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Business Value Driver

Customers

Effective and trusted relationships with residential, small and large business, and wholesale customers.

Affordability, fairness and simplicity

AGL operates in a highly competitive retail environment. We are focused on delivering a consistently superior customer experience that meets the changing needs of our customers and generates long-term value.

Strategic context

As one of Australia’s largest energy retailers, we put our customers at the centre of our decision-making. In this period of high energy prices, policy uncertainty and technology transition, we recognise that building and maintaining the trust of our customers is essential.

We are focusing on developing products and services that minimise customers’ energy costs and improve the transparency and clarity of their energy bills. We understand that energy costs can comprise a significant component of individuals’ and businesses’ expenses and proactively assist our customers to be on the most appropriate energy plans to meet their needs (see trade-offs below). In an effort to help relieve cost of living pressures for as many customers as possible, over FY19 AGL delivered lower standing offer electricity prices for residential and small business customers in all markets, led the market with our expanded scheme to reward our loyal standing offer customers with automatic discounts, and expanded the debt relief available to customers on our Staying Connected hardship program through a $50 million debt relief package.

AGL is committed to building customer advocacy. Our participation in the Energy Charter represents a commitment from energy businesses across the supply chain to progress the culture and solutions required to improve outcomes for all customers – residential, small and large businesses alike.

We are also responding to changing energy customer preferences through the digitisation of our business in order to drive productivity and deliver greater flexibility in how we take our products and services to market. We have made significant capital investment over the past three years through our Customer Experience Transformation program, delivering an enhanced digital experience for our customers.

Our focus on technology to enable increased customer engagement is reflected in our refreshed strategy, under which a range of emerging growth opportunities in distributed energy have been identified, including bringing to market residential battery offerings, expanding our view to consider e-mobility more broadly, and utilising smart home and energy efficiency technologies that aim to leverage the convergence of data and energy.

Customer accounts:

2.3 mElectricity

1.4 m Gas

3.7 mTotal

Creating value

Building trusted customer relationships

KPI

FY19

FY18

FY17

FY16

FY15

Our key customer metric is Net Promoter Score (NPS). AGL's NPS has improved significantly over FY19 to the highest level we have obtained since using this measure, with customers reporting more positive perceptions of the AGL brand as being one they can trust, and rating AGL's services and prices more favourably than in previous years. It also reflects positive consumer sentiment towards the energy industry more generally relative to past years, when negative media coverage was more prevalent.

Our Ombudsman complaints have reduced by around 2% in the past year. This is largely due to a reduction in complaints related to connections and credit issues, following improvements to meter installation timeframes and to our processes for communicating with customers about credit and collections issues.

Customer Net Promoter Score (NPS)

-11.1

-22.5

-18.1

-18.2

-25.4

Ombudsman complaints

11,138

11,413

12,277

14,176

18,892

Energy affordability

KPI

FY19

FY18

FY17

FY16

FY15

Staying Connected customer numbers have increased this year through both proactive engagement with and early identification of hardship customers. AGL has increased support mechanisms for potential hardship customers and has noticed a greater awareness of AGL's Staying Connected program.

Both total average debt across AGL's mass market portfolio and AGL's Staying Connected customer debt have decreased, mainly due to AGL's delivery of debt relief and payment matching initiatives, and the introduction of proactive communications to customers who may be in financial hardship.

Number of customers on Staying Connected

Average level of debt of customers on Staying Connected

30,083

$2,301

26,657

$2,502

31,463

$2,171

39,366

$2,255

22,016

$2,109

Total average debt across mass market customer portfolio

$3311

$501

$438

$422

$396

Growth in customer numbers through innovative products and services

KPI

FY19

FY18

FY17

FY16

FY15

AGL continues to face intense competition in the retail market, with consistently high levels of customer churn.

However, our customer account numbers have increased by 1.8% over the year. Consumer electricity accounts have increased as a result of customer growth in New South Wales and Victoria, while increases in consumer gas accounts have largely been driven by customer growth in Western Australia and Victoria.

We also saw a 7% increase in large business customer accounts in FY19 to around 16,000 accounts.

Customer accounts



3.708 m

3.641 m

3.653 m

3.681 m

3.735 m

Customer churn

17.6%

18.9%

16.4%

15.7%

14.9%

Legend

Improving trend and/or satisfactory outcome

Neutral trend

Deteriorating trend

KPI linked to remuneration outcomes for CEO and Key Management Personnel

Key relationships and trade-offs with other Business Value Drivers

There is a direct relationship between the Customers and Systems & Processes Business Value Drivers reflected in AGL’s significant investment in digitising its customer service and analytical capabilities via the Customer Experience Transformation program during FY17-FY19 to deliver stronger customer products and relationships. For example, this investment has enabled AGL to deliver real-time analytical data to customers through Energy Insights, a product that gives customers greater control to manage their energy by providing them with an estimated breakdown of their energy use by appliance category.

AGL is balancing the Customer, Finance and Communities & Relationships Business Value Drivers to help customers select the most appropriate energy plan to suit their needs, even when doing so may reduce revenue. For example, we are making progress transitioning our electricity customers to market offers from standing offers, which at 30 June 2019 accounted for just 3% of all electricity customer accounts. AGL also helps customers in financial hardship gain access to guaranteed discounts, payment plans and other support services via the Staying Connected program.

There is a direct relationship between the Customer and Communities & Relationships Business Value Drivers, as evidenced by the way in which we are collaborating across the energy supply chain for the benefit of customers in progressing the Energy Charter. The Energy Charter is of benefit to our customers and in turn, the collaborative approach we are taking with other participants across the energy supply chain leads to a broad recognition of the need for the energy industry as a whole to adopt a more customer-centric approach.

Beyond FY19

AGL is committed to driving the cultural change that is needed to build the increased trust of our customers. We recognise that customer needs and expectations are increasing and evolving. There has been a convergence of a number of technology disruptors across transportation, power generation and traditional utilities, which applies to both residential and business customers. The convergence of energy and data creates an opportunity for AGL to position itself as a trusted and preferred partner of the connected customer.

More information

Historical data on various customer indicators from FY15-FY19 (including energy volumes sold, and consumer and business markets by state and fuel type) is available at 2019datacentre.agl.com.au.

The Energy Charter, to which AGL is a signatory, is available at theenergycharter.com.au.

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