What More Can Companies Do To Identify And Support Vulnerable Customers?

A shift in perception

For many businesses, the pandemic brought customer vulnerability into stark focus. Individuals that struggled to weather the impact of lockdowns and lost earnings were at the mercy of their creditors, anxiously contemplating the relationship they’d built up over the months and years prior. While devastating, the crisis has at the very least given companies the opportunity to reevaluate and prioritise the customer-creditor relationship.
If there was any silver lining to be gleaned from the pandemic, it’s that this relationship between customer and creditor has been brought to the fore.

Work smarter, not harder

Smarter businesses have realised that managing customer debt is multifaceted and complex, and approaching it without understanding all sides of the issues is a surefire way to reduce payment collections and ultimately lose customers. Instead, customer debt should be viewed as a business challenge like any other, with textured and nuanced solutions that engage and empower customers on their own terms. Payment collections should be tailored in the same way marketing campaigns have evolved, assessing each customer based on their own circumstances and tailoring communications accordingly. For instance, the Water Services Regulation Authority, Ofwat, revealed in a recent report that those with young children were twice as likely to encounter difficulties paying their utility bills than other households – understanding these differences should allow companies to implement personalised customer journeys when it comes to debt collection, and develop proactive activities to help customers minimise and avoid debt problems. To this end, businesses have been working hard to collect data and gather insight into their vulnerable customers to deliver the best experience and maximise their chances of collecting outstanding payments.

This is great for those customers that have been recognised and ‘tagged’ as vulnerable, but what about the so-called ‘hidden vulnerable’ that businesses cannot see?
In a recent interview, an Ofwat spokesperson commented, “We know some customers need extra help to access support, and water companies have a range of services such as priority service registers, which list customers who need extra help, and the kind of assistance they need.” Yet according to their own research, many of the people who struggled financially throughout the COVID-19 pandemic actually had no knowledge of the financial support that was available, from their water supplier or any other utility provider.

This raises a crucial question – what more should utility providers be doing to identify vulnerable customers and target their support instead of relying on customers themselves to speak up? Only 3% of customers in the UK received financial support from their water company in 2020, but a staggering 35% sought additional credit via credit cards, overdrafts and short term loans to pay their bills. Had these vulnerable customers been proactively identified by their creditor (in this case, their water provider), they would not have needed to expose themselves to more financial risk, lowering their ability to pay in future.

Future proofing your business

Given the progress and increased focus in the media and by regulators, it’s clear there’s a lot that the utility industry can learn from other industries when it comes to identifying vulnerable clients. Astrosat specialises in capturing data and patterns via satellites that would otherwise be invisible to the human eye. Their latest project, Isolation Plus, combines satellite data such as access to transport, green spaces and other geographical information, with demographic information from things like the Census, to visually map where things like poverty and social isolation could lead to financial vulnerability.

We’ll soon be living in an age where companies are able to tailor their customer experience around debt in the same way they do for their marketing, based on geography, demographics, and individual interests. It’s well within the interests of business to help people pre-empt money troubles and proactively support those that are vulnerable, not only to improve their collection rates, but to futureproof their customer base as a whole.