Paperless and personal driving digital utility strategies
Utilities are focusing on personalisation and paperless billing as they strive to increase engagement as a result of the digital changes accelerated by the pandemic.
These are among the key trends identified in Questline’s 2021 Energy Utility Benchmarks Report, now in its seventh year, which evaluated digital marketing data from 450 energy utility clients, and more than 356 million email messages.
"Energy utility customers looked to their service providers for aid and education during the 2020 pandemic," said Dave Reim, CEO and President of Questline.
"They opened more emails and engaged with more content than ever before. The true value of a digital customer relationship was realized as utilities who did not have established lines of digital communication struggled to reach customers with important messages during the outbreak. Maintaining and growing these digital relationships will be a priority for energy utilities in 2021."
Accelerated adoption of paperless billing
Data showed a 53% higher click to open rate (CTOR) on eBill campaigns in 2020 compared to 2019. This is the largest jump in Benchmarks Report history, showcasing the willingness of energy consumers to switch to digital solutions for reasons of safety and convenience.
Customers are looking for energy savings
During the initial months of the pandemic customers engaged with promotional emails with an 18% higher open rate and 27% higher click-through rate than the previous year. Messages about energy efficiency proved the most successful, highlighting growing consumer interest in learning ways to save energy and money.
Overall rise in digital engagement
Email open rates hit an all-time high at 28%, a 14% increase from the previous year. Digital adoption accelerated among all audiences as they looked to their energy service providers for help. During the initial months of the pandemic email open rates were 44% higher than the overall benchmark.
Success with personalisation
Segmented eNewsletters saw a 22% higher open rate and 44% higher CTR compared to unsegmented eNewsletters. Energy customers are looking for communications that match their specific needs and utilities are seeing success with more sophisticated and personalized marketing.
Virtual events effective for utility business customers
Webinar production for Questline’s energy utility clients increased by 86% in 2020. Popular events were related to safety and money-saving programs, resonating most with facility managers and key accounts.
Articles remain top content format, with video on the rise
Of top content consumed by residential and business customers, articles made up 62% and 74%, respectively. Video consumption continues to rise in popularity, particularly with residential audiences.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.