The transformation clock is ticking: time for utility brands to invest in digital

16 September 2022

The utility landscape has shifted significantly over the past decade. Until as recently as 2014, the ‘Big Six’ - made up of British Gas, EDF Energy, E.ON, Npower, Scottish Power and SSE - accounted for over 90% of the UK’s total domestic energy supply. This had fallen below 70% by 2021, by which point Ovo Energy had purchased SSE and E.ON had taken over Npower.

What does differentiation via digital transformation mean for utility brands? And how can the process be derisked?

A new wave of customers are reviewing their utility allegiances. More than 10m UK consumers switched energy suppliers in 2020, compared to only 6m in 2016. But with current energy market conditions, rising costs and the death of cheap fixed rate tariffs - price is no longer the obvious driver for consumer switching.

The gap between competitors is shrinking - and consumer expectations have changed post-pandemic. Customer experience (CX) is now the dominant differentiator. PwC’s research found that 73% of consumers cite experience as a determining factor when considering a purchase. Delivering seamless, convenient experiences has to be prioritised.

Overhauling your virtual presence is the first step on this journey. Investment in digital transformation has skyrocketed in the past few years as businesses realised they must meet these new consumer expectations. Global digital transformation spend is forecast to hit $2.8tn by 2025 - up from $1tn in 2018.

It’s a two-way street…

Premium CX is a win-win for consumers and brands - 94% of consumers that enjoy positive experiences will become repeat customers.

The utility sector, however, has been slower than some to acknowledge CX’s ability to act as a differentiator. A 2020 Maintel study found that over 35% of UK consumers ranked the utility industry as worst in terms of customer service. And innovative challenger brands have been quick to capitalise on this opportunity - where traditional providers have not been fast enough to respond.

Octopus Energy, founded in 2015, has already built a community of more than 3m customers. And it is the brand’s user-centric approach and slick digital experience - rather than cheaper tariffs - which have caused consumers to flock. Octopus led Which?’s overall customer service rankings in 2022 with a score of 70%.

Updating legacy systems and improving internal process efficiency is part of digital transformations - but brands cannot neglect the importance of customer-facing actions. Improving consumers’ lives and experiences is an effective way to demonstrate that your brand cares.

Successful transformations don’t happen overnight. They require an in-depth understanding of your audience, a tried-and-tested methodology and an innovative approach. Appointing Shout Digital as your digital partner provides you access to all 3.

Leading the digital revolution

At Shout, we’re committed to designing and creating inclusive experiences and developing a deeper understanding of how people access a service - both online and offline. Our insight-based approach allows us to identify sector, brand and project-specific challenges - and then create effective, user-focussed digital solutions.

Brands cannot afford to pigeonhole themselves - looking at the entire digital ecosystem is vital. Northumbrian Water (NWL), one of the UK’s leading water providers, tasked us with building an innovative, customer-facing mobile application that delivered a smooth customer journey.

NWL’s innovative ‘DropSwap’ campaign was designed to tap into the rise of conscious consumerism. We took this further and used a gamified approach to enhance app engagement. This involved a three-step process:

Customer completes in-app activity, such as uploading meter reading or making a payment
‘Spin the wheel’ activity allows customers to win points, which can be donated to one of the charitable organisations on NWL’s shortlist
NWL provides a financial donation to the winning charity at the end of the month

‘DropSwap’, since being rolled out, has facilitated a 32% increase in active users, 125% increase in app-registrations - and 56% increase in meter reading submissions. But utility brands don’t necessarily have to look in-sector for digital transformation guidance.

Our work with the European Rugby Finals, for example, utilised geo-fencing technology to deliver real-time and pre-prepared notifications to attendees, depending on their location. Utility brands could tweak this approach to provide consumers with relevant updates about impending maintenance work.

No time like the present

The cost of living crisis looks set to continue into the winter and if promotional offers to drive switching are off the table, then it will be the brands offering best-in-class experiences that win. This starts by embracing greater digitisation.

Digital transformations have the potential to breathe fresh life into your CX - provided there is sufficient direction. Appointing an experienced digital partner is key to unlocking new, bespoke innovation. And with challenger brands continuing to make a charge, there is no time like the present.

Shout Digital delivers exceptional digital experiences which transform lives - both for brands and consumers. To find out more about how we can guide your digital transformation, get in touch today.

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