How to reduce your cost to serve in the utility sectorTopic: Utilities
Utility providers are faced with an enormous balancing act: limiting customer arrears and chasing down payments, while at the same time delivering excellent customer service and keeping down the cost to serve. More cost-effective ways need to be found for both. So how can this be done?
Going paperless saves money
Paperless technology can demonstrate your business’s commitment to providing effective communications with customers while at the same time considering your environmental impact. In addition to this it also has some direct cost-saving benefits.
Postal communications are also not what your customers want anymore, with a third of consumers feel that letters are irrelevant. Whether it’s a reminder for meter readings, updates to policies or welcome packs, direct mail has a lackluster trigger for customers; it gets lost, gets buried and it doesn’t offer itself for easy response.
So to the cost. It costs around 45p to post a standard letter and can cost up to 80 pence for a prepaid return envelope to be included too. Depending on your customer base, you’re already getting into thousands of pounds, and then you’ll only have to do it again for the next month’s reminders.
How effective are these letters? There’s no way of knowing how many were delivered correctly, if they triggered a customer to update their meter readings or take the required action unless they use the return envelope. This is just one reason utility providers need to start thinking digital.
Streamline customer calls
Unlike other businesses that collect data in order to better market their services, utility providers are in a constant need of data from their customers; specifically their energy usage.
The smart meter initiative has certainly helped automate this, but this only accounts for a quarter of the population, which leaves a large amount of your customers still needing to be reminded to report their meter readings back to you.
After all, neither customer or supplier want to rely on estimates when it comes down to billing. In fact, over the last 10 years only 12% of households have provided regular meter readings, resulting in many paying more than they should have.
These inaccurate bills obviously create tension between customer and provider. What may appear as the problem for the customer is the estimated bill, but really the problem is the difficult or inconvenient way for a customer to routinely provide an accurate reading.
Many utility providers rely on two channels for customers to submit meter readings: online or by phone, the latter of which is the option available to everyone and is the method of choice for the elderly.
Everyone is familiar with the horror stories of call-wait times and for a number of providers these are backed up by research from Which? who found that Spark Energy’s average call length time was 27 minutes 21 seconds. Not only is this too long, it’ll cost the customer both the customer (in terms of making the call), and also the provider (in terms of internal resource).
If call agents are spending time handling calls for simple administrative tasks such as inputting meter readings, then less time can be spent handling calls for tasks that require an agent to solve or handle, unless you have a very well staffed call centre.
A voice solution will take away meter reading requests and other routine tasks such as making a payment, and the cost of a simple IVR and payment solution is minimal compared to gaining more time and resource for your call centre. Customers will experience shorter wait times as lines aren’t being held up by others needing to deliver meter readings or organise payments.
Once implemented, an IVR interaction will cost much less when compared to an agent-based call too. In a study conducted by us, we found that the average live agent call costs on average £3.87. Compare this with an average cost of 65p for an IVR interaction and the cost savings will soon mount up.
Technology can be a great asset to providing a better customer experience and level of service for your business. Although it can come with an initial build fee, the efficiency of a tech solution will recoup its initial cost and continue to save money in the long run.
What are the next steps?
We’ve worked with a variety of different utility providers to provide more engaging and cost-effective customers service solutions.
To find out how SMS and our next generation communication channels can help you contact our team on 0345 356 5758 / [email protected] for more information.