Beyond the Commodity: A Total Wallet Approach to LMI Customer Support

In the bustling ecosystem of the Modern Utility CX, we've seen tremendous growth, innovation, and adaptation to changing consumer needs and preferences from website modernization to customer self service and customer engagement strategies. Yet, even with these advancements, the broader market of price inflation, wage stagnation and higher energy prices reinforce a stark and pressing challenge on a growing portion of our customer base. Our Low and Middle Income (LMI) customers continue to face formidable hurdles in securing affordable power as a component of their household budget.

Recent numbers paint a disturbing image for this cohort. A study by the National Energy Assistance Directors Association highlighted that, in 2022 alone, over 20 million households fell behind on their electric bills. Digging deeper, data from the US Census Bureau Household Pulse Survey in 2022 showcased the sacrifices American households make for energy. More than 34% of US households cut back on basic expenses to settle their energy bills, and over 23% reported their inability to pay at least a portion of their bills in the same timeframe.

While utilities have been commendably proactive in crafting programs for LMI customers, like payment assistance plans, special rates and pre-paid energy programs, these initiatives often focus solely on the energy budget. If a growing portion of customers have either fallen behind on their energy bills or have had to pay only partially towards their energy accounts, clearly their budgets are stretched across multiple categories. Energy bills aren't isolated expenses for LMI customers, or even often the largest component of their household budgets, but with COVID payment moratoriums bad habits and inflation pressure on food and housing expenses, these customers regularly face the challenge of choosing which critical bills to pay on a monthly basis. A truly effective solution would consider the entirety of an LMI customer's budget, or their complete "wallet." Perhaps it's time for a creative approach from utilities to help our customers more holistically with their household budgets and proactively engage “beyond the commodity.”

Consider the following programs

Collaborative Discounts: Partner with local businesses, like grocery stores and transportation services, to offer bundled discounts for LMI customers. Such partnerships can also act as a stimulus for local economies, enhancing community support. Challenge your local SMB and C&I customers to offer special discounts or savings programs for the community, which can be broadcast to utility customers through email, bill inserts, and social campaigns.

Community Savings Resources: Many community and government agencies support a host of programs helping LMI customers with assistance for household expenses, but customers may not be aware of the help. Consider enhancing the utility website with community resource links and information, and promoting that knowledge base through proactive outreach to customers

• Build new pages on your website and invite community groups to contribute content

• Promote the new community section to customers with a proactive email and bill insert campaign

• Train customer service teams in billing and collections to recommend the site to customers facing billing challenges

• Send a reminder email to customers following calls to Billing teams or if their bills become overdue throughout the year

Discounts on Critical Home Services: Internet and wireless plans increase prices ahead of the inflation rate, and households can’t do without those critical services today. Federal subsidies like the Affordable Connectivity Programs help customers reduce their cost for Internet to the home, increasing the money available to pay other bills. Many utilities with Mover Services programs have partners that can also find alternative providers for lower cost internet and wireless plans including special offers and rebates that would help the utility’s current customers to save. Consider speaking with your vendor to look for a “savers” program in addition to a mover support plan.

Referral Programs: Competitive Energy Suppliers can create programs where LMI customers are rewarded for referring others to available savings opportunities or programs. These rewards could be in the form of gift cards to local grocery stores, pharmacies, or other essentials.

Customers always look to utilities to be a trusted and credible advisor for energy services. Our LMI customers face an extended period of financial pressure exacerbated by higher energy costs, as well as financial challenges beyond the industry’s control. But, by broadening our view to consider the holistic financial health of LMI customers, utilities can support an array of savings programs to support those customers beyond the commodity. The potential rewards - a stronger community, greater loyalty, and lasting customer engagement pay dividends well beyond managing our delinquent accounts and collections. Small investments like the recommendations above pay lasting and significant returns to our customers, our community and the utility. The time seems ripe for utilities to not just power homes but also lighten the load on every LMI wallet.