Intelligent Energy Customer Acquisition

In an increasingly challenging regulatory environment, is the emergence of intelligent data management and analysis technologies the key to the future of telemarketing?

 

The changing GB Energy Landscape

Since the business energy & domestic energy markets deregulated into competitive markets the change in industry focus and regulation has experienced a period of constant change.

The retail market once dominated by the Big 6 energy suppliers, has continuously grown and has now expanded to contain over 35 energy suppliers.  New entrants to the market are taking advantage of their agility and new breed of customer service, to win growing numbers of customers away from the Big 6 energy suppliers.  The big 6 however remain constrained by a mixture of legacy systems and migration to new world systems, suffering from large numbers of customer complaints and delivering poor service levels.

With the Competition & Markets Authority(CMA) market reforms due in June 2016, there has never been a better time for new entrants to enter the market, and take advantage of the conditions, that will see the restrictions on simplified tariffs lifted, and the creation of a disengaged customer database for all suppliers to access.

The expansion of the Half-Hourly market to include businesses with a profile class 5-8 meter will bring much greater visibility of energy usage to SME businesses, and the rollout of domestic Smart meters to all households by 2020 will bring a much more engaged and connected retail customer base.

 

Energy Customer Acquisition

During this period of change the methods of acquiring and retaining energy customers has also changed dramatically, where up until 2010 one of the largest acquisition channels was the direct field sales channel, where field based agents acquired customers on their doorsteps and in shopping centres.  This channel was blighted by a large number of compliance issues, which led to greater regulation, and then its eventual demise.  In 2011 & 2012 all Suppliers closed down their Field sales channels, and started to replace the customer acquisition through Price Comparison Websites(PCWs) and Outbound Telesales.

This shift in the market and introduction of many more independent suppliers, has generated a rise in importance of the Price Comparison Websites, who now account for a large proportion of customer switches, and was previously regulated by the Ofgem Confidence Code.

Suppliers who have turned to outbound telesales for their direct sales channel to deliver predictable new customer acquisition volumes, have found increased regulation and compliance from Ofcom, TPS and the DMA, which has led some of the larger suppliers to outsource the activity to deliver the volumes required.

Despite the increase in number of customers switching away from the big 5 suppliers to independents, there still remains a large proportion customers who are disengaged and not actively switching despite being on a more expensive energy deal.  Only 15% of the domestic market is actively switching each year, which has prompted the CMA market reforms, to attempt to stimulate the market and increase the amount of engaged customers.

One of the milestone reforms that the CMA have proposed is to create a disengaged customer database, where each energy supplier would be obligated to submit details of their customers who have not switched within the last three years, to allow other competitor suppliers to market their best tariffs to them.  This is a controversial change to the market, and is highly unusual in a competitive retail market, and will bring new challenges to energy customer acquisition for energy suppliers.

 

Compliant Outbound Customer Acquisition

Current figures show energy companies are responsible for 13% of complaints reported to OFCOM for outbound calling, with an estimated average of 520 million cold telesales calls per annum being made by energy suppliers in the UK.

Since the closure of the Direct Field Channels, energy suppliers have been struggling with how to compliantly acquire new customers via the telesales channel, whether that be through internal telesales teams or through outsourced partners.

Supply Licence Condition 25 and the Retail Market Review (RMR) mean that the Suppliers Telesales agent individual performance is now more important than ever.  As suppliers don’t have an Independent single view of outsource and internal sales partners/channels, there is an inherent lack of visibility and control.

Managing compliance across multiple internal and outsourced partners requires a lot of resource and risk controls to ensure adherence to Ofcom, Ofgem, TPS, DMA and even FCA regulations.  Silent calls and over dialling in outbound telemarketing is resulting in large penalties for those companies who are not in control of these risk areas.

 

Intelligence led Acquisition

C-CENTRIC provides a system that captures, scores and transmits leads in real time direct to a call centre’s dialler. This focus on supplying warm leads in real time immediately helps to improve contact rates, consumer receptiveness and sales conversion.

By receiving lead data in real time via C-CAM, companies can make the most of opportunities to contact warm prospects such as those who have just completed a web-form, or expressed interest in an offer, or abandoned an online shopping transaction – or maybe requested a call back resulting from an inbound call or field visit.

C-CAM also enables clients to switch data delivery dynamically between contact centres and so allocate different data ratio splits and recycling rules according to data performance. This enables faster and improved file penetration and also allows companies to divert data between call centres to the highest performing teams. Why pay a premium for warm leads and then not have the ability to allocate them dynamically in real time to those best placed to maximise conversion?