Can Utilities become more relevant in their customers’ lives through partnerships with Home Services providers?
This is a time of profound change for Utilities. Not only are they facing increased competition from new entrants in a shifting regulatory landscape, but they also need to be innovative in order to push the industry toward sustainability in a world with dwindling resources.
Today’s customers are also spoiled with superior experiences in other areas of their lives, prompting them to demand the same from their providers. They want more flexibility to explore new forms of energy and storage. They want real-time information to manage their consumption. They want access to new technology that will improve their quality of life.
According to The Engagement Opportunity for Utilities report commissioned by HomeServe, customers are also concerned with unexpected breakdowns in the home and they dread the process of finding dependable repairers who can fix their problem at a reasonable cost.
The Engagement Opportunity
The Engagement Opportunity study was designed to better understand the needs of consumers in this changing landscape particularly when it comes to home repairs and their experiences with service providers.
The study was conducted in 20 countries across the world. In each market, a representative sample of 1,000 homeowners in key urban areas was asked to respond to a quantitative online survey.
The results highlight homeowners’ concerns about major breakdowns in their home and the process of carrying out repairs, how they go about fixing the issue, and what they think of their Utility providers.
Ultimately, the goal of the study was to evaluate the potential for launching a home service plan in partnership with Utility companies worldwide. To that end, homeowners were also asked to evaluate a Home Assistance Cover concept and an online Home Expert Portal concept as well as indicate their level of interest in installation of a heating/cooling system and smart home devices.
Utility customers looking for help
One of the key findings of the report is that homeowners worry about the smooth functioning of their homes. More specifically, they worry about major breakdowns, how much it’s going to cost them to repair, and going through the hassle of finding and dealing with tradespeople to solve the issue.
Focused on the big stuff
The survey found that customers are more concerned about the big stuff (electric failure, gas leak, or blocked drain) than they are about appliance breakdowns. For example, a significant majority of respondents worry about electric failures (69%) and gas leaks (65%), particularly in Latin America.
Blocked drains round up the top 3, causing concern for 46% of Utility consumers globally. Understandably, heating/cooling breakdowns are particularly worrying for Utility customers who live in colder climates such as Northern Europe.
% of customers listing issue in their top 3 concerns of household breakdowns
Cost and frequency of breakdowns concern homeowners
No matter where they live, homeowners always worry about the cost and frequency of home repairs. Respondents scored cost concern at 3 out of 4 while they put the fear of being overcharged even higher at 3.2 out of 4.
Repairs to their heating/cooling system are seen as the costliest by utility customers, with respondents expecting to be US$186 out of pocket on average. Other issues such as electrics failure, gas leaks, and blocked drains are expected to cost between US$86 and over US$100 for each repair.
Considering gas leaks, blocked drains, and heating/cooling breakdowns happen roughly twice a year on average, this can put a significant financial burden on some households.
While the frequency of breakdowns in the home varies widely from one country to the next, it can highlight a general pattern and point to the areas where homeowners need help the most.
Finding and dealing with tradespeople a top source of stress
Any homeowner will remember at least one bad experience dealing with tradespeople. Perhaps they were let down when a supplier didn’t turn up or they had to wait endlessly for them to arrive.
While the report doesn’t explain why the breakdowns occur, one could hypothesize that poor workmanship is at the root of the problem, considering homeowners list it as one of their top worries when it comes to tradespeople. Respondents scored this concern at 3.3 out of 4 in almost every single market. The highest scores were registered in Latin America (3.52 out of 4).
“It’s clear that finding a suitable tradesperson for household repairs can be problematic with concerns related to quality, hassle, and cost,” concludes the report. “This presents an opportunity for those Utilities who aim to excel at quality control and customer service.”
When things go wrong
Currently, when homeowners are faced with a repair, they favour one of two approaches. Half prefer tackling it themselves or with the help of friends and family, while the other half prefers calling upon a supplier or making an insurance claim to solve the problem.
Homeowners in the Belgium have the highest DIY spirit (72%) while customers in India have the highest outsource mindset.
If they choose to hire someone to deal with their “emergency repairs, most respondents use two main sources of information: the internet and word of mouth (friends and family),” found the survey. In most markets, 49% of homeowners prefer to hit the Internet, except in Japan, China, and Korea (between 28 and 37%). But word of mouth is almost as popular (46%) overall, especially in Argentina (62%).
% of customers choosing friends and family or google search in the top two responses of sources of repair information
It’s no surprise then to see “advice from family” and “web searches” (29%) at the top of the channels that lead to a purchase globally.
Can Utilities provide the help homeowners need?
The survey asked homeowners a number of questions to evaluate their impression of Utilities. Providers should take pride in the fact that 71% of respondents are satisfied and 67% would be willing to recommend them. This is especially true for gas Utilities who came out on top in almost every market, scoring above average, compared to electricity and water providers.
But the good news stops there. When asked to attribute labels such as caring, engaged, and communicative to their Utilities, homeowners were a lot less generous, with the highest results barely making it past 30%. These low results highlight a perception problem but also “a key opportunity for Utilities – to improve their engagement with their customers and relevance in their homes,” says the report.
Home Assistance Services are among the possible ways Utilities can improve their connection with customers. In order to gauge awareness and interest for such services, HomeServe presented respondents with two concepts: one for Home Assistance Cover and the other for a Home Expert Portal.
Home Assistance Cover
The survey found that the concept of Home Assistance Cover is relatively unknown globally (36%). This is especially true in Korea and the Czech Republic compared to India, China, and Brazil where it’s better known.
Despite the lack of awereness, almost 60% of homeowner show interest in the idea and 63% believe their Utility company would be a suitable provider. This is obviously great news for Utilities as assistance services are a natural extension of their brand, says the report.
Things got even more positive when respondents were shown an actual proposition for such services.
“Not only did the level of interest rise by 8% in comparison to the concept but more importantly, almost 60% of respondents said they would be likely to buy the home assistance proposition clearly showing the appeal.”
When asked why they’re interested, homeowners list a variety of reasons but peace of mind is by far the most important factor (71%) followed by the ability to control costs and having access to a trusted supplier (almost 40% each). Peace of mind is especially important in China (86%), Japan (83%) and Romania (79%) while controlling cost is the main concern in India (63%), Turkey (55%), and Germany (50%).
The survey didn’t associate a price with the proposition instead leaving homeowners to indicate what they would be willing to pay. Here again, the results are very encouraging for Utilities since customers “expect to pay a substantial amount” for Home Assistance, says the report, with the perceived value of US$40/month on average surpassing “a typical selling price for this level of cover.”
Customers in Poland, the Netherlands, Australia and Turkey place the highest value (up to $94/month) on the services while Colombia and Russia expect to pay the least.
When asked how they would prefer to pay for Home Assistance Cover, most chose a monthly plan (42%), particularly in Latin America (51%), compared to a one-time annual payment (34%), which was the preferred method for 65% of respondents in China.
Home Expert Portal
The report shows that 49% of customers perform a web search when they’re looking for a supplier to repair a breakdown in their home. In addition, respondents indicate they use the internet to find a tradesperson for emergency repairs or home improvements on average 5 times a year, compared to shopping for groceries online 20 times per year and household goods 11 times per year.
This, in combination with their difficult relationship with tradespeople, might explain why homeowners are so interested in the proposition for a Home Expert Portal, which seems “like a natural extension of the way Utility consumers already shop.”
On average, 65% of homeowners find it appealing and 57% say they would likely use it. It’s particularly popular in Latin America (74%), where 72% of homeowners are likely to buy from a portal.
When looking more closely, what appeals to customers the most is the guarantee of quality workmanship (78%), which as we saw, is one of their main concerns. This is especially true in India, Latin America, Poland, and Romania.
Other popular factors include the ability to ask for a fixed price (72%), request a quote (71%), as well as have access to customer reviews and ratings (71%).
Time to seize the day for Utilities
HomeServe commissioned The Engagement Opportunity survey to highlight the many reasons why Utilities should consider offering Home Services.
First and foremost, they present Utilities with a great opportunity to improve their relationship with their customers. Even though the study found that homeowners are satisfied with their providers, it also shows that they don’t view them as caring and engaged organisations.
The survey found that homeowners are looking for peace of mind and are interested in Home Services propositions with more than half ready to purchase trade services from an online market or sign up for Home Assistance cover. Utility customers are even ready to pay a substantial amount to access these services and more than 60% on average believe their Utility company would be a suitable provider.
The results in the US prove the viability of the solution with an increase of up to 77% in customer satisfaction when Utilities add a HomeServe Home Assistance program to their services. It’s clear the door is wide open for Utilities ready to become more relevant in their customers’ lives. Considering most homeowners are still unaware that Home Assistance solutions exist means Utility companies ready to embrace new business models could steal a march.
Reflecting on our 25 years of supporting partners with their customer relationships, we have penned our thoughts on ‘becoming more relevant in your customers’ homes’.
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