Challenging the Challengers: How can smaller energy suppliers streamline communication and payments in collections?

By Mark Sussex, Head of International, illion Digital Tech Solutions 

UK energy suppliers, both big and small, are feeling the pressure of increased wholesale prices, price caps, competition and regulation. Since the beginning of 2018, sixteen challenger energy companies have collapsed and the combined profits of the six largest providers for domestic energy supply decreased by 35% in 2018.1

Ofgem’s report ‘Vulnerable consumers in the energy market 2019’ revealed that the overall number of customers in debt increased by 4.2% in electricity and 4.8% in gas during 2018. Amongst these customers there was an increase in those in arrears without a repayment plan, meaning that there is an growth in the number of customers in debt who need to be contacted to work out their repayment options. Ofgem regulation requires the suppliers to address affordability issues and treat customers in arrears fairly by offering “certain services for customers who are in payment difficulties, and to take all reasonable steps to ascertain the customer’s ability to pay.”

Undertaking affordability assessments is the first step in setting affordable payment plans. Income and expenditure (I&E) forms completed via phone and paper is often a time-consuming and expensive process. These assessments can create a poor customer journey and don’t always capture the most accurate data, plus smaller providers may not have the infrastructure in place to undertake these.

We have worked with a number of providers in other regulated industries to implement self-service, digital channels that enable the agent, customer or both to complete I&E forms across multiple devices, as well as on the phone. The results are transformative.  Where previously an I&E analysis could take agents and customers an average of 45 minutes, at a cost £40-80 each, the omnichannel I&E process takes just 15 minutes typically.

This is because intelligent self-service data validation tools make the assessments more accurate and, consequently, the payment plans more realistic. Digital channels promote more collaboration between both parties and internally between departments, helping to better educate customers and give them more visibility and control over the I&E process.

For challenger brands, a digital affordability process not only lowers the burden and cost of assessments but also empowers them to better adhere to industry directives.

By harnessing back-end technology to streamline the collections process, smaller utilities companies can compete with larger providers in debt recovery and communications. Automated and omnichannel collections technologies, such as SMS, outbound and inbound IVR, mobile, email, web and portals better engage customers and encourage loyalty. Moreover, funds are recovered at an earlier stage and the cost of collections is reduced.

Omnichannel communications and payments channels also help to reduce early stage debt. Ofgem requires suppliers to not only manage and recover debt, but also focus on preventing debt. This means making early contact with customers before they accumulate debt. Digital messages and payments options that tie in with affordability assessments will improve the rate and speed of collections payments, reduce early stage debt and improve the collections experience for their customers.

Many of your good long-term customers may be struggling to pay their utilities bills, so focus on creating a consistent brand experience in collections that uses technology that effeciently assesses affordability, sets plans and collects payments.

1 ‘State of the energy market 2018’, Ofgem

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