Public enemy – how can UK energy companies improve customer service?
The Big Six energy companies have come under fire for poor customer service after they ranked bottom in this year’s Which? energy satisfaction survey. A roundtable discussion by industry insiders organised by BT at the launch of its report on customer service and utilities sheds light on how companies can improve customer service at a low cost.
The big energy providers in the UK have overtaken banks as the corporate Public Enemy No 1. Do a quick Twitter search of one of the 'Big Six' energy suppliers' names - British Gas, E.ON UK, npower, EDF Energy, Scottish Power and SSE - and it will become abundantly clear just how much these companies, which have a 97% share of the domestic energy market, are disliked and mistrusted by their customers.
At the time of writing, a search of 'British Gas' in Twitter presented this frustrated tweet by user @DominicFarrell: 'British Gas is worst company I've ever dealt with. Completely incompetent at every level. Embarrassing they have 'British' in company name! [sic]'
As this tweet demonstrates it isn't just the much debated price increases announced by the Big Six last winter that have riled customers, but also notoriously lacklustre customer service compounding customers' feelings that they are not getting value for money. And due to the increased use of social media platforms, news of bad experiences travels fast.
The statistics don't lie
In a 2014 energy satisfaction survey conducted by consumer champion Which? the Big Six suppliers all ranked bottom of the table - the worst being npower - with the average satisfaction rating for the energy industry being a meagre 41%, a drop from 49% last year. This is despite some of the smaller energy suppliers being awarded average scores as high as 82% (Good Energy and Ecotricity). Energy companies received a lower customer service average percentage than the financial services industry.
"We have been talking to energy companies about their self-proclaimed need to build trust for the last two years. There is talk...but there is not enough action - it really shouldn't be that hard," Which? programme director Ashleye Gunn told utility industry professionals at the launch of a new BT report on utility customer service in January.
Isn't it time energy companies took their customers more seriously and started to actively engage with them? .
So why do the Big Six consistently get it wrong and what can they do to better service the needs of their customers while keeping costs down?
Going back to the basics
From 1st of January to 31st December 2013 the Bix Six companies received 5,579,665 complaints. Npower received 1,383,650 complaints, the highest amount. On its website npower lists the top five reasons for these complaints as billing (66%), payment (13%), metering (10%), energy transferring (4%) and debt (2%).
It is thought that smart metering technology, which is to be rolled out in all homes by 2020, could help reduce the biggest cause of complaints - billing.
"If you think that most complaints originate with some kind of issue with the customers' bill...smart meters will do away with that because every bill the customer receives will be accurate," says Lawrence Slade, COO of Energy UK, the trade association for the energy industry.
However, Volker Beckers, ex-senior advisor of RWE npower, who chaired the roundtable discussion, told industry members that before smart meters could solve energy utilities' billing issues, consumers' trust would need to be won back.
"Would you let somebody in your home to install a device if you don't trust them?" he said.
"First of all it is getting the basics right. I think all of the big energy companies have invested three-digit million pounds in their billing systems and they are all struggling almost without any exception."
The BT report, entitled 'What matters most: the expectations of a new generation of water and energy consumers', shows the telephone remains the principle way customers contact energy suppliers with 49% doing so this way.
Yet a test by Which? during which it called 16 energy companies twelve times and timed how long it took for a call to be answered showed that for five of the Big Six companies call times ranged from 6 minutes (E.ON) to 19 minutes 14 seconds (npower), which can hardly be considered good customer service.
Ben Oxford general manager and vice chairman of the Australian Customer Service Council, says getting the basics right is pivotal. Oxford is credited with overhauling the customer service record of Western Power in Perth, Australia, ensuring 85.7% of calls were answered within 30 seconds.
"The research is consistent across the globe - people want to you to answer the telephone," he said.
Oxford explained that he turned customer service around at Western Energy, including dealing with three natural disasters that affected power supplies, by 'deploying a multi-channel response in customer service.' He also noted that he wasn't granted any extra budget for the task.
Technology as an enabler
In 2002 Oxford teamed with BT to deploy different technologies to work together to better manage the power company's customer demands. First he deployed BT's contact management system for Western Power, which allowed the company to manage real-time customer service and monitor peaks and troughs as well as trends to see where the company was going wrong.
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Next he started using the BT cloud service after 2060,000 calls melted the company's own servers. This enabled the customer service team to answer hundreds of thousands of calls at any one time, according to Oxford.
Using a remote management facility that enabled staff to log in anywhere Oxford ensured every single additional operator got on the phone and did an hour a month of skills maintenance which filled up the roster and ensured staff were ready in the event of a natural disaster. In such an event, Oxford said 90% of the 'avalanche' calls generated were then dealt with by postcode recognition telling customers information about power restoration in their area.
Oxford shows one way technology can be used to improve the basics. Although this approach may not be for every utility it highlights the idea of 'working smarter not harder' to provide better customer service on a basic level, as well as offering different mediums - apps and internet - for customers to access account information.
However, it's also imperative that customers' information can be easily picked up from these different mediums. The BT report highlighted just 17 % of customers thought swapping between channels was easy and gave them a seamless experience.
New technologies such as smart meters and in-home display devices (IHDD), if correctly deployed, will no doubt improve billing issues and may even help reduce bills by helping customers manage their energy consumption better but they won't be deployed fully for another few years. Change needs to happen now.
Is competition the key?
Is competition the key to better customer service from the Big Six? Other industries that rank highly in customer service, such as retail, are also some of the most competitive.
A representative from Ovo Energy said: "We think more competition is key to improving the energy industry as a whole. We feel that tougher regulation from Ofgem to tackle the disparity between standard and loss leading tariffs as well as greater competition in the market are what's needed to...guarantee customers a better deal. Like price, more competition in the market place will force energy companies to provide better service to hold on to their customers."
Slade agrees: "Undoubtedly competition is good for improving customer services and upping the ante across the entire sector," he says.
Speaking at the BT event Jo Causon, CEO of the Institute for Customer Services, said this is also related to a shift in the economy where customers want to engage more with companies. "Over 78% of GDP in the UK is service related. We are moving to a relationship economy," Couson told utility professionals. "As a customer I want to actually have a say in how you are developing products and services and that is a fundamental shift. The balance power has shifted. The balance power is now with the customer."
In his conclusion to the roundtable discussion Beckers rested on technology as being key, saying: "The conundrum of better service with lower cost is actually resolvable. I think the key to getting there is technology enabled services"
There's no doubt technology in the future will be paramount and in the BT survey 24% of consumers said they would even be happy to pay for remote services, with 86% of younger respondents saying they would trust energy companies to manage these services for them.
But it is equally important the Big Six energy companies get the basics right first - winning back trust lost from older customers and retaining the trust of younger customers.
Perhaps Oxford aptly summed up the energy utility debate in his closing remarks when he said: "Let's stop talking NASA, let's get back to basics."