We wrote recently how E.ON, one of the UK's leading power and gas companies, successfully rebuilt its customer trust by adopting better engagement strategies and making the move to digital. [E.ON Customer Engagement: The Business Case].
This piece lays out the company’s implementation of its new customer-centric strategy.
Recognising the need to change strategy
First and foremost, E.ON recognised the challenges that they were faced with. The UK market is not only a competitive and heavily regulated energy market, but it can also be a very hostile environment for utilities to operate in.
Ofgem’s report, "State of the Market Assessment" [March 2014] showed that "levels of customer confidence and trust are not what we would expect to see in an industry that is successful in meeting its customers' needs and expectations." Only about 52% of customers said they were satisfied with their supplier. Additionally, customer complaints have increased by over 50% since the beginning of 2011. In 2013, 43% of customers did not trust energy suppliers to be open and transparent in their dealings with them and as a result, were reluctant to engage in the market and switch suppliers unless the savings are worthwhile.
To regain customers‘ trust, E.ON made the decision to radically change its strategy and approach to the market. The company set out to “reset“ its relationship with customers and to digitally transform the customer experience. The aim was to improve trust and satisfaction, thereby reducing churn and improving the company’s performance.
Anthony Ainsworth, E.ON UK’s Marketing Director, puts it simply: “As a fairly new management team, we said enough’s enough. We figuratively pushed the reset button, and we said let’s do something differently here. So we set ourselves on a path to improve customer satisfaction.”
Once the decision was made to change, the strategy was formulated and agreed upon. This enabled the company to focus on key goals, including achieving market-leading customer satisfaction and helping customers control their energy use.
Reaching out to stakeholders
The customer journey started with simply listening to customers. In fact, the company also started listening more closely to their staff’s ideas. The company found, and continues to find, new ways to listen and involve employees, customers, and stakeholders.
E.ON became the first UK energy supplier to establish an Independent Customer Council, made up of business leaders, stakeholders and customer advocates to interact with and report to every month. The council helps E.ON really understand all the roleplayers‘ concerns so as to make the necessary changes. For instance, the council challenged E.ON UK’s top management to become more customer-centric by viewing internal processes with an outsider’s perspective.
E.ON continues to listen to the views of its customers and employees: about 1,300 internal people are involved with the "MySay" colleague research panel; sessions involving residential, SME, and corporate customers are held to enable extensive customer dialogue; and the "YourSay" online forum is now established with 28,000 customers expressing their opinions and making suggestions.
As part of the customer transformation programme, and ahead of the Retail Market Review which made a reduction in tariffs mandatory, E.ON's tariff options were simplified and reduced. This made the search for better deals easier for customers.
With a strategic goal to encourage more customers to manage their energy accounts online, digital transformation became a major focus for E.ON UK from 2013.
Digital "evangelists" were hired to strengthen the company’s digital capabilities. Initial improvements included basics such as improving the corporate website. Over the past three years, the digital team has grown significantly, equipping E.ON UK with a mix of digital native experts to help deliver a series of digital services and tools designed to make life easier for customers.
A good example of one of these tools is the Saving Energy Toolkit, launched in collaboration with Opower, a company that combines a cloud-based platform, big data, and behavioural science to help utilities reduce energy consumption and improve customer relationships.
The Saving Energy Toolkit has played a major role in E.ON UK's customer engagement transformation. The online tool, delivered to residential customers, is built on Opower's platform and software-as-a-service solutions, which use Big Data and analytics, and behavioural science to enable E.ON UK to provide personalized advice and products to help customers control their energy use and reduce their energy bill.
Core features include energy consumption tracking, social benchmarking (a comparison feature), appliance efficiency monitoring, energy saving tips, and the setting of energy saving plan/goals. The comparison feature encourages users to adopt recommended tailored energy-saving tips. Participants can even use social media like Facebook and Twitter to share their energy-saving successes with others.
The Toolkit provides easy to read charts that detail how energy is used in the home and how it changes according to seasons, and time of day for instance.
According to Ainsworth, the aim with the Toolkit is to assist and motivate customers when it comes to making informed decisions regarding their energy consumption.
The Toolkit’s overall benefits have surpassed those originally anticipated. The average consumption reduction from engaged customers using the Toolkit is around 1.4%. Since its launch in 2013, one million E.ON UK residential customers have visited the Saving Energy Toolkit.
The results speak volumes
One of the key performance indicators for customer satisfaction and loyalty monitored by E.ON UK is the net promoter score (NPS) which measures customers' willingness to recommend the company to others. E.ON UK's NPS has improved and it now leads among the major energy suppliers. In addition, brand metrics and churn show consistent improvement.
The entire digital transformation programme was highly successful. 2014 statistics showed that the company website received almost 30 million unique visitors in 2014-double the 2013 figure; over 10 million visits were via mobile devices ; over 1 million visits to the iFAQ help pages were received; double the number of customers were managing their accounts online; a significant increase in online product switches; over 30,000 customers were assisted via social media; and over 1 million customers signed up for E.ON’s Rewards programme.
Advice to others
When embarking on the customer transformation journey, utilities should consider the following, according to IDC Energy Insights:
Take an "outside in" business approach by wearing your customers‘ shoes. This will help utilities develop a more customer-centric approach.
Give scale to initiatives and stop executing isolated pilots. While testing is important, utilities should scale up quickly to create synergies and impact the customer base. This will help release the full benefits of customer engagement initiatives and most importantly trigger the company-customer transformation journey. From a technical perspective, cloud options should be considered as a way to easily scale up customer experience initiatives.
It’s important to assess the company's customer experience maturity. Assess the organization's current culture regarding customer management and assess what management is doing to implement the customer experience vision. Utilities should look at the existing processes and systems in place for customer operations, from either an inbound or an outbound perspective. Are these connected, consistent and comprehensive?
Show top management commitment and engage employees. Customer experience strategies and the infrastructure required to execute them take time to be put in place so it’s important to assign a C-level executive, and ensure that the leaders of the initiative are given the authority to make appropriate changes and generate support.
Measure success. Metrics and analytics need to be in place. Develop required customer experience-related KPIs, in conjunction with business performance metrics and review correlations.
Select the right partners. Bring partners and suppliers into the broader "experiences" strategy. Review and evaluate current suppliers and partners for their ability to operate to satisfy the customer experience initiative and their ability to represent the corporate mission.
It’s not just about communicating out. It’s the beginning of starting a sustained and mutually valued two way digital conversation. This can only enhance a customer’s view that their utility is going the extra mile to provide a personalized service experience.