The result of industry wide price-cutting, to the level where utilities' prices can scarcely go any lower, is that competition is increasingly based on non-price factors. Industry statistics now indicate that customers emphasize on quick resolution as a priority within customer service. Industry regulators increasingly support this customer stance by imposing financial penalties on utilities that do not meet complaint-handling timelines. Industry figures continue to show high levels of switching and with pressure being exerted on utilities allowed to pre-payment customers, this level is likely to increase.

Some of the key customer interaction challenges institutions in this domain face include:

Customer expectations - Changing customer expectations will be highly correlated with shifting demographics, exposure to service innovations in other industries, and concerns over higher energy prices, increasing expectations in regards to digital customer interfaces, greater choice of service offerings, and new tools.

Financial - The utility financial environment will be under increasing pressure as interest rates rise, regulated return rates decline, and fuel prices increase.

Fuel and energy prices - Escalating fuel prices, the termination of rate caps in some regions, and the replacement of aging infrastructure will continue to drive up rates.

Load and economic growth - The rate of increase in load will decline, but high-growth pockets will exist in warmer regions of the country, reflecting demographic shifts.

Demographics - Changing population demographics will impact utility workforce composition and customer base, as well as customer service expectations.

Customer retention - Historically, utility providers operated in monopolistic markets. A combination of technology advancement and regulatory changes has resulted in customers being free to choose service providers. With very low cost of switching suppliers and with the actual product itself tending towards commoditization – differentiated service is the only way to retain customers. And the only way a customer can experience this differentiated service, is during interaction with the service provider.

Correspondence handling - Difficulties in this area typically arise from a lack of flexibility in directing workflow, a lack of visibility of the handling process, and the sheer volume of correspondence received. The majority of correspondence handled by service agents relates to customer complaints. It is particularly important that such correspondence is handled in a timely and informed manner, so that customer grievances are not compounded.

Debt recovery and cash collection - Uncollected revenue as a result of inefficient billing practices has an obvious impact on business. It also inconveniences the customer with service disruption, often for no fault of theirs. With large customer bases scattered over wide service areas, utility providers are seeking to automate billing processes and bring in proactive notification and reminder services to streamline the process and reduce errors.

Aging infrastructure - Aging infrastructure will contribute to increased replacement costs and strain transmission and distribution systems.

Pre-payment metering - There will be an increased need for technology that will allow customers to switch easily between payment systems and suppliers. As customers become aware of the choices available to them, customer service and retention in this sector will also become a priority. Technology can be used to auto-identify prepayment candidates, based on real-time business-defined criteria and to trigger the various business processes required to move candidates into the pre-payment segment.