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Failing At The Basics: Customers Are Leaving Utilities Because They Just Don’t Answer The Phone

The UK's deregulated energy market hasn't improved customer satisfaction, with the utilities sector ranking lowest in the Customer Satisfaction Index due to slow response times and bankruptcies. Urgent improvements are needed to retain customers and compete effectively.

The picture shows a lonely phone
Chris Hague
2 April 2024
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The UK deregulated their national energy market around a decade or so before the reset of Europe. British customers have been able to choose their gas and electricity supplier since the 1990s, France didn’t create a retail energy market until 2007. This means that British consumers have had around three decades of choice and competition in energy.

The UK must be seeing the kind of excellent customer service satisfaction levels in energy and utilities that the rest of Europe can only dream of, right? Wrong. Customer satisfaction in the utilities sector in the UK is at rock bottom.

When the Institute of Customer Service published their annual Customer Satisfaction Index in January 2024 the utilities sector was ranked as the lowest performing of all industrial sectors.

The ICS survey showed an average customer satisfaction score of 69.5 out of 100 for the utilities sector - so around a third of all customers are not satisfied.

To be the worst performing of all sectors sounds bad, but consumers are regularly switching supplier so there is lively competition in this sector. Over 200,000 customers a month regularly choose to change their energy company in the UK - last September the figure was 222,000 and this was twice as much as a year earlier. Customers are switching and switching is increasingly popular.

The UK has faced a wave of bankruptcy in the utilities sector. Many small energy companies had a cap on the price they could charge to customers and were operating at a loss because the international market price jumped so quickly in the past couple of years.

This instability could be one explanation for the poor rating by customers - they are tired of watching energy companies charging high prices, then going bust, and then having to manage the difficulty of transferring to a new company.

However, if you look back to how the industry was performing in 2021 then there were also bankruptcies taking place then and organizations such as Citizens Advice calling out record low levels of customers service - this decline has been underway for a long time.

One of the main drivers for customer complaints is the poor response time. Emails are not answered promptly and voice calls sit on hold for at least five minutes before anyone answers the call.

Answering calls and emails quickly should be table stakes in the modern customer service environment. In the past, utilities were often guilty of not taking customer service seriously because customers had no choice - they just had to pay their local water or electricity supplier with no other option. This is no longer true.

As the switching data suggests, customers are very comfortable shopping around. They will switch supplier if they are dissatisfied with the service they are receiving. There used to be enticing offers available for customers that were prepared to switch, but these have all evaporated. Even so, it is poor customer service that is the primary driver for utility customers to look for an alternative supplier - they don’t even need the deals now, they just want a new supplier that answers the phone.

The message is clear. If you are not answering calls immediately, if you are not responding to emails inside a couple of hours, then you are disrespecting your customer - you are wasting their time. They will move to a new supplier.

Poor service is directly costing energy and utility companies income from their existing customer base - and as they leave you can guarantee they will tell their friends.

A flexible team of work-from-home professionals with a strong understanding of the utilities sector could make an enormous difference to all these companies. Apply analytics to predict call and email volumes and then staff the team to these expected levels. It’s simple, but most utility companies are clearly not doing this today.

Let’s drag the utilities into the twenty-first century by delivering the kind of customer service that makes the customer want to recommend your business, rather than searching for an alternative supplier.

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