Utility service providers deliver essential services to customers – services that keep homes warm, lights on and water running. Ensuring these services remain accessible is paramount. But we know that 20 million homes in the US are behind on paying those bills – or according to Bloomberg, experiencing one of the worst-ever crises in late utility payments due to rising electricity costs.
Historically, when customers fell behind on their bills, some utility companies would move to disconnect customers as an undesired next step to securing payment for their services. Many have moved away from this practice but the opportunity remains for utility companies to recover revenue without creating a negative customer experience. This starts by seeking to understand what customers are experiencing when they fall behind on their bills – let us tell you more.
What is scarcity mindset?
When faced with rising food prices, inflation rates and household expenses some customers may develop a scarcity mindset. Situations that are out of our control, like the above, can leave consumers feeling like they have limited time, money, or energy. According to Deloitte Insights, a state of scarcity may deplete us of the limited decision-making capacity that we have.
A scarcity mindset can lead to poor decision making and prioritization and creates barriers for companies that are looking to engage customers. However, if you understand what they are experiencing and tailor your communication accordingly, your ability to drive results increases.
Engaging customers experiencing scarcity mindset
In a recent report from Symend, we found that 54% of billpayers across the US and Canada have increasing money worries and 56% are overwhelmed by decisions. As a provider of essential services, you play a critical role in helping your customers overcome barriers and help nudge them in a direction that helps both their experience and your bottom line.
Here are three steps to get you started:
1. Simplify your communication
Unclear messaging or complex communication increases the risk of customers making an impulse decision that is not in their best interests. For someone experiencing scarcity mindset they can become easily confused or frustrated, which may lead them to defer or avoid the situation altogether.
Consider including offers or options that empower them to complete the task themselves, or highlight the positive outcomes associated with moving toward your desired action or offer.
2. Move to digital channels
Leveraging digital tools ensures you meet your customers where they are at. According to Pymnts, 51% of consumers are highly interested in digital bill pay and will pay for the service. In instances where customers are feeling overwhelmed, they may decide to call in to speak with someone on your team to help them navigate the resolution. Meeting them on digital channels, with clear, thoughtful communication can reduce your inbound call volumes and help keep your customers satisfied and engaged.
3. Gather feedback
You may believe that a customer is experiencing scarcity mindset, but every customer is unique and based on their individual experiences and motivations. If you are hitting ‘dead air’ with your customers, try requesting feedback or input to validate your assumptions. Here are a couple options to try if you are sending out a new offer:
- ‘Learn more’ – this can tell you that more or different information is required by the customer to inform their decision. You can then reach out or adjust your outreach to meet those needs.
- “Not interested right now” – if this is selected, it tells you that the customer doesn’t believe this is a fit for them. If you believe that this is in their best interest, the information needs to be presented differently.
Gathering feedback provides more opportunities for you to gain a better understanding of your customer so you can further adapt your communication.
Customers are affected by scarcity in different ways, whether it’s about their time, money, or other resources – all of which are more in demand than ever. As crucial service providers, utility companies need to recognize these challenges so you can better predict customers’ needs and behaviors. Tailoring your customer outreach based on these needs and behavior fosters trust and helps to create loyal customers for life.
Download our 2022 consumer report, The Great Shift in Billpayer Behavior, to discover more about what’s driving consumer behaviors. Find out what support service providers can offer customers to overcome the impact of exhaustion and uncertainty, and to engage with them more effectively.