Dreams of carbon and trust

2020 ended in a blizzard of policy. There’s a lot to be stimulated by and optimistic about. Amongst the detailed research on cost of capital, on routes to net zero, on infrastructure and through innovation there’s room for people too. The Energy White Paper, the Committee on Climate Change, Ofgem’s RIIO-2 settlement and the Ten Point Plan all envisage a radically different energy sector. And quickly.

Decentralisation, decarbonisation, digitisation and demand cannot be met by building and investing alone. Consumers will have a veto on how and when we get to net zero. Low carbon won’t happen without high trust. We will need customer service, customer insight and customer centricity as though our lives depend on it: because they do. The products, services and infrastructure which will deliver this energy future will involve widespread behavioural change and disruption to settled patterns in a way that other changes, such as the switchover to digital TV or even the smart meter rollout, have not.

Whether we are talking about electric vehicles, heat pumps, hydrogen or smart devices or demand shaping, we are expecting people to take up new modes of consumption and engagement for all of this innovation and investment in infrastructure to pay off and save the planet. This is the most exciting, daunting and existential challenge faced by any service industry in history.

Clearly the sector has changed significantly since privatisation, but a vestigial tail can still be traced in the body even as evolution has progressed. Energy has long been a commodity. Some of the customer service practices we see as the ombudsman owe more to an account management approach than the deep insights and consumer psychology which other sectors have developed in those two or three decades since privatisation.

At the same time, as an essential service, energy brings responsibilities and reputational risks that few other sectors have to confront. Energy retail is very low margin, yet some of the skills and sophistication required of front-line teams are rarely found outside of social work or healthcare. An industry that regularly is found towards the bottom of the benchmarking tables by Institute of Customer Service or Which? is colliding with the opportunity and the imperative of selling new products and new services. And since many of these involve behavioural change they will need to trade on confidence and trust.

Fierce pressures on margins and investment have driven change in customer service functions over recent years. Outsourcing and digitisation are two responses to reduce costs and to keep under the price cap. Platforms and managed services offer options to cut costs in the short term. But what of the longer term questions of trust and engagement? Employed strategically and thoughtfully, technology can be one of the enablers to a new relationship with customers, applied as blunt force automation it could further disengage and disenfranchise.

The most successful companies are recognising that thinking needs to be broader. Investing in customer centricity is more than buying a platform or the latest tech solution- it is about a wider operating model and culture. Unit cost and NPS may seem like sensible measures and targets today, but are they the right ones to underpin the transition which we are about to go through. What do they tell us about credibility, engagement and legitimacy?

Investment and innovation in the infrastructure of things is encouraging and inspiring. But it’s time for an infrastructure of trust. Of engagement. Of insight. I believe this is one of the most profound strategic questions facing not just the energy sector but our whole economy and society over the decade ahead. And to me this means that questions about how, when and where to invest in trust are amongst the most important for companies, investors and regulators today and tomorrow. Marketing, story-telling and customer service are some of the most important capabilities needed for net zero. How are we developing and securing them? How might we rethink front end customer operations as the engine rooms of engagement and trust? Where might we want to invest (or allow for investment as a regulator) in service and in trust?

The next ten years will determine whether we are on the trajectory for net zero or not. We must take every opportunity we have to understand customers better, to make them feel reassured and protected in buying into new products, new services and new ways of life. We need as much focus on trust this decade as we do on carbon. Net-zero is a field of dreams where we cannot simply build it and wait for them to come.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of Sustainability First.