What constitutes a vulnerable customer? This is a question that has vexed utility companies for years, and there is still no definitive answer. People who may be considered vulnerable by the government or by utility companies don’t necessarily see themselves as “vulnerable”, which can make offering them help difficult.
At a meeting of the Trust Council, held at the House of Commons in October, a mix of senior representatives from energy and water companies large and small gathered to discuss customer vulnerability, which has moved even higher up the political agenda with rising levels of personal debt and the rollout of Universal Credit.
The council was set up by Utility Week, in association with WNS Global Services, to provide a forum for chief executives and senior directors with responsibility for customer service and corporate strategy to meet up regularly to share ideas and experiences, and work towards potential solutions.
The word “vulnerability” has been given many different definitions over time, but it is now widely recognised that what is considered to be vulnerability can change according to a customer’s changing circumstances – therefore any definition needs to be more sophisticated than the simple idea it is all about income.
It is not always helpful to label a customer “vulnerable”. Not everyone who finds themselves in difficult circumstances views themselves as a “vulnerable customer”. There may also be a natural disinclination for customers to identify themselves as such, and this can make reaching them difficult for utility companies. One solution to this problem is the Priority Services register now operated by many utilities. The label “priority” may be easier for a customer to accept than the label “vulnerable”.
The problem is set to get worse with the transition to a flexible energy system, as customers who are more affluent are able to access green energy and off-grid energy more easily. This means that over time the grid could become more expensive for those customers who remain on it – and this will certainly include customers in vulnerable circumstances.
Attendees highlighted fundamental differences between energy and water. A representative from the water sector suggested energy has “got it right” with tariffs that are standard regardless of where you live. One of the key things the water sector will need to address as it moves forward is the issue of differences between tariffs depending on geography. Help should not be dependent on a postcode lottery according to where you live, one delegate suggested.
At the roundtable, a joined-up approach was repeatedly called for, and a suggestion was made that there should be a “market operator” to hold and share information on vulnerable customers across all utility sectors. This would be a massive move forward for the industry and would oblige utility sector participants to collaborate. Providing such a move does not fall foul of data protection rules, it would not take long to come up with a simple, slick system, delegates argued.
Other opportunities for identifying and reaching vulnerable customers were mooted. Face-to-face contact is particularly effective, though labour-intensive and expensive. Working with third parties such as charities had also been a route to success for some of the utilities present. Ultimately, all agreed that however hard it may be to identify and reach vulnerable customers, the work must continue – and collaboration is key.
Views from the speakers
Chris Lloyd, senior vice president, WNS Global Services UK
“There’s clearly great enthusiasm towards the vulnerable customer agenda in both the water and energy sectors, but the strategies for detecting, managing and communicating with this customer base is varied and often proving fairly expensive. It’s not only utility companies who will be reaching out to vulnerable customers but wider communities too, and a joined-up approach across sectors could be of benefit, maybe leveraging the introduction of some kind of common platform.”
Louise Beardmore, customer service director, United Utilities
“In many instances, we are the only ones who have a true view of all of the customers within a region who need help and support – that is a unique position that utility companies have. How we collaborate and work together, so we know where those customers in vulnerable circumstances are, is hugely important.”
Dave Ford, director of operations, Bristol Energy
“Not everyone who is vulnerable sees themselves in that way. Regardless of whether they trust energy companies or not, they might feel they’re doing very well, and coping with their situation. Therefore, there is a role for other trusted parties to identify people who are in difficult situations and make the right referrals. Because we can help someone out of fuel poverty, we don’t only benefit that person; we can save money for local authorities, the NHS and government too.”
Victoria Macgregor, director of energy, Citizens Advice
“There has always been a degree of focus on vulnerable customers, but this has increased in recent times. This is partly driven by the shift to viewing vulnerability as a principle rather than simply a tick box exercise, as well as broader changes in the country, which have affected household finances and mean more people have had a tougher time making ends meet.”
Ian Cain, utilities expert
“The critical need to engage is heightened in the case of vulnerable customers. For energy, accessing available financial support and using consumption patterns to advise and agree practical steps to lower bills is key. For water, the industry must find a consistent and acceptable response to some real problems… I believe aligned multi-agency consumer visits can play an integral role in achieving acceptance and participation in our smart metering future.”
Key themes
- “Vulnerability” is difficult to define. Customers who may be considered vulnerable do not always view themselves that way.
- Labels are important. Someone who doesn’t want to be labelled “vulnerable” may not mind being labelled a “priority customer”.
- The industry must work together so that customers who need help are identified, especially in the event of an emergency.
- Smart technologies such as smart meters could have unintended consequences, such as increasing bills for the most vulnerable.
- There are fundamental differences between energy and water. Water tariffs are determined by where people live, which is not always easy to explain to customers.