- Challenger energy supplier facing ~£75m debt book increase due to inefficient processes, a lack of collection campaigns, and little progress towards Ofgem smart meter install targets
- Our Debt Taskforce delivered improvements across the collection journey and meter install programme, supported by tactical campaigns and automatic reporting. We also created new processes to bill former pre-pay customers with outstanding debt, and collect cash from customers with multiple properties
- At the end of the 9-month project, our client reduced their debt book by ~£30m, collecting ~£5m from tactical campaigns and reducing time from bill to notice of intent by ~25% - also making significant progress towards meter targets
Challenge
Our client, a challenger energy supplier, faced a potential debt book increase of ~£75m by the end of their next financial year. This was partly due to the cost of living crisis and its impact on customers’ ability to pay, coupled with inefficiencies in the supplier’s approach to managing debt.
We supported our client by carrying out an in-depth review of its debt position, with a view to improving their operational processes at each stage of the collection journey, and ultimately mitigating the potential debt book increase.
Upon initial assessment, it was clear that a series of issues were present in the supplier’s processes. This included the absence of any bespoke campaigns for targeted collections, and poor reporting on overall collection performance.
We also recognised that a process was required for collections from customers with multiple properties, as well as billing former pre-pay customers with outstanding debt.
After diagnosing these issues, we set up a Debt Taskforce team of ~20 FTE and created an initial 4-week plan of improvement, upon request of our client. This included actions to support the client in meeting their Ofgem smart meter install targets, as progress in this area was clearly behind schedule.
Our approach
Our plan of improvement was based around six workstreams, which were identified by working with our client’s internal project owners.
These workstreams covered:
- Final debt collections
- B2B debt collections
- Tactical deployment
- Managing super customers
- Installing meters
- Debt collections strategy
We started by focussing on issues in our client’s existing processes, reviewing the end-to-end journey and increasing the intensity of customer contact.
This was supported by the introduction of tactical collection campaigns and an automatic performance reporting system, allowing the supplier to use customer data more effectively.
To rectify the other operational gaps noted above, we built new processes for managing customers with multiple properties, and billing former pre-pay customers. Our Debt Taskforce supported with the implementation of both processes, including the setup of monthly statements to ensure that payments can be split across accounts where necessary.
We also reviewed the supplier’s meter install process, identified reasons and provided solutions for the backlog of cancellations, supporting their progress towards targets with a clearer focus on utilising delivery channels.
Although we were initially briefed to complete a 4-week setup of this project, our client was impressed with the improvements delivered, and decided to extend to a 9-month implementation programme.
Results
Upon completion of the full programme, our improvements helped the supplier to avoid any increase in its debt position, instead reducing their debt book by ~£30m.
Collections from tactical campaigns contributed ~£5m to this reduction, while the journey from bill to notice of intent was shortened by ~25%, increasing efficiency in the end-to-end collection process.
Other notable improvements include a 30% reduction in customers paying on receipt of their final bill, and ~£300k of additional collections each month from customers with multiple properties.
During the project, our client reduced its total number of legacy meters by ~25% and booked ~15,000 new installs, driving significant progress towards its targets.
Our Debt Taskforce has now handed the project’s workstreams to the client’s internal team, who will continue to manage them moving forward.
