be used to spot if something is about to break. Some suppliers are already using AI on the output of a smart meter which can help inform them if it is likely to break down soon, meaning they can get in touch with the customer to alert them of the issue before it happens. Where we will see real progress is when this type of technology is installed in the grid to spot spikes in usage in particular areas so energy companies can then re-direct supply as required. By improving their data utilisation, companies will move to providing a pre-emptive service. This will become another way to differentiate themselves and improve their customer relationships, alongside their green credentials, rather than solely relying on price to attract and retain customers. Where telcos have already adopted a data-driven, next best action approach to forge better customer relationships and reduce customer churn, utility providers should take a leaf out of their book.
Technology will start doing the hard work: Until now, digital transformation has been a buzzword throughout the sector, and technologies such as AI have been employed without really considering whether it really is the most appropriate solution.
2021 will see utility companies stepping up in terms of how they employ technology. They have to go from having data scientists merely identifying problems, to doing something valuable with the information they have available and resolving the issue straight away i.e. moving away from pure analytics to actionable insight. We will see a shift in mindset to applying the right tech in the right place at the right time to serve customers.