With a decreasing demand for energy, new players disrupting the energy retail market and customers having more options to manage their utility consumption, it’s more important than ever for Utilities to explore ways of strengthening and lengthening relationships with their customer. Home Services offerings represent successful strategies for Utility companies who want to be a more relevant in their customer’s lives.
Homeowners are rarely prepared for the unexpected
Homeowners often get caught unprepared when breakdowns happen. A 2016 biannual survey by HomeServe USA found that 56% of homeowners have less than $1,000 set aside for home repairs, yet 59% experience such a situation every year.
“We find that many homeowners are still unaware that certain repairs aren’t covered by basic homeowner’s insurance,” explains Tom Rusin, HomeServe global CEO of memberships. This “leaves them susceptible to the high costs of emergency home repairs they never expected and often can’t afford.”
Utilities can alleviate the burden on their customers by offering them Home Assistance cover either on a subscription basis or bundled as part of the utility supply offering. This will give Utilities the opportunity to delight their customers when they need it the most thus making themselves more relevant in their lives.
Homeowners are stressed about finding reliable tradespeople
Homeowners the world over have many worries when it comes to keeping their homes in good working order. One of their primary concerns is how they go about finding and hiring reliable tradespeople when something goes wrong or when they need maintenance. A 2017 report by Aviva found that in the UK, 54% have a hard time getting tradespeople to come out to them while a study by Helly Hansen Workwear revealed 40% have had a bad experience with tradespeople. HomeServe’s own global survey, the Engagement Opportunity, found that around 80% of homeowners are afraid of being overcharged and worried that the work will be of poor quality.
This is one area where Utilities could intervene, helping homeowners identify and locate reliable tradespeople. By lending a helping hand in moments of crisis, they can strengthen their relationships with customers. To that end, Utilities could become credible providers of home services packages.
Creating value-added propositions
Home services propositions
Home Assistance Services can enable Utility companies to improve their connection with customers, strengthening and lengthening their relationship in the process. Home Services offerings come in many shapes and often include annual or monthly payment schemes.
They can include coverage for annual service and emergency repair of heating/air con and electrical systems, as well as water leaks and blockages. Almost 60% of homeowners showed an interest in buying such a proposition, according to the Engagement Opportunity, with 71% saying it would give them peace of mind.
Other propositions include selling or providing customers with smart devices to detect breakdowns and monitor energy use. Centrica, Britain’s largest energy supplier, sees zero growth from energy supply in the future and wants to expand further into the already successful Home Services market. “We must turn ourselves into a 21st century energy and services company,” says Chief Executive Iain Conn.
Holistic home services propositions and technologies can also support a Utility’s positioning as a one-stop-shop for home and energy management solutions. ‘Engagement platforms’ which integrate solutions such as home expert sourcing (akin to HomeServe’s Habitissimo) and flexible and transparent energy purchasing as seen with Octopus Energy), could fundamentally shift perceptions of the role of Utility companies within the home.
Enel, Europe’s biggest Utility, has launched Enel-X as a separate entity tasked with finding new ways of leveraging technology to transform itself into the “Google of energy,” says Chief Executive Officer Francesco Venturini. “Energy companies, including Enel, need to provide different services to the same consumer,” says Javier Suarez, an analyst at Mediobanca SpA in Milan.
Trust in Utilities
There is strong evidence that Home Services offerings have a positive impact on customer relationships and that customers view their Utility as the logical provider of such services.
A HomeServe USA study for example, shows that emergency home repair service policy holders rate their Utility much higher than non-policy holders – a 40% increase for gas providers and a 36% increase for electric Utilities. Additionally, 59% of non-policy holders would have a better opinion of their Utility if they were offered an emergency repair service plan.
Key data from a HomeServe analysis of gas customers also supports the argument that Utilities should embrace Home Services. It found that 65% would like Utilities to offer valuable services and programs beyond the core commodity while 72% of customers who hold a Home Assistance policy have a favourable or very favourable view of Utilities.
Three essential factors for effective Home Services programmes
It’s clear adding Home Services propositions to their offerings could help Utilities strengthen and lengthen their relationships with their customers in this fast-evolving environment. That said in order to succeed, Utilities must ensure their programmes consider the following factors.
- It must be useful
For a home services package to be successful, it must cover issues that customers consider relevant to the maintenance of their home. Homeowners surveyed in the Engagement Opportunity report put electric failures (70%), gas leaks (65%) blocked drains (50%) and HVAC breakdowns (33%) as the top of their worry list.
For a programme to be perceived as having a high value, it must offer benefits that alleviate customers’ greatest concerns. Claims levels within Home Assistance programs are typically much higher than home insurance, enabling customers to benefit from the programme more easily.
- It must be easy to use
No matter what the activity sector, a customer programme that’s difficult to understand is bound to fail from the get-go. To succeed, home services offerings must be easy to purchase, easy to understand, and easy to use. Times of emergency are not moments when a customer wants to decipher confusing information. They need to be able to find help with a click or a simple phone call.
Additionally, customers appreciate being able to log their requests for repair as well as track their progress in the same way they’re now used to track the delivery of their online purchases. To that end, HomeServe has developed an app that allows customers to do just that. In its 2016 Flipping the Switch report, PwC explained how the energy sector would have to develop “more direct consumer-to-utility relationships, along the lines of consumer banking or online shopping.”
Spanish Utility company Iberdrola for example, offers a full range of home services options for their customers alongside their core energy products. Conscious of the fact that utility services can sometimes be complex and difficult to understand, they introduced a video, and voice chatbot on their website to help customers get a better sense of the services on offer.
- It must offer exceptional quality
At a time when tech companies are taking the utility sector by storm, it’s more important than ever for Utilities to offer excellent customer service including doing the right thing for customers, even when no one is looking. That may include little touches like taking extra care with elderly and vulnerable customers or getting the basics right every time – getting the repair done quickly, effectively and with a smile.
Jo Causon, CEO of the Institute of Customer Service, which publishes the UKCSI Customer Satisfaction Survey twice a year, argues that “organisations should not focus on short-term fixes, but rather ensure that their approach to customer service is a long-term strategic commitment that constantly adapts to the changing needs of customers.”
Leveraging Home Services
Done properly, Home services offerings have the potential to strengthen and lengthen relationships with customers. They provide more opportunities for communication and engagement, services that are much needed, and a chance to delight customers at their moment of need.
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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’.