Addressing Consumer Vulnerability in the Energy Sector

What is vulnerability?

The global pandemic, combined with the energy crisis and the ongoing cost of living challenges, has created a perfect storm for consumer vulnerability. Rates of vulnerability have risen to unprecedented levels and continue to climb. But what exactly is vulnerability, and how can it be defined and measured?

A vulnerable customer is someone who, due to their personal circumstances, is particularly susceptible to harm, especially when organisations fail to act with appropriate levels of care. These circumstances can be physical, mental, situational, or emotional. Many adults may not even realise that they have been or are currently considered ‘vulnerable.’ We go into this in more detail in our previous article. 

What’s the impact of this?

Vulnerability is not a fixed label but rather a state that people can experience temporarily or over a prolonged period. In this time of economic strain, organisations within the energy sector, such as utility providers and energy suppliers, must recognise the shifting needs of their consumers and offer more effective support to help them through these challenges.

So what’s the dilemma?

The rapid digitisation of customer interactions within the energy sector has increased significantly since the pandemic. Consumers are increasingly managing their energy accounts and bills online, using digital platforms for both convenience and accessibility. However, this shift creates challenges for energy companies in identifying vulnerable customers, as there are no physical cues or indicators in online interactions. In face-to-face settings, body language, tone of voice, or expressions can signal a customer’s vulnerability, but digital engagement relies solely on the information provided through screens.

Currently, the energy sector depends on customers to disclose their vulnerabilities and sign up to the priority services register (PSR). However, this presents several challenges. Firstly is the terminology of ‘vulnerability’ easy to understand and something that customers resonate with? 

Given that vulnerability is fluid and can change quickly, some consumers may not recognise themselves as vulnerable. Moreover, the PSR has broad eligibility criteria, including having children under 5, we feel that most parents might not consider themselves vulnerable. Additionally, in our recent work with Cadent Gas, we found that some customers felt that although they were vulnerable, this support is a finite resource and they would be taking it away from someone who needs it more. The lack of clarity around what constitutes vulnerability, the difficulty customers have with identifying their own needs, and the scarcity mindset when it comes to support, leads to a significant gap in understanding and support for those most at risk.

Ofgem’s 2025 Vulnerability Strategy 

Ofgem is in the process of refreshing its Vulnerability Strategy, it was first developed in 2019 with commitments to be achieved by 2025. Since then, a global pandemic, cost of living crisis, and the gas crisis has placed significant, unprecedented strain on British households. So it needs reshaping to align with how vulnerable customers now live their lives and interact with the energy sector. Their new strategy is more targeted, with four key pillars to improve services to vulnerable customers.

Improving vulnerability identification and smart use of data.

Vulnerable customers should have their needs identified, be easily able to notify and update companies of their circumstances and have a better understanding of access to and eligibility for support services that suit their requirements.

At LAB, we are calling for a review of the Priority Services Register, as we feel that vulnerable customers are being let down by a lengthy digital user experience, several versions of the registration form, and a lack of signposting to the best journey for each type of user.

Supporting those struggling with bills

Vulnerable customers struggling to pay their bills should receive accurate bills that are easy to understand, compassionate and consistent support, and flexibility in payment methods and frequencies.

Driving significant improvements in customer service 

Vulnerable customers should be provided with tailored communications that are easy to understand, are able to engage with their energy company with ease, and do not face exclusion based on their circumstances.

At LAB, we use behavioural science to audit our clients current communications and designs to ensure that communications considers behavioural biases that vulnerable customers may experience whilst interpreting important messages. We also re-design forms and communications to improve form submission rate.

Encouraging positive and inclusive innovation 

Vulnerable customers should have access to inclusively designed innovative solutions, particularly those that can help them participate in the transition to Net Zero.

The strategy also highlights the importance of outlining a clear definition of what vulnerability is and joining forces with businesses that impact overlapping vulnerabilities, like fuel poverty, health and housing issues. 

Our take at LAB

At LAB, we believe whilst there is movement happening, there are clear opportunities for energy companies to address this new vulnerability strategy and fulfill their duty of care, using technology and behavioural science. Our work looks at how we can identify vulnerable customers online, through behavioural signals. We recognise the importance of optimising digital experiences to support vulnerable customers, by reducing the lengths of the PSR forms and improving signposting to support on energy supplier websites. 

As digital interactions become the norm, it’s essential to ensure that no one is left behind. The energy sector has a responsibility to recognise consumer vulnerability and offer products and services that foster inclusion rather than exclusion. Our expertise in data science, behavioural science, technology, and design equips us to help energy providers better meet consumer needs in digital spaces.

For more information on how LAB can help you identify and support vulnerable customers, please reach out to us. 

Stay tuned for the next part of our Vulnerability Series, where we delve deeper into the spectrum of vulnerabilities and the digital dark patterns that follow these.