Despite Liz Truss’s plans to freeze the energy price cap for two years for England, Scotland and Wales, by reducing the unit cost of energy, under the regulated price cap mechanism millions of people will still struggle to pay their energy bills.
Energy prices are still rising. On 1 October, the annual energy bill for a typical household is going to rise from £1,971 to £2,500. That’s a staggering 27% increase.
According to the Office For National Statistics (ONS), which surveyed 4,963 households between 31 August and 11 September, 90% of Brits are seeing their cost of living increase, with four out of five adults worried about the impact of higher bills. According to the same ONS snapshot survey 48% of those responsible for paying for energy are now finding it ‘very’ or ‘somewhat difficult’ to afford their bill.
But of course energy is not the only cost that’s rising. Inflation has been recorded at a 40-year high, interest rates continue to rise and fuel and food prices are rocketing. Consumers need all the help they can get to keep costs down. Especially lower-income families that spend a greater share of their budgets on essentials like food and energy bills.
As we head into the colder winter months energy suppliers can help their customers to save money by reducing their energy consumption and therefore, their bills – whether that’s through changing habits and behaviours to reduce usage, or by helping them to make their homes more energy efficient.
Introducing the power of the nudge
The solution is a nudge based customer engagement programme. ‘Nudging’ is a proven behavioural science based theory, and it forms the basis of Advizzo’s successful customer engagement strategies and solutions. It’s based on the theory that people are often unable to make good decisions when they lack experience, context, knowledge, or they are overcome with inertia.
More often than not, we allow our autonomous nervous system to make decisions on our behalf, bypassing the conscious thinking process. The solution involves guiding people in the right direction – towards the more beneficial option, which in this case, is to save energy.
Perhaps an important note about our customer engagement programmes for energy and water suppliers is that we don’t just rely on social and digital media to connect with customers. There’s a large category of vulnerable customers, such as the elderly and disabled, that benefit from offline methods of communication – which is where the fact that we use multiple channels including old fashioned mail, is incredibly powerful. We’re strong advocates in multi-channel marketing and communications. Why not read our blog to understand the importance of multi-channel customer engagement.
You can also read more about the power of the nudge theory and how it can help your customers to save energy. And we’ve written in more detail about how our customer engagement programmes provide proactive support for vulnerable customers by identifying who they are, segmenting them into appropriate categories and targeting them with appropriate advice and support.
Supporting smart meter roll-out
Smart meters are a great way of incentivising customers to reduce their energy consumption. That’s because they provide a visual aid and a constant reminder of how much energy is being used and how much it’s costing the bill payer. For customers who are keeping track of spending it’s a great nudge towards switching lights and devices off.
Our customer engagement programmes provide proactive support for your smart meter roll-out. They provide the perfect channel for energy suppliers to educate and inform customers on the advantages that smart meters can deliver, such as negating the need to submit a meter reading, accurate bills, as well as reduced consumption. FAQs that customers have about smart meters can also be addressed, such as informing customers that installations are free; that they can still switch supplier; that their data is protected; as well as how to request a smart meter.
One of the most persuasive messages that we can send to an energy customer is a comparison of their average consumption, with that of similar households in their neighbourhood. We call it a neighbour comparison report. Providing customers with personalised consumption comparisons with neighbours that have reduced their bill having installed a smart meter can prove to be very persuasive in encouraging a customer to convert. Read more about how behavioural science can support smart meter deployment.
If you need further evidence that Advizzo can help your customers to reduce their energy bills and also support and promote your smart meter roll out programme, then we’d love to the opportunity to talk to you. Get in touch today.