An Irish Times article reported last week that increased competition in 2009 meant that Ireland topped the league for utility switching in 2009, higher than anywhere else in Europe. It was the first time that a country other than Britain topped the league for utility switching. Ireland had traditionally been a laggard in the rankings, but one of the main drivers was the entrance of Bord Gáis and Airtricity into the household electricity market.
Between February 2009 and February 2010, Bord Gáis Energy managed to take 21% of all electricity customers, a staggering total, and a record level for a campaign for its type.
In September of last year the National Consumer Agency showed that switching was prevalent across many sectors in the Irish economy. The report dealt a wide range of sectors including Utilities, Mobile, Main Grocery shop, Banks and even Gym memberships. Price was the most influential factor for switching, with 78% of consumers citing this as their number one reason for changing product or service provider.
Interestingly only 61% of consumers who switched said they had received better service after switching, while 26% say the level of service is in or around the same.
In the UK a poll for OFGEM showed that despite investment in complaint handling systems and processes, fewer than one in four customers were satisfied with the way complaints were handled. Issues included suppliers failing to return calls, the attitude of staff, the number of times they had to make calls or complaint, and companies claiming a problem had been resolved when it had not.
In the poll, some 15% of those who had made a complaint said they were going to change supplier. In the Irish market last year, 13% of consumers who switched, did so because of poor customer service.
Interestingly, in the UK, 14% had switched supplier via the internet, with 6% having done so on more than one occasion. While the Internet undoubtedly is important, people are more are inclined to do it via the doorstep call, even though people are generally hostile towards direct sellers, 18% have switched as a result of a doorstep visitor. Those in areas with less internet access, and those not paying by direct debit were also less inclined to switch.
With markets likely to be fully deregulated in Ireland this year, we can expect a lot more activity. I for one, switched providers on several occasions in order to get a better deal, I switched both my refuse collection and electricity. Once this flurry of price competition settles down, sustainable competitive advantage will be achieved by those who have the right processes in place to manage customer experience.
As we have seen from the OFGEM report from the UK, a cautionary tale. In spite of large investment in complaint handling systems and processes, customers are still not satisfied with how their complaints are handled. Merely investing in a new system is not the solution. To gain heightened customer experience, every touch point needs to be carefully engineered and scrutinized to continually heighten the level of engagement with the customer, this requires a journey. It should be integral to the strategy of any business that is worried about customer churn in 2011.
As we have seen, most people have made the switch to get a better deal, but from a business viewpoint, this is not a long term strategy. As the NCA publish stats over the next few years, watch how the experience these customers have will play an increasingly important role in decisions they make. It represents a terrific opportunity for those businesses who work to delight their customers.
Customer Experience Management is now a key battleground in business. If something is not measured it’s not managed. Feedback is the key metric to measure CEM. It is envisaged that this blog will be a portal through which CEM and feedback issues can be shared, the objective of this blog is to try get more evolved thoughts and get insights from others, let’s see what happens….
