Utility Week

UTILITY Week 18th December

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

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Page 19 of 31

Customers This week Water firms can learn from energy retail Ofwat chief executive says energy market 'got out of line with customer expectations' The water sector must learn lessons from the retail energy market if it is asked to open the household market to competi- tion, Ofwat chief executive Cathryn Ross has warned. She told Utility Week it is important for the regulator to "keep an eye" on how markets are working. "I think if you keep an eye on that in a much more dynamic, real-time way, it gives you the ability to inter- vene – not necessarily using your hard powers, maybe using some of your soer powers – to make sure that the market continues to deliver for customers and therefore maintains its legitimacy," she said. "I think the energy market got too out of line with the expectations of customers and society before this was realised. That could be the biggest lesson for water." The Treasury outlined its plans to boost competition in a number of sectors including water on 30 Novem- ber. The announcement came as a surprise to the water industry, which has been focused on opening the market to competition for non-domestic customers in 2017. Ofwat will review the costs and benefits of opening up the household retail market and report to the govern- ment next summer. The government will then "work with water companies to begin the transition to retail competition before the end of this Parliament". However, Ross insisted there was "absolutely no way" that the regulator would let work on domestic competition derail the non-household timetable. LV Q&A with Ross, p11 ENERGY Co-op complaints break CAB records Co-operative Energy ranks the lowest of 19 of the UK's largest energy suppliers for handling customer complaints according to new data from Citizens Advice. The figures show that Co- operative Energy had the highest customer complaint ratio ever recorded by Citizens Advice, receiving 1,584 complaints per 100,000 customers for July to September 2015 – more than double the previous quarter's results and 40 times more than the highest ranking supplier. The best performer, SSE, posted just 39 complaints per 100,000 customers, followed closely by EDF Energy with 43. SSE, EDF Energy, Green Star Energy and Scottish Power all reduced complaints since the previous quarter. Earlier this year the Co-opera- tive introduced a new billing and customer service system which has created some problems for the company. ENERGY Heat customers 'have enough protection' The protection afforded to district heating customers is "proportionate" even though the sector is not regulated by Ofgem, according to energy secretary Amber Rudd. In a letter to the Energy and Climate Change Committee, Rudd said the government felt the measures for protecting dis- trict heat customers were propor- tionate to the "current consumer challenges in the sector". She said the lack of regu- lation by Ofgem leaves some customers "at risk" and that the standard consumer protec- tion and competition law that protects them is being supple- mented by voluntary industry- led protection schemes such as the Heat Trust. ENERGY British companies in the dark on DSR British businesses are unaware of the benefits of demand-side response (DSR) at times of high national demand, research from Npower has revealed. Fewer than half the retail- ers eligible for the January 2016 transitional capacity auction told Npower Business Solutions they would be taking part. Most eligible businesses, 75 per cent, said they were not using demand-side response simply because they did not know enough about it. The DSR scheme offers busi- nesses financial incentives to lower or shi their electricity use at peak times, creating a more resilient energy network and letting firms unlock flexibility in their equipment to earn income. Ross: non-household market is priority for now I am the customer Nicola Eaton Sawford "Customers are your most powerful marketing tool" I am the customer and I am delivering you a Christmas gi in the form of a simple message. It is worth its weight in gold, if you can find the right way to use it. Here it is: "Customer experi- ence is the new marketing." In 2016, more than half of customers will draw on the experience of other customers (online) to determine whether they buy from you or not. This makes your new, most powerful marketing tool your past and present customers. to a negative online review can influence customers positively. Some sectors have grasped this. Even distribution business can find the relevance in this Christmas gi, where there is competition in connections at the very least. Merry Christmas. Customer experience is the new marketing, explore what that means for your organisa- tion and get ahead of the curve in 2016. Nicola Eaton Sawford, Cus- tomerwhisperers.com As online reviews wield rapidly growing power and influ- ence, the marketing messages you generate will be viewed increasingly sceptically by customers. Your marketing cam- paigns might attract a customer to consider you, but the views of other customers will heavily influence their decision to buy – or not. Increasingly, customers look to their peers to determine who to consider in the first place, making the marketing campaign even less influential. A negative online review need not be feared. Much like a well-handled complaint can increase customer satisfaction, an excellent, and fast, response 20 | 18TH - 24TH DECEMBER 2015 | UTILITY WEEK

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