For Energy & Utilities (E&U) companies in the U.K., earning sustained customer trust continues to be an elusive goal. Over the years, the sector has consistently lagged in cross-industry rankings for customer satisfaction. It was recently ranked eleventh out of thirteen sectors in the U.K. Customer Satisfaction Index that uses trust as a key factor to determine the sectors’ rankings.

The low level of customer trust in utilities is driven primarily by a lack of transparency in pricing and billing structures. In order to make these structures more transparent, utilities are making aggressive investments in disruptive technologies. For example, they are rolling out smart meters and embedding analytics across the value chain to track customers’ energy consumptions in real time.

While these technology-led initiatives are redefining the transactional relationship between utilities and their customers, they are also giving rise to a new form of vulnerability and service inequality – digital exclusion.

A survey by the U.K.-based energy regulator Ofgem offers insights into the socio-economic dynamics around digital exclusion. It reveals that wealthier customers exhibit a higher propensity to use smart meters compared to less well-off populations. The survey cites significant upfront capital costs as one the major deterrents in the wider adoption of smart, connected devices.

This disparity highlights the extent of digital exclusion among the less affluent and vulnerable customers. It is imperative, therefore, for utilities to bring this demographic into the digital fold. As more customers become receptive towards participating in the smart energy ecosystem, utilities will have greater opportunities to gain public trust.

The Pitfalls of Digital Exclusion

The digitally excluded segment of energy users typically comprises households that are either unable to afford smart home devices or lack the savvy to use them. Customers who refuse to deploy smart meters or decline to share their data with utility providers are also included in this segment.

This segment’s inability / reluctance to adopt smart devices offsets utilities’ efforts to build an ecosystem driven by transparency. The vast amount of data on consumer preferences collected by connected devices enables utilities to design customized tariffs that incentivize cost-effective energy consumption. Digitally excluded customers lose out on the opportunity to avail these personalized tariffs. They then eventually end up in a recurring cycle of higher energy costs and increased disengagement.

Digital exclusion can also give rise to market inequalities or potential malpractices that regulators are currently not equipped to address. Competitive utilities can deliberately exclude such customer segments from accessing competitively priced products due to their higher cost to serve. This can further fuel mistrust for utilities and may lead to further digital alienation.

Powering Trust That Endures

The E&U industry needs to build meaningful customer relationships through superior experiences. This requires the integration of technology with industry and process expertise to identify, understand and address evolving customer needs. It also demands establishing credibility through transparent operations that can help utilities earn elusive customer trust.

The SMART-UP project is a good example of how vulnerable customers can be encouraged to change their energy-related behaviors. Over the last three years, SMART-UP has leveraged social media to sensitize vulnerable customers about the importance of adopting energy-efficient habits.

For utilities, shedding the ‘one-size-fits-all’ approach to adopt a people-centric strategy is critical to avert the roadblocks posed by digital exclusion in gaining customer trust. This strategy should include addressing the contentious issue of pricing in an open manner. If done correctly, this approach will enable utilities to achieve the right mix of business, technology and customer-centricity underpinned by trust.

Continue reading our next blog on what motivates the energy customer’s trust here.

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