Is the end in sight for British Gas’ customer service nightmare?

The latest independent Customer Satisfaction Report, published by uSwitch.com, reveals that there might be an end in sight to British Gas’ customer service nightmare. Although the energy giant has been voted Britain’s worst provider for the third time running, the good news is that it has seen almost a 20% improvement in customer satisfaction levels. The bad news is that there is still an 11% gulf between the best performing company (SSE) and British Gas. In fact, compared with SSE, British Gas customers are seven times more likely to have a problem.

The report indicates that measures taken to try to turn service around have begun to bite and consumers are starting to feel the difference. The turnaround cannot come too soon for the giant. Recent energywatch figures revealed that British Gas accounts for 80,541 or 63% of all consumer cases received by the watchdog – more than all the other suppliers put together. It was also recently the focus of an exposé on BBC’s consumer affairs programme – Watchdog – criticising it for heavy handed tactics and poor service.

The uSwitch Customer Satisfaction Report, based on responses by over 7,700 energy customers in the UK, suggests that the industry as a whole is gradually winning customers over. A year ago (October 2006), only half (52%) of customers were satisfied and only 36% would recommend their supplier to a friend. Both scores have crept up to 66% and 47% respectively. Just over half of consumers (56%) now say that suppliers are offering value for money (40% a year ago), but less than half (45%) think that the deal they are getting from their supplier is the best for them (36% a year ago).

Even billing - which has caused much contention between the industry and consumers and saw the sector voted worst for inaccuracy out of ten well-known industries in a recent survey - seems to be improving. 64% are satisfied with how they are billed now, compared with 57% a year ago.

However, there is still a long way to go. Over a third (34%) of consumers are not getting a satisfactory service from suppliers and latest energywatch figures reveal 128,553 consumer cases made between March and August 2007 - a 50% increase year on year.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “Poor customer service has plagued the energy industry for years, but consumers have successfully forced the issue with suppliers by making it clear that they won’t pay first rate money for a second rate service. As a result, consumer concerns seem to be getting more air time in suppliers’ boardrooms and service levels are finally heading in the right direction.

“These improvements are very welcome, but they are the first step on a long and rocky road. The industry is still leaving a third of consumers dissatisfied and there is an 11% gulf in satisfaction levels between the worst and best suppliers. If consumers want good service and not lip service they need to keep the pressure on – 9.3 million households have still not taken advantage of competition by switching to a better provider.

“Consumers also need to keep an eye on their supplier’s prices - the difference between online and standard plans keeps growing. On average a standard plan customer will be paying £143 more than an online customer, but in the worst case this stretches to £188. However, only one in eight households are on an online plan. If consumers want to get the best value for money they should take up one of these cheaper plans with a supplier they can trust to provide first class customer service.”

Customer Satisfaction Report highlights:

Scottish and Southern Energy is fast becoming the customer service benchmark for the industry. It has now been voted best supplier by consumers for the fourth consecutive time. Three quarters of its customers (75%) are satisfied with service (up from 61% a year ago), which means that while setting the standard for others, it still has scope to improve and maintain its edge on the rest of the industry.

British Gas led the way with price cuts this year. It cut £208 on average off its standard plan prices, but is still the fourth most expensive standard supplier. Recently it has focused on offering the cheapest online tariff in the market, which is currently £170 cheaper than its standard plan. This may be why consumers now rank it higher for offering the best available deal allowing it to move up from 6th position six months ago to 4th now.

British Gas has suffered with customer service and billing issues for some while, leading to it being voted worst supplier for the third consecutive time. According to new performance figures from energywatch, on average its customers are three times more likely to have problems than those of other suppliers, plus in two years there has been a fourfold increase in the number of British Gas customers contacting energywatch for help. However, it has invested in new customer service systems and MD, Phil Bentley, has made a firm commitment to tackling customer service issues.

This is now bearing fruit and it is only because other suppliers have also improved their service that British Gas has not seen its efforts rewarded with a shift out of bottom position. However, with both EDF Energy and npower firmly within its sights – both ranked less than 1% higher than British Gas – the country’s largest supplier has everything to strive for over the next six months.

Key areas to focus on are billing and customer services – ranked 5th for both – and its transfer processes (the switching of customers) where it ranked last.

Powergen is a real turnaround story. In March 2006 it was ranked bottom with only 49% of its customers satisfied, but ever since it has consistently improved, to now reach 2nd place with 67% of customers satisfied.

The company has achieved this through initiatives such as: moving call centres back to the UK; improving training for advisors and giving them full responsibility for the end to end management of a customer query; increasing salaries of advisors to improve performance and to recruit and retain the best people; launching a dedicated complaints line staffed by the most experienced advisors and launching new, clearer bills for customers.

npower is most in danger of slipping into the worst supplier spot. Although it has increased its customer satisfaction score by a very respectable 17% from a year ago, other suppliers have also upped their game leaving npower towards the back of the pack. Consumers ranked it last for billing, best available deal, online services, meter reading services and customer service. Perhaps not surprisingly, only 42% of customers are prepared to recommend it to a friend – least out of all suppliers.

EDF Energy has seen its satisfaction ranking slip from 2nd six months ago, to 4th today, even though its actual score increased by 5% from six months ago. The company is improving, but not to the same extent as its peers. Some of this may be consumer pay back for its apparent reluctance to reduce prices earlier this year. The company has particularly suffered by being ranked last for value for money and second from last in offering customers the best deal and for customers prepared to recommend it to a friend.

ScottishPower has started to claw its way back up again after receiving a shock from consumers six months ago. At that time, it was the only supplier to see its overall satisfaction levels decline and the only one to go down in ranking – it slipped from 2nd to 4th place. However, it has rallied by increasing satisfaction levels by 9% to take 3rd place.

Consumers ranked it top of the big six for online services and meter reading, 2nd for offering customers the best available deal and on offering value for money. 46% of consumers would recommend it to a friend, putting it into 3rd place in this category.