Is legacy technology undermining your growth strategies?
3 barriers to customer-centricity (and growth) for energy retailers
November 15, 2017
For energy retailers the easy ride is over.
It’s no longer simply a case of ‘delivering electrons to the end customer’.
The customer experience championed by the likes of Google, Amazon and Airbnb has become the new benchmark. Now your customers expect similarly convenient and personalized experiences from you.
But to provide this type of loyalty-engendering experience, energy retailers need to entirely reinvent the way they do business. You have to put customers at the heart of your culture, technology and processes. In other words, you need to become customer-centric.
Customer-centricity isn’t some fluffy marketing term – following this principle is now essential if you want to thrive and grow. After all, delighting customers aligns directly with your business goals of acquiring customers, reducing churn and increasing your average revenue per customer (ARPU).
However, for many energy retailers, legacy technology systems present insurmountable barriers to delivering a genuinely customer-centric service. Bearing in mind the extremely competitive energy retail market, this makes growing fast – or growing at all – an uphill battle.
We’ve taken a look at what today’s energy retail customers expect, alongside how legacy technology undermines energy retailers efforts to deliver this experience and stunts growth in the process.
Launching new products & promotions is complex and time consuming
One clear area customers expect more from today’s energy retailers is in their desire for value-added services.
In our recent conversation, Luke Stow, a CIO with a wealth of experience across multiple industries including Energy, cited this as a key opportunity for energy retailers reinventing their businesses.
“Customers are now looking for additional services and product ranges from their energy providers. This creates a wealth of opportunities…The potential to diversify their product ranges presents multiple exciting avenues of growth for energy retailers.”
The potential for growth that Luke alluded to is also reflected in the numbers, with energy businesses that increase the flexibility of their assets and offer new services seeing an increase in revenues by 15% or more.
But, while it’s a clear avenue for growth, for energy retailers with disparate legacy technology systems it’s an opportunity that remains out of grasp. Using a fractured, inflexible product catalog denies energy retailers the agility and rapid go-to-market they need to compete.
Ageing technology platforms mean that for product and marketing teams, delivering competitive offerings is nigh on impossible. Launching new products or creating promotions and bundles requires a high level of IT involvement and is achingly slow. As a result, providing contextual promotions or launching the value-added services and products customers desire, at the time they want them, is a real struggle.
With competitors offering timely and compelling marketing offers, and customers not getting the services they can get elsewhere, any ambitious energy retailer’s growth prospects are truly hamstrung without the ability to launch products and promotions rapidly.
Customer channels are siloed and inconvenient
Another way your customers’ expectations have evolved is in the way they expect to interact with you.
It’s no secret that customers want to use whichever channel is most convenient for them. Today, more often than not, this predominantly means self-serving online.
And this trend will only continue, with Gartner predicting that by 2020 customers will manage 85% of their relationship without interacting with a human. As a result, you don’t need us to tell you that providing self-service online is a must. But by no means does that mean it’s ok to neglect your other channels.
With companies that provide omnichannel customer engagement strategies retaining on average 89% of their customers, compared to 33% for companies with weak omnichannel customer engagement, the key to acquiring, engaging and retaining customers lies in the delivery of a coherent customer experience across every channel and touch point.
However, for energy retailers with archaic systems this simply isn’t possible. Siloed customer data means there’s no coherent view of customers, leaving your customer service teams with limited knowledge of a customer’s history and preferences.
This leads to the nightmare scenario where a customer is passed from channel to channel, each time having to repeat their details and request, only to end up back where they started. Today’s energy customer doesn’t have the patience, time or inclination to suffer this kind of disjointed service – they have too many options to choose from.
Without a technology platform that offers customers self service and gives you a clear real-time view of customer data, you can’t provide the frictionless customer experience, across every channel, that is so vital to both winning new customers and keeping current ones.
Inability to personalize sales & the customer journey
On top of the value-added services and joined-up experiences energy retail customers now want, they also desire personalized journeys, sales and services.
Recent research from our partners at Accenture showed that customers are more likely to buy from retailers who recognize them, remember previous purchases and tailor recommendations accordingly.
But, this kind of personalization has yet to become the norm in energy retail. Again, this largely stems from an inability to use the entirety of a customer’s data, with energy retailers only making use of 2% of data available to them.
If you’re unable to personalize your customer journey and sales, increasing your ARPU – along with your customer acquisition and retention – just isn’t going to happen.
Providing personalized customer journeys and recommendations makes your customers feel valued. It gives them just enough of that warm fuzzy feeling to increase their loyalty bit by bit, vital in an industry where churn averages between 25% – 35%. Meanwhile, tailored upsells and cross-sells are win-win, increasing your sales and giving customers more of the products and services they want.
If you have a platform that can automate the delivery of these personalized moments, or guide your sales team in the delivery of them, you will immediately see it reflected in your increased revenue.
Clearly, the use of legacy technology and disjointed systems is holding energy retailers back. As we’ve seen, ageing technology is undermining the delivery of the types of experiences today’s customers want, restricting your growth prospects in the process. While you can promote a customer-centric culture and experience, without the basis of the right technology, achieving a genuinely customer-centric solution just isn’t possible.