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NEWS FLASH! Unhappy customers NOT good for business!!!

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I think I’m pretty difficult to shock when it comes to the darker sides of brand loyalty and customer experience – been there, seen it all – but this week I came across something that sent me running to the TMP chill-out room for the rest of the day. Thankfully we were well-stocked with ambient music and salted caramel pretzels.

In response to a customer complaint about incorrect billing, an npower representative was quoted as saying; “we’re beginning to see real results in improving our customer service.” Their evidence for this statement? Brace yourself… the organisation has reduced the number of customers with late billing issues to around 100,000.

That’s one hundred thousand unhappy customers. We’re talking about the entire population of Colchester – or Oldham if you’re reading from our Northern Powerhouse – being dissatisfied with the company’s services. And they seem proud of the fact. It’s no wonder that this week npower revealed that profits have fallen by 60%.

It just goes from bad to worse…

Npower’s problems started in 2013 when they introduced a new billing system. Since then customers have been receiving late bills or no bills at all – so it’s no wonder they’ve lost more than 300,000 names from their account list over the past year. Despite Ofgem warning npower to fix the issue by August 2014 or not take on new customers, they don’t expect to solve their billing problems until the end of 2016 – that’s over a year more of losing customers at an attrition rate of almost 1,000 per day.

Mind you, it doesn’t look like it’s just their customer service that came out of the dark ages. Npower and their owners RWE are doggedly clinging onto a business model that’s dominated by fossil fuels, with only 6% of annual electricity production coming from renewable energy. Not only does this mean that they’re not benefitting from financial incentives to adopt alternative energy sources, but with a slump in gas and coal prices there’s a limit on how much they can charge for their utilities – especially with rivals such as British Gas responding with a 5% cut in gas prices.

…and it’s an industry wide problem.

Before npower’s competitors start crowing too much, a quick internet search finds just about every energy company accused of overpricing, incorrect billing and poor customer service. During the second quarter of 2015, the Ombudsman Service received over 13,000 complaints about the ten biggest energy companies in the UK – and npower weren’t the biggest offenders. Scottish Power took that crown with a whopping 6209 complaints. That’s over 121 complaints per 100,000 customers. So what’s their excuse?

The energy industry is undergoing a period of massive change – but then who isn’t? Along with rising wholesale prices, infrastructure investment and regulatory pressures, comparison sites and interventions by Ofgem are making switching supplier easier than ever – so you’d have thought that winning and keeping customers would be even more of a priority than ever.

So what trick are they missing? If we take customer complaints as an indicator of what consumers want – and what they value the most – a pretty clear picture emerges of what’s going wrong. I’m afraid it’s not rocket science. Most complaints made to the Ombudsman Service about energy companies in Q2 of 2015 focused on inaccurate invoices, with late billing and disputed charges following close behind. Keep your customers in the loop – with clear and accurate information – and if you’re a service industry then you’re on to a winner. I’d usually go on to discuss the many channels of communication that businesses can choose to connect with consumers, but I feel that in this case the companies concerned should stick to the basics. Don’t want to give them too much information at once…

There is a lesson for us all in this. It’s really quite simple but a fact that many of us forget: Remember where your wages come from – and I’m not talking about the boss. Reorganise your priorities accordingly. It might sound clichéd to say that customers are integral to any business, but there, I’ve said it anyway. Today seems to be a day to make sure we’re all aware of the fundamentals of a good consumer experience.

I just hope the energy industry gets up to speed very soon.

Want to know what your customers really want from you? Let The Monachie Project’s team of consumer research consultants find out and see the world from the perspective of your most important asset.

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