Utility Week

Utility Week 9th January 2015

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

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Page 23 of 31

24 | 12th - 18th December 2015 2015 | UtILItY WeeK Customers Customer Centricity: from Planning to Delivery Roundtable with Wipro, 4th December 2014 Can you engage with customers who don't want to know? G ood customer service is key to busi- ness success in a competitive market. Chief energy ombudsman Lewis Shand-Smith set the scene at a round- table debate on customer centricity, hosted by Utility Week and Wipro in London late last year. He outlined the size of the challenge for utilities seeking more positive relationships with their customers by high- lighting how difficult it is to truly under- stand their pain points. Only 5 per cent of customers go to Ombudsman Services when they are unhappy with services they have received, he said. Other customers simply leave their supplier. Of course, that theory does not apply to water companies and energy networks, which operate regional monopolies – leaving is not a choice for their customers. Competi- tion does exist in the energy retail sector in most cases but there is a consistently poor level of customer satisfaction across the big six energy companies. All six received a score of less than 50 per cent in the 2014 Which? Switch Energy Customer Satisfaction Survey, thereby keeping the playing field fairly level. Nevertheless, moves towards more cus- tomer-focused regulation in both the energy and water sectors, and the recent referral of the energy market to the Competition and Markets Authority mean customer service should be a key topic in boardrooms. The results of research by Utility Week, in associ- ation with Wipro, published last spring dem- onstrate the rising importance of customer centricity, and promise significant improve- ment in the utility sector's performance over the coming year (see p26). Most utility companies – an optimistic 62 per cent – responded to Utility Week's research with a confident prediction that they would be able to rate their company 5 out of 5 for customer centricity in the next 12 months. Currently only 14 per cent do so. So what does a 5 out of 5 rating require? Discussion at Utility Week and Wipro's roundtable quickly focused on how compa- nies respond to emergencies. All those pre- sent agreed that the main connection their companies have with their customers is in emergencies when the lights go off or the water stops flowing. The delegates felt that their companies' customer systems perform best under these kinds of pressures, while it was much more challenging to achieve the same effectiveness on a business-as-usual basis. Andrew MacMillan, former head of cus- tomer service at John Lewis, flagged engage- ment with customers as one of the four key elements of a good customer service strat- egy, the others being functionality, product or service, and channels of communication. However, it was acknowledged that utili- ties have some unique challenges when try- ing to enhance engagement compared with high street retailers. Namely, they are limited by how much customers actually want to engage with them. Delegates from the water industry identi- fied extensive opportunities to engage, such as when a customer moves house or requests a water meter to be fitted, but they also agreed that as long as there was no problem, water customers wanted little interaction with their provider. Matt Rudling, director of customer service at distributor UK Power Networks, was clear where his company stood. "Nobody knows who we are," he said, and research undertaken by UKPN revealed that customers didn't want to know either. Utilities looking to improve their cus- tomer service levels and refresh the sector's image in the eyes of customers were collec- tively urged not to let regulation limit their ambition. They should seek to go above and beyond what is legally required of them. When the lights go off, for instance, sup- pliers are not obliged to engage the 70 per cent of customers who turn to them for help rather than to the networks, but that does not mean they could not or should not. Pro- active service, where companies go beyond what they have to do, turns customers into brand advocates, it was agreed. Rudling summed it up well when he said: "It doesn't matter if you're right or wrong, it's what the customer's thinking [that matters]." Where to benchmark? Rather than looking to their peers within the industry, utility companies need to compare their level of customer service with companies outside the sector such as retail. After all, this is what consumers do all the time. Discussion at this roundtable gave numerous analogies and pieces of anecdotal evidence to show that industry segments and sector boundaries are not appreciated or acknowledged by consumers. Customers compare their experience of dealing with their distribution network operator with their experience of dealing with brands such as Amazon or Easyjet. In particular, they readily compare the effectiveness of communications functionality. Exploring what seems to make retail brands better at customer service, four strategic elements were discussed: functionality; communication channels; process; and customer engagement. It was also pointed out that customers are clear about what they can expect from companies like Amazon and Easyjet. Utilities need to define their customer service characteristics more confidently. By varying the focus and balance with which they treat the four key elements, they can differentiate themselves, it was agreed. In so doing, they could move the market on from being predominantly price focused.

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