For many in this space (and every other, for that matter), the adoption of AI is currently a hot topic, especially with ongoing concerns around data sharing. AI offers great potential to both suppliers and end customers. With the rollout of SMETS2 meters, energy suppliers could greatly benefit from the increasing accessibility and continuous advancements of AI. This rollout is set to provide utility companies with an unparalleled amount of data, which, when paired with the capabilities of AI, has the potential to streamline the distribution of energy and improve the customer experience.  

What is the impact of adopting AI for a utility company? 

AI solutions present the opportunity to increase key factors such as revenue, efficiency and positive customer experiences, as well as retrieve accurate data insights and predictive modelling. Does this eliminate the need for energy experts and customer service teams? No, we don’t believe so. However, we do believe that the benefit of adopting AI into service processes will be felt through the reduced cost to serve, minimising waste, and increasing employee satisfaction- resulting in enhanced NPS and CSAT scores. Ultimately, allowing AI to identify issues and provide relevant data will limit how much an agent must manually analyse and enable them to provide an easier and better service.  

How else could we predict this will help energy customers?  

Every active household appliance has a unique usage signature. By using the capabilities of SMETS2 meters, energy suppliers may be able to relay usage data back to the customer within their monthly bill. This process would allow customers to see both the environmental impact of their usage and pinpoint any billing issues they are experiencing back to a specific appliance. AI can then harness customer usage data to answer queries within self-serve tools or create tailored tips for reducing energy consumption for the individual customer.  

This could create healthier billing outcomes, drive down complaints and reduce customer contact times with their supplier. More accurate billing may also lead to energy suppliers observing higher CSAT and NPS scores, achieved by the customer’s improved understanding of their usage. Looking forward, self-serve platforms powered by AI should be a key focus for businesses, saving experienced human resources to respond to more difficult queries where perhaps a more technical or empathetic response is required.  

Additionally, this customer usage data could be stored in a centralised database and used by AI to provide data-driven insights to local governing authorities. A third party would collect these insights to highlight areas experiencing fuel poverty and need further resource investment. AI could generate this by analysing socioeconomic and SMETS2 data. As a result of this adoption and consenting to the use of their data, customers in these areas may benefit from having a more attentive local authority.  

How do we think AI could support businesses in working alongside government targets? 

AI insights may give utility companies a clearer understanding of their environmental impact and that of the customer. With the government’s target of moving towards net zero by 2050, AI’s insights will be essential for suppliers to move towards an electricity-fuelled society. Following the initiative to move away from fossil fuel-powered energy, we expect the country’s electricity usage to more than double by 2050. Couple this with the country’s supply generation moving from thousands of plants to millions of solar assets; customer consumption data becomes invaluable.  

Smart metering data will be the key to showing real-time usage demands and allow DNOs (Distribution Network Operators) to distribute energy effectively. This data will also be paramount to helping suppliers to work with their customers towards achieving net zero.  

How easy do we think this will be?  

So far, the development and distribution of smart metering technology hasn’t been simple, and its proven unreliability has caused a great loss of confidence in the technology. In 2023, OFGEM recorded an 18% increase in complaints to suppliers relating to smart metering between quarters 3 and 4. In a recent report from the Department of Energy and Net Zero, it has been stated that approximately 4 million (12% of smart meters) were outdated or non-communicating. This existing distrust of metering performance is unlikely to support the ongoing rollout of SMETS2 meters, which will come with its own challenges.

We predict that encouraging the uptake of SMETS2 meters and AI-driven platforms will require companies to invest in a value-driven proposition where the customers will learn how they can expect to benefit from this new technology. With this buy-in, we can anticipate that AI will enhance the customer experience provided by contact centre team members and self-service platforms. However, this enhancement will be underpinned by suppliers obtaining customer consent.  

You can expect to hear more from us on all things utilities. Why not check out our work in that area here?
Or, feel free to get in touch to see how our expertise can support you in achieving your goals.  

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The global cost of living crisis has had a profound impact on consumers and businesses alike. Consumers are struggling to pay for life’s essentials whilst business leaders are dealing with supply chain issues, resource costs and rising competition.  

The challenging environment has prompted government officials and regulatory bodies to act, imposing price caps on energy costs and previously offering supplements to help customers in covering the cost of energy.  

What is the Energy Price Cap?  

As energy bills have continued to rise during the cost-of-living crisis, the “price cap” has become a hot topic among worried households. Yet, despite this, around 54% of customers still aren’t sure what the “price cap” is or how it affects them. 

The energy price cap was introduced in 2019 to place limitations on the maximum amount energy suppliers can charge consumers on “default tariffs”. It aimed to ensure that consumers could compare vendors effectively and evaluate deals easily.  

Now that cheaper fixed rates have almost disappeared from the market, the energy price cap is more important to consumers than ever before, with millions of households sitting on a default tariff. 

The price cap consists of various costs, including the wholesale cost of electricity and gas, the cost of supplying energy and VAT. Notably, the cap controls the amount a supplier can charge for each kilowatt hour of electricity and gas, as well as standing charges – it doesn’t guarantee any consumer’s annual bill will be below a certain amount.  

The 2023-2024 Price Cap Changes Household energy bills increased by 54% during 2022, despite the best efforts of government and regulatory bodies. However, in Autumn 2023, Ofgem announced an impending update to the price cap, which is now set to fall to under £2,000 per year for the first time in 18 months. From October 2023, the cap will be reduced from an average of £2,074 per year to £1,923 per year. This number is based on a “typical household energy bill”. For energy companies, the cap may seem like a worrying concept, reducing potential profits and placing more pressure on their bottom line. However, it also represents an opportunity for energy brands to reignite the loyalty of their consumers and improve long-term retention rates.  

The Growing Focus on Customer Experience 

Ofgem’s decision to lower the energy price cap is part of a much broader overall strategy to improve customer experience in the energy sector. Earlier this year, the organisation introduced a variety of new rules for energy teams to follow when interacting with consumers.  

For instance, starting this year, Ofgem will require energy companies to offer more comprehensive service to consumers across a range of channels (such as voice, text, and chat). Additionally, they are demanding 24/7 service for emergency situations, alongside an increased focus on assisting vulnerable customers with payment issues.  

Ofgem is also exploring other ways to repair the fractured relationships between consumers and their energy suppliers. For instance, compensation for consumers and businesses that lose power due to bad weather events has almost tripled.  

The maximum compensation consumers can receive due to severe storms has now increased to around £2,000, up from £700. This change follows a review of how distribution network operators responded to Storm Arwen in 2021, which left 40,000 consumers across the UK without power for more than three days.  

What Will Energy Suppliers Need to Do Next? 

• Invest in preparation: As compensation for outages increases, energy companies will need to take extra precautions to ensure they’re prepared for unexpected issues.  
• Expand the customer service team: Ofgem will now require energy companies to deliver 24/7 service for emergencies, as well as comprehensive support across a variety of channels. This could mean not only hiring and training additional in-house staff but leveraging outsourced support from experts to ensure round-the-clock service.  
• Leverage analytics: Going forward, energy companies will be required to share insights into their customer experience metrics and satisfaction scores. Investing in robust analytical tools will help businesses detect potential causes of diminished customer satisfaction, so they can take a data-driven approach to growth. 
• Prioritise customer loyalty: When consumers look to switch energy suppliers again, they’ll make decisions based not just on pricing, but on the customer service companies can provide.  
• Be ready to innovate:  Leveraging self-service AI tools, omnichannel communication methods and robust AI solutions for insights will help to give these businesses a competitive edge. 

As ever, the utilities landscape is one of change, but this change can be really positive for suppliers and customers alike. Here at DDC OS, we are specialists in utilities outsourcing. We have supported new entrants, challenger brands and market leaders in delivering exceptional customer service and an efficient back-office operation focused on continuous improvement. Why not see how we could help you…  

Contact us today! 

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According to Ofgem director Neil Lawrence, consumers have long struggled to access the quality support and service they need from energy providers. The new rules aim to reduce the delays and frustration citizens face when they need help.  

So, how will these regulations impact businesses in the years ahead? 

Exploring the New Rules Implemented by Ofgem 

Over the last few years, Ofgem noticed an increase in negative sentiment from domestic consumers towards their energy providers. Not only are rising energy prices placing vulnerable consumers under significant financial pressure, but many are also failing to respond to customer requests for support in a timely manner. Ofgem’s proposed series of reforms, set to begin rolling out in December 2023, aim to address these problems. 

For households, the proposals include: 

• More comprehensive customer service: Ofgem will require energy supplier inquiry lines to stay open longer, including on weekends and evenings. Additionally, they will require companies to make it easier to contact teams through multiple methods, including phone lines, web-chat, email, and other digital platforms.  
   
• Emergency support: The new guidelines will ask businesses to provide 24/7 emergency support to customers who are cut off from power or gas supply due to issues like meter faults. This will require companies to invest in round-the-clock customer service teams. 
   
• Supporting vulnerable customers: Companies will now be required to prioritise customers in vulnerable situations. They’ll also need to deliver more effective support to customers struggling with bills, including early intervention guidance and temporary repayment holidays for those unable to pay.  
   

• Keeping consumers informed: Suppliers will be required to share insights into customer service performance. This is intended to help customers make better decisions when switching between vendors.  

To address the non-domestic market, Ofgem has begun to adapt the Retail Energy Code to avoid excessive delays during tenancy changes. Additionally, they will be urging suppliers to be more flexible with businesses that have already agreed to peak fixed-rate prices. 

Companies from all industries have been increasing their focus on “customer experience” as their core differentiating factor. 88% of companies now prioritise customer experience as a core component of excellent performance. Unfortunately, many utilities and energy companies in the UK have struggled to live up to expectations. 

It has been suggested that the energy crisis made it harder for consumers to switch suppliers due to a lack of price differentiation, and therefore, suppliers may have reduced focus on customer service without the fear of losing customers.  

The new reforms introduced by Ofgem should push energy companies to increase their focus once again on customer service. After all, they’ll now be required to offer comprehensive 24/7 emergency service, build their own omnichannel communication strategies and report on customer service metrics.  

Of course, these changes will lead to some challenges for business leaders. Going forward, energy companies will be under more pressure than ever to adhere to rising customer experience expectations.  

The Benefits for Suppliers 

Ofgem believes the new reforms will help to create more resilient energy companies, as well as delivering significant benefits to consumers. For instance, the regulatory group is considering asking suppliers to “ring-fence” a portion of customer credit balances. This move would allow energy suppliers to stay resilient in the face of severe but potentially emerging market shocks. At the same time, consumers would benefit from a more stable energy market. The idea is to ensure companies can always hold a significant level of capital, making sure they can weather changes in energy prices going forward.  

At the same time, the new rules mean that energy suppliers can focus their attention on improving customer service and building loyalty with consumers. To stay competitive in this space, business leaders in the energy world will need to ensure they’re competing on the battleground that arguably matters most: customer experience.  

How to Adapt to the Changes  

The key to success is ensuring you have the right strategy in place to adhere to new rules for comprehensive service and customer support. Outsourcing is likely to be an option for many suppliers as the new rules immediately increase the coverage required.  

DDC OS are outsourcing specialists in the utilities space, supporting over 6m domestic customers across multiple suppliers. We have a breadth of experience and expertise that we utilise each day, creating strategic roadmaps with our clients to ensure they not only meet regulatory guidelines but also provide a fantastic customer experience.    

Whilst we have multiple operational sites across the UK, Balkans and Philippines, our goal isn’t simply to increase our client’s customer service team size but is to identify ways to encourage self-serve, focus on fixing issues in the back office that will help reduce the need to contact in the first place.  

Don’t just take our word for it. Contact DDC Outsourcing Solutions today to discover how you, like many other suppliers, can benefit from partnering with us.  

Alternatively, reach out directly to Jade Rogers, Director of Business Development to kick start the conversation straight away!