Poor Customer Service Fuels Energy Firm Competition


An effective and vibrant competitive energy market is one where firms strive to outperform each other on price, quality and innovation to attract and retain customers. So what do energy customers care about the most? You might think it’s cheap energy all the way, but an excellent customer experience is also a huge factor when energy is a commodity in a market of virtually interchangeable offerings. When your product is a commodity, customers will gravitate towards whatever differentiates you from the crowd — and more often than not, that means customer service.

Just before the 2015 UK General Election, Ed Miliband, leader of the Labour Party, promised that, should he win, he would freeze gas and electricity bills in every home and business for 20 months. The move would, it was estimated, save an average household £120 a year and businesses £1,800.

Of course, the other side of that coin is that it would have cost the energy companies around £4.5 billion and naturally enough, they complained, saying that the policy could lead to power shortages, and jeopardise their investment in things like customer service and jobs.

None of this happened in the end, but it got me thinking about how consumers, while valuing cheaper energy bills, also want excellent customer service and how energy companies have been investing in improved customer care over recent years to meet customer expectations.

Not All About The Money

Back in 2013, energy efficiency software company Opower conducted extensive research across 12 countries into what energy customers wanted. They found that while customers’ top priority is lower bills, there are also several non-cost factors that strongly influence customers’ perception of cost: these include the quality of personalised information provided, the utility company’s method of communication – what channels they use – and the customer’s perceived relationship with the utility.

To sum up, this means that customers want the information they receive to be highly personalised – both in terms of its content (eg household-specific energy usage analysis), but also in terms of the customer’s preferred delivery channel (eg telephone, SMS, email, letter, etc). And customer expectations around personalisation are likely to become even more pressing with the increase in the number of smart energy meters being installed, as these continuously record household energy usage and so offer far more opportunities for personalised and data-driven usage analysis.

Channeling The Love

While the telephone remains the main way (49%) in which customers contact their utility companies, companies still need to have an omnichannel approach to customer service to cover all their communication bases. It’s not all just about the money though, because the research highlights the idea of ‘working smarter not harder’ to provide better customer service, as well as offering different mediums – for example, apps and the Internet – for customers to access their account information. The main point of all this is that customer should be able to access their account information easily and seamlessly across every medium – if that is how they choose to access it.

Pet Hates

One of the top irritations for customers is ringing up a company for maybe the third or fourth time and the company not knowing who they are or what their query was about, despite their previous contact. That, along with customer service agents being unable to give them the information they need, when they need it and the endless time wasting that such calls often seem to attract – being left listening to Huey Lewis and ‘The Power of Love’ playing endlessly, interspersed with ‘Your call is important to us’ or ‘We are currently experiencing high volumes of calls’ on an endless loop. If these routine pet hates can be reduced or even completely eliminated, then customer service will have improved by leaps and bounds.

A measure of how seriously the utility companies are taking customer service is that earlier this year, industry analysts IDC reported that over the next 12 months, one in every two Western European energy retailers will invest in a new customer care solution. They also revealed that one in every four utility customer operations teams expects to invest in enhancing and/or upgrading their existing billing solution. And 27.4% of survey respondents for utilities’ customer operations indicated that they plan to invest in CRM solutions in the public cloud.

Customer care is no longer just an add-on for utility companies – it really matters. The ‘Big Six’ energy suppliers’ – British Gas, E.ON UK, npower, EDF Energy, Scottish Power and SSE – share 97% of the domestic energy market and competition is fierce, so we can all look forward to a better customer experience in the future.

Nicholas Mitchell is the Managing Director, EMEA, at intuitive customer experience company [24]7. Nick has a background of delivering IT supported, business transformation programs, along with providing differentiated customer service solutions. With [24]7 he works with some of Europe’s most prominent brands to deliver a more intuitive and omnichannel customer experience.