Utility Week Congress presentation "Back to the Future: An inclusive approach to customer care"
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Bristol Energy MD Peter Haigh's presentation at the 2017 Utility Week Congress. "Back to the Future: An inclusive approach to customer care".
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Utility Week Congress presentation "Back to the Future: An inclusive approach to customer care"
- 1. Back to the future: An inclusive approach to customer care Peter Haigh Managing Director, Bristol Energy @BristolEnergy
- 2. • Bristol City Council is our sole shareholder • Established in 2015; but 10 years in the making Set up to: • help people pay less for their energy • reinvest profits back into the Council • A new breed of publicly-owned supplier • In a climate where smaller suppliers are have increased market share Who is Bristol Energy? 2 Fair and ethical energy for all.
- 3. Why are we doing it? For the people • The market is dysfunctional. • Millions across the country are overpaying by an average of £300 a year on their bills • People are feeling ripped off. • In Bristol, 110,000 families are paying too much To help those who need it most • The lowest priced deals are often online only But those who need help the most, are often the least engaged and hardest to reach
- 4. How are we doing it? For the people The market is broken • Xx million across the country are overpaying by xx on their bills • In Bristol, that’s • The lowest deals are often on low cost channels • Yet 1 in 5 PPM users does not have internet access • Those who need the most help are hardest to reach • For the city - A way to support the city, providing money for essential services. - Circular economy For the city • Our profits will support essential services • Supporting people out of fuel poverty eases pressure on social and health services • Job creation • Building a sustainable Bristol
- 5. The story so far… Customers • We supply more than 100,000 customer meter points in around 60,000 homes nationwide • Saving them more than £13million a year to put back into the UK economy Products • Our best deals for local residents. My Green Plus: 100% PPA-backed green electricity. Highly competitive PPM deal, lower than price cap. Low SVT, and plans to withdraw this from the market. Channels • Over 85% of our business comes direct, with a reducing proportion coming from cost per sale channels… • …and in Bristol, taking August as an example, 98% of our sales came direct Colleagues • 170 new jobs in Bristol, 83% live in the city
- 6. Our service starts with our values • Fair and transparent tariffs, for everyone • Reinvesting back into local communities
- 7. And our people Lead by example: • Our leaders support and enable a culture totally focused on our customers Embedded customer care: • Serving our customers is a key element of everyone’s job description Responsible employer: • We are a responsible employer by continuing to invest in local communities and are committed to finding new ways to help
- 8. Responsible retailing… Our measures of success are different • Reducing fuel poverty is as important as profit • No profiteering at the expense of our customers In practice • Prioritising prepayment meter customers • One of first small suppliers to offer Warm Homes Discount • Offering all payment methods and multiple ways to switch • Face-to-face customer service • Partnering with like minded organisations in the region Fifth of customers are highly disengaged • More likely to be in disadvantaged circumstances • We’re finding new ways to reach them, using local intelligence, face-to-face channels
- 9. Multichannel approach • Phone / email / social media / in person Our balance between human and digital interaction: • Digital is important yes, but so is being visible in our community. • We are proud of our face-to-face customer service. • And our tariffs give people options: paper or paperless, direct debit or cheque, twitter or in person. Fair energy for ALL
- 10. Achievements Bristol Energy Hub Face to face customer service and a community event space
- 11. Positive energy in communities Helping homeless people • Replacing PCWs with affiliate deals with local charities • Raising money through affiliate deals to give hundreds of people a hot meal and a warm place to sleep for the night. Helping get young people into sport • We support the Bristol Sport Foundation • Helping 7,000 children to get active across the city Helping to tackle loneliness • Working with local charity LinkAge, bringing people together in the Bristol Energy Hub, for a tea and chat.
- 12. It pays to have a social purpose More people are choosing brands with a purpose that align with their own values • 87% of consumers want a “meaningful relationship” with brands • 40% want to choose brands that “have a clear purpose and act in the best interests of society” • 53% feel better buying a brand with a positive social and environmental impact
- 13. National brand with regional focus Why we can still be popular with a national audience Point to brands like: Yorkshire Tea, Chelsea building society, etc. 19% 24% 22% 23% 22% 28% 67% 9% 11% 14% 13% 16% 13% 9% 10% 9% 15% 15% 13% 12% 3% 14% 14% 17% 16% 14% 13% 3% 7% 7% 9% 9% 10% 8% 2% 8% 6% 6% 6% 8% 7% 4% 33% 29% 17% 17% 17% 18% 12% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% I wanted to support a Bristol company The person I spoke to was really helpful You are a force for social good, helping to tackle fuel poverty I like that I know where the profits are going You will have to be transparent and accountable, with strong governance from the Council Not one of the Big Six I was saving money by switching Really high High Quite high Neutral Quite low Low Really low It means something to our customers
- 14. Customers expect more… Values driving market disruption
Editor's Notes
- So the exam question we’re trying to answer is ‘What is the best way to deliver fair-priced energy to all, ensuring that you don’t leave behind those individuals who aren’t comfortable dealing online?’ 1. Create a free market which encourages competition, and rely on the open market to drive out the price inequality. Well we tried that and it didn’t work. We have 17m households arguably overpaying for their energy, many of whom are the very people who can least afford it. 2. Ensure fair, ethical, socially inclusive behaviours through locally state-owned supply. That’s the municipal supplier model. Ok so there’s only a handful of councils trying this, but so far, so good. As a council, here’s the potential to deliver against a number of very pressing needs around decarbonisation, social exclusion, spiralling health costs, while also delivering a much needed income stream. Whether this becomes a template for a national model of state ownership is a political discussion I’ll leave to others to debate, but from our experience, it offers opportunities and scope that we wouldn’t see in a traditional commercial set up.
- So, why was Bristol Energy set up? I think the original administration saw it as a good way to support their agenda for sustainability, and as a handy source of revenue. Under the current administration the emphasis is much more on social inclusion, and there is a much more realistic understanding of the costs of operation and speed of payback for an energy startup with a social conscience. So, we’re here for the people. 57 suppliers and counting, and it’s still a broken market, with most people not switching, no disincentive to overcharge – in fact the regulator having to take action to curb inflated prices – and 4m people unable to keep their homes warm.
- So, what about Bristol Energy? We are explicitly and deliberately not a not-for-profit. Why? Well, because we believe this gives us the freedom to recruit the people we need and to create a positive return for reinvestment by the council: - so that we can be a net contributor not a net drain, and So that we can repay our seed funding as soon as we can (in the context of our ethos and purpose) Bristol City Council’s guiding principle is Sustainable Inclusive Growth. We fully subscribe to this intent, Offering face-to-face, phone and online sales and service channels, Offering fair pricing to everyone, but saving the best deals for the best people - Bristol people!
- We have over 100,000 customer meter points on supply nationwide – including three in the Shetlands. We’ve saved our customers an estimated £13m annualised; a big chunk of which will flow into the local economy, rather than contributing to the dividends for some overseas shareholder We focus on direct acquisition as far as possible – dialling up our non-price credentials in an attempt to attract a different kind of customer – and in an attempt to get more control. We had a very unfortunate few weeks in the spring when we found ourselves very competitive on the comparison sites and were inundated with new business. Our service levels went west and the resultant Trustpilot reviews continue to serve as a reminder of the need for tight controls in this space. We’ve created 170 new jobs in Bristol, 83% of our people live in the city, and the overwhelming majority of them walk, cycle, train or get the bus to work. We’re a proud, sustainable, local employer. Our colleague retention and satisfaction is second to none – people love that we stand for something, that they can build a career with an ethically-led company with the will and the means to make a real difference in Bristol people’s lives.
- And even though Bristol is a beautiful and affluent city that’s been voted the UK’s best city to live in, it’s not without its issues. The negative social outcomes of fuel poverty and overcharging are stark: Social exclusion and loneliness, particularly among older people Poorer education and achievement outcomes for kids as a result of missed school days and an inability to focus on homework Consequent mental health issues, higher crime, lower employment More hospital and GP visits stemming from living in cold, damp homes Higher costs for the NHS and Adult Social Care Higher arrears and longer voids for social landlords, the council included An extremely troubling human cost Fuel poverty is caused by low incomes, high energy prices and energy inefficient housing and appliances. Typically these are owner occupiers and tenants of private landlords; Councils and RSLs are well on the way to nailing the issues with energy efficiency in their housing stock. 37% of all fuel-poor households are those living in properties with the lowest energy ratings . 21% of households in the private rented sector are fuel poor – they make up 38% of all fuel-poor households. Four out of five households in fuel poverty include children, older people, or someone with a long-term illness or disability. So it’s easy to see why a Council like Bristol, with some of the country’s most affluent and most deprived communities, would be interested in controlling some of its energy supply market. For Bristol Energy, it gives us a sense of purpose – to be a force for social good – and allows us to enter into a joint enterprise with the council to tackle some of these issues, and to work jointly on the effects of some of the cuts in central funding. For example, BCC have had to close several Citizen Service Points – their primary touchpoint for residents. We have a shop with around 15,000 sq ft of prime retail space that we want to be filled with local people. What better way to solve both problems than by joining forces and creating a pop-up CSP in our Harbourside shop? And we can take the idea on the road with mobile shops – half mobile library, CSP or banking access point, half energy shop where citizens can learn about how to save energy, switch, have their questions answered, all on their doorstep.
- So, as a Council-owned energy company, we have a slightly different set of metrics. YES, we still have volume, margin, retention and EBIT targets. But we also hold ourselves to account on fairness, inclusion, accessibility and sustainability. I wouldn’t want you to think it’s all plain sailing – there are occasional crises of confidence, but overall it encourages us to steer an even path between the two apparently conflicting goals. Further analysis of the Disengaged segment shows there is an entrenched group of mainly older consumers who are (at least partially) unaware of their options and are not minded to change suppliers or tariff. There is also a cohort of younger disengaged consumers who are more likely to be aware of their ability to change supplier, tariff or payment method, and less likely to have negative attitudes towards the energy market. However, their living situation or lack of motivation appears to stop them from engaging – the CBA Factor, which is really frustrating. This group potentially presents an important opportunity to work together with the Council to find different ways of presenting our story and encouraging them to switch.
- More people are choosing brands with a purpose that aligns with their own values 87% of consumers want a “meaningful relationship” with brands 40% want to choose brands that “have a clear purpose and act in the best interests of society” 53% feel better buying a brand with a positive social and environmental impact And more and more big, commercial, shareholder-accountable enterprises are discovering that brand purpose and profit go hand-in-hand: Unilever’s ‘sustainable living’ brands e.g. Dove & Ben & Jerry’s drive 50% of their growth, and grow 30% faster than others GE’s ‘ecomagination’ business - $12 billion invested, $160 billion revenues – is a social business delivering profit M&S ‘Plan A’ generated an additional £50 million in profit in just three years Ecotricity retain customers and generate substantial returns through their strength of purpose
- Cynics in the room might be thinking ‘This goody goody, lefty mumbo jumbo is all very well for the public sector, but it has absolutely no place in a modern commercial enterprise.’ Well, maybe. But large numbers of our customers like that we stand for something – and that means our national customers too. They like that… ‘Not one of the Establishment of the Big 6’ ‘There’s good governance and we’re accountable’ ‘They know where our profits are going’ ‘We’re a force for social good’