Energy suppliers pay for price hikes as customer satisfaction drops

The big six energy suppliers have seen an 8% drop in customer satisfaction levels since last year, according to the latest independent Customer Satisfaction Report from uSwitch.com. As a result, 41% of customers are not satisfied with suppliers today, compared with a third - 33% - in October 2007.

A year ago, suppliers seemed to be winning people over, with customers reporting improvements in a number of areas, including billing and customer service. But two rounds of price hikes this year have sent household energy bills soaring by 42% or £381 on average and sent customer satisfaction falling to levels last seen in March 2006.

As a result, only 41% of energy customers would now recommend their supplier to a friend and only 45% say that their supplier offers value for money. Worryingly for suppliers, there has also been a drop in the number of customers who believe that their supplier is offering them their best deal. Only 41% now think this is the case, compared with 45% a year ago.

The report, based on responses by almost 5,500 energy customers in the UK, reveals that npower has been hit particularly hard. It was the first supplier to increase prices this year and has seen a 17% decline in overall customer satisfaction, with particularly noticeable falls in areas such as value for money (-20%), customer service (-8%), billing services (-10%) and meter services (-10%). The supplier has experienced teething problems since moving its billing services onto a new IT platform, which will have impacted its scores too.

Ann Robinson, Consumer Policy Director at uSwitch.com, says: "Price rises were never going to be a vote winner, but this year's increases have hit people exceptionally hard and inevitably it has damaged their perception of the industry. Sadly this has undone a lot of the hard work suppliers have put in to improving service, setting them back to where they were a couple of years ago.

"Suppliers are taking customer concerns seriously and are taking action, but this isn't a one way street - consumers have a role to play too. If you are not happy that you are on the best deal or getting value for money - speak to your supplier. If you are concerned about estimated bills then make sure you give your supplier an up-to-date meter reading.

"If after doing this you are still unhappy with the service you are getting, then it's time to look around for a new supplier. There's some good news here. Not only could you save up to £325, but switching is also the one thing that suppliers consistently do well. Almost three quarters of customers (73%) are satisfied with this part of their service."

Julie Jaglowski, Head of npower Residential Customer Services, says: "We are very disappointed with the survey results. Our aim is to see our customers happy, not just satisfied - and we are working hard to make customer service the focus of our company. Currently, we have a major programme of investment in new systems and improvements to our infrastructure: we are expanding our call centres, which are all UK-based, and have recruited an additional 300 people across the whole of our customer services operations this year. We are also investing around £200m in our systems, which will dramatically help improve the service customers receive.

"We're confident these changes will result in much improved customer satisfaction but unfortunately, with a programme of this scale, it can be difficult to avoid any periods of disruption and we apologise to customers who feel less than satisfied."

Best supplier

Scottish and Southern Energy has become the customer service benchmark for the rest of the industry. It has now been voted best supplier for the fifth consecutive time. It has taken top slot in 7 out of 11 categories, including: recommend a friend, value for money, best deal, customer service and billing. However, along with other suppliers, it has not been immune from consumer discontent over price rises and has seen a 6% decline in satisfaction levels. Weakest areas are meter and online services.

Tony Keeling, Director of Customer Services at Scottish and Southern Energy, says: "We are extremely proud to be topping the uSwitch.com league of UK energy suppliers for the fifth time. This award recognises our commitment to best in sector customer service, and has been achieved through the dedication of our highly trained team who take the time to listen to customers and genuinely care about what they do.

"We work hard to ensure that when a customer contacts us we make understanding energy as simple as possible, aiming to exceed their expectations through quality service, fair pricing and environmental responsibility. However, we are not complacent about our position. We are determined to continue developing new ways to improve our service even further in the future."

Biggest improver

EDF Energy has shot up from 4th to 2nd place this year. Some of its biggest improvements are in billing and meter services, key for delivering good customer service, and consumers now rate it as having the best attitude towards the environment out of all six suppliers. Much of this will be down to the efforts it has made to communicate to consumers about environmental and green issues by making this the focus of its advertising.

Michael Dyke, MD for Customer Services at EDF Energy, says: "EDF Energy is committed to delivering the highest levels of service to our customers. I am delighted that all the hard work and endeavour from all of our staff over the last year has led to a series of favourable improvements in the uSwitch.com Customer Satisfaction survey. The report shows that we have made the biggest improvement in our overall position, which primarily reflects the dedication of our staff wanting to serve our customers.

"The areas where we have seen our biggest improvements in our scores are energy efficiency, meter services and reward schemes. EDF Energy strongly believes that helping people use energy more efficiently is the most effective way to provide long-term support and we have demonstrated this consistently though our actions. We are committed to working with and helping our customers to ‘save today, save tomorrow' as this helps them to both reduce their bills and their impact upon the environment.

"However, it doesn't stop there. EDF Energy is presently investing heavily in a brand new customer information system which will be up and running in 2011 and will transform the present customer experience by offering a more personalised service to our customers, even greater flexibility and choice as to how they manage their energy account(s) and expert energy efficiency advice. Between now and 2011, we know we must work even harder to meet our customer's changing expectations and this will prove to be a very testing time for all of us. Nevertheless, we are firmly on course to becoming 'the customer's choice' by 2012."

Improver

British Gas has lifted itself out of the worst provider slot after making it a priority to improve customer service. It has focused on three main areas to achieve this: a £60 million investment in 800 new front line customer service agents, better training for existing agents and refinement of its billing system. Its best performing areas are for metering and its attitude to the environment. It was rated bottom of the big six for customer reward schemes.

Small decline

E.ON - previously a strong contender for best supplier - has slipped from 2nd to 4th place this year. Much of this can be attributed to drops in satisfaction over its billing and meter services - both key aspects of a supplier's service for consumers. However, customers rated it highly for offering them the best deal, for its online services and its reward scheme, which rewards customers with Tesco Clubcard points.

Graham Bartlett, Managing Director of E.ON's Retail business, says: "Anything that helps to give insight into what customers think about E.ON and the products and services we offer is valuable. We are pleased to have improved our position with regard to customer service, both online and off, and offering the best deal to customers, and this is the first time since the launch of this survey that our overall ranking has deteriorated.

"We are continually developing initiatives to improve the experience of our customers and the value for money we offer. We are confident we will see an improvement in next year's survey results."

Remaining steady

ScottishPower has kept its position as the 3rd best supplier. Along with other suppliers, it has seen a small decline - 6% - in overall customer satisfaction. Consumers rate it highly for online services, value for money and as a supplier they would recommend to friends. Weakest areas are its reward schemes and attitude to the environment.