Posted: 30th September 2020

The latest consumer perceptions data from Ofgem provides an early warning for customer service teams dealing with complaints. Although this comes at a time when energy firms are operating with tighter margins, with the right resourcing strategy in place, it can create an opportunity for energy firms, to reduce cost to serve whilst improving customer satisfaction.

Ofgem’s Consumer Perceptions of the Energy Market (April 2020) survey provides one of the first views into customer sentiment since the start of the COVID-19 pandemic. Encouragingly for energy firms, the survey reveals high levels of customer satisfaction with suppliers and customer service teams – a reassuring sign that the first few weeks of lockdown were managed well.

However, the data also raises a potential concern around complaints. The survey findings show a significant trend of declining customer satisfaction with the outcome of complaints, from 71% in Q4 2018 to 58% in Q2 2020. As 37% of customer complaints remained live for over a month, satisfaction with the time taken to resolve complaints also declined, from 25% in Q4 2019 to 20% in Q2 2020.


It is also worth noting that the increase in general satisfaction levels in April 2020 may be an anomaly. People’s perceptions and priorities changed dramatically in the first month of lockdown. While energy companies struggled to cope with the impact of the COVID-19 pandemic on their businesses, customers were more likely to be understanding of delays in customer service and therefore, more willing to wait before raising complaints.

Now, however, complaints volumes are increasing in line with pre-lockdown levels. This is driven in part by increased customer communications around billing and collections, as well as the possibility of a hidden backlog. Customers expect businesses to now have solutions in place and may feel as though enough time has passed, for complaints to be addressed appropriately and in a timely manner.

There is a commercial opportunity here for firms willing to heed this warning. At a time of increased financial and emotional pressure, a well-managed complaints process is an effective way to maintain and attract the loyalty of customers. Huntswood’s Complaints Outlook 2019 research revealed that only 41% of customers who had an issue with a utilities provider stayed with them, yet 81% reported they would be more likely to stay if their complaint was handled effectively.

Of course, the first step to retaining customers is to avoid the need for a complaint in the first place. We saw in our Complaints Outlook that 19% of complaints derive from poor service, while 33% were down to unfair charges or charges that were higher than expected. Cutting out the source of these customer issues is key to delivering a reduced cost to serve.

This is particularly the case for collections and arrears, which have seen increased activity since Ofgem allowed for the resumption of debt collection in July this year. In return, there have been more and more complaints associated to this activity. As the changing economic situation forces more people into financial hardship, firms are also aware that the numbers of ‘can’t pay’ and ‘won’t pay’ customers are increasing. With this in mind, it is vital that collections are adequately resourced by experienced call handlers who can respond to all customers with empathy to achieve resolutions and reduce the chances of escalation.

Once an issue does become a complaint, the Complaints Outlook 2019 revealed that resolution times are a key factor in customer satisfaction. 78% of utilities customers expect their complaint to be resolved immediately, yet only 12% of customers claimed that they received a first point of contact resolution. When this isn’t achieved, 90% of customers expect their complaint to be dealt with in less than two weeks; a month is far too long.

Measuring customer satisfaction and resolution times alone is not a sufficient indicator of excellent complaint handling. Getting the right customer outcome is essential, both to retain customers and satisfy the regulator. Of course, this starts with experienced call handlers and adequate resource.

In summary, there are a number of ways firms can reduce cost-to-serve when considering complaints:

  1. Conducting root cause analysis - this provides adequate information and opportunity for improvement, to reduce complaints being made in the first place. Complaints, however, must be accepted as part of running any customer-facing business. By accepting and dealing with complaints efficiently at the first opportunity is key and, arguably, something that Ofgem’s data suggests is not happening as well as it could be.
  2. Having the right, appropriately trained resource – this is vital, especially when complaints escalate and increase in complexity. Seasoned professionals will be better positioned to manage grievances in a timely and empathetic manner, increasing customer experience, outcomes and, ultimately, profitability for your business.

Speak to the team to find out how we can drive better outcomes for your business and your customers through the provision of specialist resource in a managed and non-managed capacity throughout the customer journey; from complaints to billing and collections.

Alex prentice

Alex Prentice

Account Director