Along with other regulated industries, the utilities sector has specific obligations with which to adhere where customer communications are concerned. As well as needing to be transparent, straightforward and clear, utility suppliers are duty-bound to communicate with their customers on an ongoing basis – in our experience they are continually issuing statements, bills, contract letters and operational information. Energy suppliers also have to prove to Ofgem that they have engaged with customers about their energy use and the cost benefits of switching tariffs.
This is a huge undertaking – Opus Trust Marketing alone sends out over 60 million communications every year for energy companies, as well as 18 million communications on behalf of water companies.
While Ofgem is currently consulting on streamlining customer communications, the sector’s obligations aren’t about to go away any time soon. And with energy suppliers facing fines if they don’t communicate correctly, they can’t afford to get it wrong. Furthermore, providing high-quality communications in a timely manner has an effect on customer service, making them an important part of the water industry’s service incentive mechanism (SIM) scores and PR19.
Of course, the rise of digital technology means there are a variety of new channels that can be used to communicate. Alongside traditional mail, consumers are likely to receive emails and SMS messages from utilities providers, and are, in most cases, provided with secure online accounts. So, as you would expect, our business has seen an uplift in electronic communications, with print reducing by about 5 per cent each year across the board.
However, while today’s consumers might be inherently digitally-savvy, this doesn’t mean digital channels are always the best way to communicate with them; indeed, the majority of our customers still see real value in post.
In fact, a Royal Mail report suggests that if a message is important or sensitive, and you want to be sure the customer will open, read, trust and engage with it, then mail is almost certainly the right way to deliver it.
Royal Mail’s research revealed that 87 per cent of consumers rate messages delivered by mail as believable, compared to 48 per cent for email, and 65 per cent feel confident the contents of their mail remain private. It also showed that 72 per cent of people often read and review some of their mail at a time when they can give it their full attention. Furthermore, when people are sent sensitive or confidential account information, 51 per cent prefer to be contacted by mail, compared to 35 per cent by email, with the remainder preferring to hear by phone (12 per cent) or text (one per cent). In addition, bills and statements stay in the home for an average of 45 days, providing multiple opportunities for people to reread them, and engage with them more deeply.
The report also refers to an IPA TouchPoints survey, which shows that mail drives a range of commercially relevant responses, including enquiries, purchases and service renewals. All of these actions have seen an upward trend in the past year.
We would therefore advise that communications requiring a high level of customer engagement or that have an important call to action – such as welcome packs, statements, bills and contract and operational information – will have greater impact if they are printed and posted to the recipient.
New digital channels are still important, but they should be used to supplement, rather than replace, physical mail – and this approach can be really valuable in terms of improving engagement.
Indeed, any move to digital channels needs to be about enhancing customer service – and the customer must perceive it as being beneficial. Businesses generally move to digital communications to reduce operational costs – and the customer will realise this. Therefore, they need to see the value and feel their service has been upgraded, otherwise any cost savings achieved won’t be sustainable.
Most of our clients are investing in a mixture of traditional post and electronic solutions, depending on the message and the customer group. Of course, specific customer requirements need to be considered too – for example, generally speaking, elderly people are probably less likely to want to receive digital messages. How vulnerable customers are communicated with also needs to be a big consideration – Ofgem has a Priority Service Register, and Ofwat has recently announced that it is going to report on how water companies serve, support and protect customers in vulnerable circumstances.
A communications strategy should be focused on contacting the right customer, at the right time and via the right channel. While today’s new technology is making communications easier and cheaper, it is important to use a channel that suits customer preferences, and is most likely to achieve engagement and the desired outcome.