Why do energy companies provide a customer (don’t) care service?

The Guardian recently focused attention on falling oil prices and how UK energy customers are not seeing this passed on to their bills. According to their data, the average British energy customer is now overpaying by around £140 per year.

The newspaper argues that if you are a customer on a standard tariff – not including any special price deal – then by switching now you could see your energy bills drop by around £300 per year. That’s a significant saving, but how can this be the case?

The price comparison websites have documented that prices are dropping significantly – about 15-30% in the past six months alone. However, these tumbling prices are generally offered only to new customers, so it pays to switch, but if you are a happy and loyal customer then it is unlikely that any of these discounted rates are coming your way.

Articles such as this really highlight the role that improved customer service has to play in the UK utilities sector. Firstly in the way that better service can encourage customers to stay loyal – many would prefer to pay a little more and to be looked after better than to save a few pounds, but find they have endless problems with the service. Secondly though, by engaging a more proactive customer service team it can be possible to identify customers who are not happy, who are thinking of switching, and to engage with them before they are lost. When a customer calls and asks for their annual energy usage in kilowatt-hours, that’s not for a pub quiz, that’s a customer churn indicator – how many energy companies have retention strategies in place to retain and grow that customer?

It’s a shame that loyal customers are not being rewarded, although this tendency to offer better rates to new customers applies to many other markets, such as insurance, banking and telecoms.  Utilities is seen as a grudge spend by customers as highlighted in an earlier blog post and the perceived hassle of switching is often relied upon by energy companies to retain their customer base. This has wider implications for the customer lifetime value to an energy business through supplementary propositions including boiler care and extended home servicing products.

It is however easy for UK energy customers to switch supplier and with it now being quicker than ever before and with the media highlighting these large discrepancies in prices it is likely that all but the most loyal customers will be exploring how to get their hands on that £300 saving. As the UK weathers storms and high winds, the Energy suppliers will too look forward to warmer times when customers once again turn their attention away from seasonally high utility bills.

The big energy companies really need to look after their customers in such a competitive and changing market. Thinking more about the overall customer experience – including aspects of loyalty and advocacy in an ever-increasingly online world– is a great start. 

Electricity pylons   Photo by Ian Britton licensed under Creative Commons

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This entry was posted in Current Affairs, Customer Service, Utilities and tagged , , , , , , , , . Bookmark the permalink.

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