In our Payments Guide to the Utility Sector, we touched on how digital transformation is influencing the development and growth of Australia's utility sector. How companies should adopt a robust payment strategy to aid customer experience.
In this follow-up post we're delving deeper into digital transformation and covering:
- How it's changed customer behaviour
- Customer relationship with the utility billing experience
- How purchase decisions are made
- Freedom of choice and visibility on spend
Four years ago Gartner predicted 80% of processes and products will be reinvented, digitised, or eliminated by 2020. And today it feels like Gartner could be right...
WHAT IS DIGITAL TRANSFORMATION
Digital transformation is the integration of digital technology into all areas of a business. This results in key organisational changes in how the business operates and the value delivered to customers.
The digital update is forcing companies to change their business models and adapt to new market and customer realities. Digital transformation is being driven by the consumer who expects a steady stream of relevant content to their needs.
Companies must embrace technology to keep up with the 'always on' consumer. Companies that engage in digital transformation create highly engages customers who are more likely to try new products or services from their preferred brand. Consumers are more likely to make a purchase even if a competitor has a better price.
UTILITIES INDUSTRY DIGITAL TRANSFORMATION CHALLENGES
- Utilities are being encouraged to improve and streamline operations to remain competitive. This means finding new ways to be more customer-centric and empowering customers with proactive and personalised services across all channels.
- The challenge for utilities is to evolve the existing customer experience in finding new ways to engage with customers and meet their changing requirements.
- Consumer expectations are shifting and evolving dramatically. When utilities are unable to meet expectations, customer satisfaction and loyalty can quickly decline. It's also never been easier for consumers to research and switch providers.
- Inconsistent customer service capabilities across various channels make it a challenge for utilities to control costs and ensure customer satisfaction.
DIGITAL DISRUPTION IN UTILITIES
Customer experience has recently become a priority for utility companies. Historically, due to little competition in the utilities sector, the customer experience dealing with utility companies was not a priority.
DIGITAL TRANSFORMATION UTILITY COMPANIES - INNOVATION IS COMING
Pre-digital, customers simply wanted to flick a switch to illuminate their business and homes at a fair price. Price was the key differentiator for the utility industry. Enter the digital age, where consumers expect more from their utility companies: personalised experiences, custom features and consumer-friendly interactions - on and offline.
The statistics support the trend: according to a survey commissioned by OpenText, 42% of Australian utility executives say customer services and experience are the key areas of their business most ripe for disruption.
Utility companies must shift to meet the digital consumer’s demand for smart, immediate, flexible and functional interactions.
While Australia is known worldwide for its rich natural energy supply, Australians pay some of the highest electricity bills in the world. SA tops the list with approximately AUD$0.50 per kWh, while the European Union average is just over AUD$0.30 per kWh. And in the U.S., gas fluctuates between AUD$0.10 and AUD$0.20.
DIGITAL TRANSFORMATION IN THE AUSTRALIAN UTILITIES SECTOR
One of Australia’s largest energy providers: AGL recently used digital transformation to enable their customers to harness solar power. They developed an online platform that allows users to trade solar energy. The purpose was to give customers more control over their energy use and reduce the cost of their bills. This movement started in Victoria, and involves consumers trading solar tokens that represent solar energy.
AGL is certainly helping consumers challenge the utility status quo by challenging existing utility business models - including the billing process.
SMART HOMES FOR THE SMARTER CONSUMER
A recent report by iProspect revealed 60% of Australians use voice search. Searching for information via Siri, Google Home, Alexa and Cortana is quickly becoming the new norm for consumers across a wide range of industries.
This ties into the rise of the smart home. There are now numerous apps and devices available for the energy-conscious and savvy consumer to track energy consumption by the minute, hour and day.
JouleBug is a green app, a game and social experience at once. It’s built for the energy-savvy and environmentally conscious consumer. It provides the user with information about their appliances and translates energy use into potentially sustainable practices to create healthy new habits.
RETHINKING UTILITY PRODUCTS AS CUSTOMER-CENTRIC OUTCOMES
The Utility sector is under definite pressure to meet customer demand for convenience. Consumers want to see all their buying data in one place and easier ways to view and pay their bills.
Digital disruption in the utilities sector is causing a shift in mindset from the ways of old to the new. No longer are utility companies perceived as sole providers of low cost commodities with little to no difference other than price. Digital transformation is redefining customer experiences and expectations, and utility companies are innovating to meet the new status quo.
Customer experience and digital transformation are intrinsically linked. A recent global consumer insights survey by PWC reveals that more than half of their consumer respondents paid bills online in 2018, with Generation Z leading the trend.
HOW CAN UTILITY PROVIDERS IMPROVE THEIR CUSTOMER EXPERIENCE?
- Improving clarity on how bills are calculated and providing seamless one-off, scheduled and recurring billing. Full visibility and control over bill settlement will help maintain good customer relationships as well meet consumer demand for more ways to pay bills.
- Self-service platforms, available online or through an app, help consumers make payments and track their accounts. Online billing and the ability to download and view bills on mobile are all options that put the customer first, putting the information they need in one location. Bill notification and settlement notifications should also be factored.
- Employ a sophisticated Direct Debit system that enables customers to pay via desktop, mobile or tablet in minutes. Your Direct Debit solution should be able to validate a customer’s bank details instantly to reduce the chance of failed mandates, while giving customers flexibility in frequency and dates of payment. It should integrate with your CRM, billing and finance systems to provide customers with support in real-time and customer payment history.
These innovations could play a central role in enabling utility providers of all shapes and sizes to respond positively and proactively to the wider pressures facing the sector.
A well-honed digital transformation strategy will enable a utility company to keep pace – or outperform – rising service and efficiency expectations. Enable utility providers to demonstrate exceptional transparency and regulatory outperformance, or competitive advantage.
THE UTILTY OF THE FUTURE
Digital transformation is making life easier for consumers in many markets, including the utility sector.
Importantly, digital transformation is about listening and identifying customer challenges before implementing a solution. Diagnosing where potential gaps in your existing customer experience lie will help determine what the future could look like - fuelled and informed by customer insight. Digital transformation doesn’t happen overnight, but the quickest firms to adopt technology that offers flexibility, transparency and simplicity to their customers will be the contenders best equipped to lead the pack.
Bambora’s trusted by some of Australia’s largest utility providers to power their payment systems. Contact us today if you’d like to join hundreds of businesses transforming seamless and frictionless payments to enhance your customer experience.