1. Knowing Your Customer & Achieving Sustainable Growth
Effective Risk Strategy for Energy Suppliers Using Credit Reference Agency Data
331 CONSULTANCY

2. 360o Customer Lifecycle Benefits
Maintaining quality customer records
Identifying cross sell & up sell opportunities
Identify vulnerability using verified data sources
Target the most valuable customers
Manage the prospect pool to avoid duplication and create a +ve feedback loop
Low cost tracing solutions
Prioritise debt accounts to utilise staff resource effectively
Apply appropriate strategy depending on financial circumstances
Debt Management
Prospecting
Customer Management
Reduce the acquisition costs with automation
Define pricing and terms based on risk
Create service options to maximize new business success
Acquisition
Commercial & Consumer Credit data can be used to benefit an organisation across the customer lifecycle from..
Prospecting and successful acquisition to…
Effective customer growth and efficient debt management
The effective use of internal & external data supports the digital, low cost automated customer experience
12/04/2016
331 Consultancy

3. Low Cost & Low Risk Customer Acquisition
Minimise Operational Costs
Use automated data services to verify ID minimising saving manual resources
Verifying DD details automatically in the first instance saves time correcting errors following a DD failure
Improve Customer Experience
On line integrated services allow customers to open an account with an efficient application process
Manual resources will be focused on more complex cases
Reduce Fraud
Externally verified data sources will help identify potentially fraudulent applications
Reduce Debt
Payment terms offered appropriate to the risk of delinquent payment behaviour
Analysis for an energy supplier showed that 30% of debt is held by 4% of the customer population ranked by risk score
Medium sized energy company saw 30% of high risk customers cancel DD within 90 days of account opening
12/04/2016
331 Consultancy

4. Customer Management Excellence
Maintain Quality Customer Data
Regularly update customer data to maintain accurate phone and contact details
Monitor risk profiles and apply appropriate pre-delinquency segmentation
Streamline COT/Occupier Process
Utilise 3rd party data sources to identify new occupiers
Use COT alerts and models to focus home move process resources
Cross/Up Sell Strategies
Regular assessment of the active customer base to identify the best up & cross sell targets – dual fuel, energy saving schemes, insurance, broadband, telecoms or financial services
12/04/2016
331 Consultancy

5. Manage Debt Effectively & Customers Sensitively
Target Collections resources effectively
Segment debt cases into appropriate groups i.e. self cure, high risk, vulnerable
Allocate collections cases in priority order to the appropriate team
Treat Customers Fairly & Sensitively
Use a holistic view of customers financial status to set the tone of collections conversation
Identify vulnerable customers for support schemes
Identify the non-compliant customers from the unfortunate and desperate segments
Help Customers Improve Credit Rating
Data sharing will motivate customers to better manage their energy account
Good payment behaviour will improve credit scores
Delinquent payment behaviour is detrimental to credit scores and can lead to a default
Positive data sharing will significantly help population segments not well represented on the CRA databases
12/04/2016
331 Consultancy

6. Reduce Debt by 1/3
Predictive scorecards can be used at the point of application to discriminate between “good” accounts and “bad” accounts.
The chart illustrates how using a score cut off the majority of bad accounts can be avoided at the cost of small number of the good accounts
This method is frequently used to avoid at least 30% of debt
At score band 5 & below, 33% of the bads are represented but only 5% of the goods
12/04/2016
331 Consultancy

7. Supercharge Benefits by Data Sharing Data sharing is a reciprocal arrangement that by its very nature can be extremely beneficial to smaller companies looking to gain valuable insights into business partners.
Energy suppliers will help their customers improve their credit rating by contributing to the CRA data sharing programs. The benefit is greater to populations without access to typical credit services
The Energy supplier will also benefit from access to a truly holistic view of its applicants and customers financial activity
B2B organisations can use the huge volume of consumer data to boost the insight into SME’s by data sharing
The predictive quality of commercial scorecards is improved by over 50% by including the consumer credit data of an SME’s directors
The inclusion of the directors consumer data is managed by the CRA allowing the supplier to assess potential customers systematically and with confidence
The customer will experience a quick and hassle free application process. There will always be borderline cases but these can be minimised by systematic use of the data to create conditional offers. Conditional offers can help the sales process by ensuring sales teams are empowered by the credit assessment process.
12/04/2016
331 Consultancy

8. Support Digital Customer Engagement Reduce Operational Costs
Increasing automation will reduce operational costs and support digital sales and customer engagement
Customers applications can be processed in real time and offers made immediately
Data can be used to remove the need for paper proofs and agent review in many cases.
12/04/2016
331 Consultancy

9. Business Survey Questions
How do you currently attract new customers?
What sales channels do you have?
What is the mix between the sales channels?
Can you give a decision on an application immediately? How does the commercial sales process differ from the consumer?
What is the minimum data characteristics you need to complete an application?
How do you verify the accuracy of the information provided by the applicant?
How many DD failures occur each month?
How many DD failures are related to cancelled instructions versus avoidable technical failures?
How do you obtain the MPAN numbers associated with an address?
Do you have a strategy for maintaining accurate customer contact data?
What different payment methods do you offer?
How do you decide what payment method to offer?
What is your collections process?
Do you have different collections paths?
How do you decide what path a customer should be on?
How do you manage moving a customer from one path to another?
What %age of TO is the total value of debt?
Is there a recognizable trend in this value?
Do you segment the debt into groups i.e. tenants vs homeowners, COT vs COS, broker vs web vs phone, campaign code?
Is the age of debt growing?
What proportion of debt do you write off?
Do you use DCA’s to collect debt on your behalf?
What is your debt sale strategy?
What are your plans to improve operational efficiency?
12/04/2016
331 Consultancy