A tale of two energy companies – how can customer experiences be so different?
When you look at any of the UK energy companies in league tables and rankings such as Which? or KPMG Nunwood, you will find ovo energy and the other small energy players dominating and you will see the biggest and oldest ‘Big Six’ (British Gas, EDF, E.ON, npower, Scottish Power and SSE) languishing at the bottom, if at all. A massive 87% of UK customers are with one of these Big Six energy suppliers.
According to USwitch, UK customers are over-paying for their energy by £3.6bn collectively or £191 per household per annum! This is because customers are automatically moved onto more expensive tariffs when their fixed deals expire. The energy companies appear to be doing little to proactively shift this value from themselves to the customer.
Customers quite rightly have high and ever increasing expectations of service. A customer of Amazon or of first direct is likely to also be a customer of theirs but it doesn’t appear that they have made this connection.
The table below shows a comparison of ovo and npower from TrustPilot (customers) and from glassdoor (current employees). The figures reveal a contrasting picture.
What do we know about the two?
Looking at ovo first. It has c. 690,000 customers and was set up by a group of friends (or customers) who felt that everyone should have an energy supplier that they like and by whom they feel loved. So, their proposition starting point was as a customer for the customer (albeit led by a bright, astute finance professional).
ovo states that it is
It appears to have worked hard to redefine the customer’s relationship with utility companies. It has done this by treating their customers fairly, being easy to understand, being competitively priced, demonstrating transparency, proactively communicating and engaging with customers and critically, delivering high levels of customer service.
It’s worth noting that the team of friends who started the business only had 3 years of energy experience combined. They weren’t shackled with history, legacy, constraints or blinkered thinking. They began with a clean slate.
ovo aren’t completely problem free. Hearing what its customers have to say, it appears to have issues when their customers have moved to a property and have inherited ovo as a supplier rather than have actively chosen to ‘join’ them.
Now let’s look at npower. It has been reported consistently in the news over several years with losses, job cuts, fines and customer service failings.
It has the challenge of ‘turning a big ship’. In my talks with people who have direct experience of npower, it has been trying to move this wieldy organisation to be more customer focused but efforts are slow when there are so many layers of complexity.
Employees on glassdoor talk about “a pessimistic environment and poor management”, “no strategic plan”, “erratic vision” and “high staff turnover”.
The current CEO (formerly the COO) was appointed in 2015. There is a 2-year recovery plan (along with a ‘Treating Customers Fairly’ report). This plan appears to be focused on fixing some of the well-publicised issues such as chaotic billing systems, failure to resolve customer complaints, process failures in customer service and fragmented departments and systems. It appears to be rightly focusing on the basics, first.
But it appears to be taking time. Caution:
“The longer you wait, the harder it is to produce outstanding customer service.” ~ William H. Davidow
In contrast to ovo, it’s worth noting that until recently the leaders of npower primarily had energy experience.
Towards customer centric change
Without having personal experience of working with npower, I wonder which of the following customer experience or customer success factors are in place and what priority they have within the business:
A CEO committed to the customer and customer value
A fully engaged and collaborative C-Suite
One CX vision & strategy that can deliver value for both customer and business, and which considers npower’s own capabilities and limitations
A deep understanding and focus on the joined-up end to end journey across the customer lifecycle and touch points
A commitment to put the customer at the centre of the organisation with a roadmap for customer experience improvement
An action plan that focuses on fixing the basics and the customer journey that is broken, before delight and innovation can be considered
CX principles and customer promises that guide leadership, management and frontline decision making and execution within the business
One unified framework that underpins all CX initiatives and accountability to prioritise, steer resources and measure the right projects
A focus on engagement of the wider organisation, stakeholders and employees
As Simon Virley, Head of Power and Utilities, KPMG UK pointed out:
So, what of the future for these two companies (and their customers)
What sets these two companies apart in my mind? My sense is that one of them is agile and innovative with commitment to the customer at the very top. It runs business through the lens of the customer and places the customer firmly at the heart of their organisation. Yes, there are all sorts of reasons why that is easier for a start up with no legacy or history and even a different basis for regulation – but it is the case nonetheless.
In my opinion, the other has been asset focused - generating business value by treating their ‘captive’ customers as a number or a transaction to whom they ‘supply’. Customers who don’t need the care, consideration or attention that should be afforded to a relationship. It appears to have been slow to recognise the need to be customer focused, to have greater agility to make customer oriented change and that ownership for this must be owned at the top and then ruthlessly executed throughout the organisation.
npower states on its website: Our aim is to be Number One for customer experience in our industry. They are a long way off in June 2017. I truly wonder if their recovery plan as it is, will get them there, and quickly enough.
Out of natural curiosity and passion for improving experiences for customers, I’d love to use our Customer Alignment Model™ to assess or audit where npower is right now to see:
where things are improving and where not, and why
what it can do that is achievable within its own structure, capability and culture
what it needs to do to ensure that the customer is at the heart of the entire organisation, from top to bottom
how it can ensure that change takes place at the pace that is required and that is sustainable
As for ovo, keep doing what you are doing – innovating and disrupting in the energy market. Keep the fresh approach with customers and employees firmly at the heart of what you do - whilst seeking to better understand the customers who inherit you.
If we were to compare the energy sector to that of aviation, Richard Branson summed it up very well:
“Look, I think that when we started Virgin Atlantic 30 years ago, we had one 747 competing with the airlines that had an average of 300 planes each. Every single one of those have gone bankrupt because they didn’t have customer service. They had might, but they didn’t have customer service, so customer service is everything in the end.”