Better Customer Service in Credit for Water Utilities through Artificial Intelligence

February 21, 2019
by David Lemon – 331 Consultancy

The 31st January 2019 was an important date for the UK water sector. On this day Ofwat published its initial assessment of the PR19 business plans submitted by suppliers.

Debt management is the area that interests me and so will be keen to read the ongoing feedback from Ofwat in response to the plans. The PWC Retail Efficiency Benchmarking report published in September 2017 unfavourably compared the debt management performance of the water sector against the energy, telco and local authorities mounting further pressure on debt performance for AMP7.

Customer service, affordable bills and innovative approaches are 3 of the 4 key themes that Ofwat will use to assess the plans. So how are water companies planning to address debt management challenges and align with the key themes from Ofwat?

Over the last few years water companies have started to embrace the combined use of data and technology to support a culture of customer engagement with the right message at the right time that supports improved customer services increases operational efficiency and introduces innovative technologies.
Data sources can be categorised into two segments:

  • Internal
  • External

Internal data will provide a view of a customer from data captured and stored as a result of the supply relationship. Simply this can be a name, an address a date of birth, any vulnerability or priority service codes and a history of payment behavior.

External data provided by data agencies will provide a view of the same individual from other organisations that will include alternative contact details and payment behaviours.

One of the keys to effective use of this data is the ability to interpret the values into a picture of the customer and their circumstances.
For instance, a customer with a spotless payment history that suddenly misses a payment arguably requires a different approach to a customer who regularly only pays following a final demand or threat of DCA or legal action.

Another important factor is the ability to systematically apply a set of rules to define the type of communication required in each circumstance. Software that manages the various segments of customers is important in at least two ways.

  • Firstly, the software should ensure that all customers within the process are following a path that is most appropriate to their circumstances such as “We have noticed that for the first time you have missed a payment. Please contact us to re-arrange the payment or discuss how we can help”.
  • Secondly the software should include the necessary audit framework that provides users with a comprehensive understanding of where all customers sit within the debt process and the relative success of recovery actions by customer segment. This facilitates a full understanding of which channels are successful and which remain challenging.

Combining internal and external data to create customer segments for differentiated treatments and implementing those treatments automatically is likely to be the approach that will return the biggest improvement in recovery rates.

This approach has the added advantage of aligning with Ofwat’s three key themes of customer service, maintaining affordable bills and innovation.

  • Customers receiving a message tailored to their circumstances are much less likely to complain and subsequently improving C-Mex ratings
  • Improved recovery rates reduce the pressure on margins allowing suppliers to maintain bills at affordable levels.
  • Automated systems deploying segmentation techniques are considered innovative and ultimately will free up resources to enhance customer service capacity more widely

Rimilia will be attending the Utilities Consumer Debt Conference on the 28th February 2019, showcasing their Rimilia Collect software that enables better customer service & collections through Artificial Intelligence.

Join us at the event and see how advanced data analytics helps identify vulnerable customers, how payment and collection plans can improve customer service and how automated SMS, letters and Email can maximise your collections.

​331 Consultancy was founded by David Lemon in 2016 and is based in the East Midlands, the crucible of the UK consumer credit industry! David has over 19 years experience in the credit data industry, delivering solutions in the utilities, banking, financial services and insurance sectors in the UK, Republic Of Ireland, Europe and Brazil.