Utility companies shouldn’t throw in the customer service towel. Not yet.

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Published in Utility Week, 14 May 2010

Yet again the big six UK utility companies have been found wanting in terms of their customer service.  In the latest Which? customer survey of 8,000 members the number of customers saying they were satisfied with the service they received ranged from npower’s paltry 27% to a not exactly stellar 50% given to Scottish & Southern Energy.

And yet we all know that customer satisfaction is a significant element in helping companies to retain their customers, which in turn is key to the majority of organisations’ success. 

That got me thinking…  Improving customer retention within utilities has to be one of the hardest tasks in the world.

Firstly, who wants a relationship with their utility supplier?  There’s little reason to contact one, especially as most of us pay by direct debit.  And when we call we’re likely to be upset or stressed because of a fault on their part (wrong bills, high meter estimate, etc); problems paying bills; or as part of the stress of moving house!  As consumers we are looking for a quick and seamless response to our queries, at a time that suits us.  So it can’t be easy for companies to wow customers enough to make them fans; to convince them not to follow the advice of the media to look for the cheapest energy prices.  Instead, these utility companies are having to rely on apathy rather than fandom.  Not a particularly strong foundation upon which a company can hope to build a strategy for improving customer retention. 

Secondly, the industry – especially the big six – are not helping change consumers’ opinions that there’s not much difference between any of them, except for the price.  Why shouldn’t we follow the advice and look for the best tariff?  Especially as it’s so easy to do these days with the now ubiquitous comparison web sites (I just put the phrase “utility provider” into Google, and all but one of the results on the first two pages were for switching or price comparison websites). 

And when we’ve found the cheapest price the regulator has made it very easy to change suppliers.  There’s no pain and little risk these days.  And once we’ve realised how easy it is we are even less likely to show any loyalty to the new provider.  Especially when there appears to be nothing to differentiate them except price,  and two weeks after you pick the cheapest one it loses its position at the bottom of the tariff table!

But utility companies can’t just throw in the towel, not if they want to defend their market share.  Let alone grow.

Our recent research into UK consumer attitudes towards customer service showed that in the UK utility providers were most at risk of losing customers as a direct result of bad service.  OK, we have to accept that consumers don’t need much excuse to start searching for another supplier.  But, equally, that means that service provision plays a part in keeping customers, too.  And if the smaller suppliers are able to keep customers satisfied, why can’t the big six?  If they start focusing on their customers’ needs, fixing broken processes, implementing the right technology and empowering their agents to focus on satisfying customers.  Accepting that the company will lose 30,000 odd customers in a month, but gain an equal number, focusing primarily on acquiring the replacement customers, rather than on keeping current customers, is not a long-term strategy for success.  Especially when there are organisations such as the Consumer Association that are highlighting companies that are doing it right…  as well as those who are doing it cheap! 

Republished with author's permission from original post.

Guy Tweedale
Guy Tweedale, Senior Vice President, European Operations, has more than 18 years of experience in the IT industry. He brings a wealth of knowledge in the enterprise software arena to Jacada, with a strong focus on business process automation and enhancement in key areas such as customer management, field-based activities and financial control.

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