Customer communications still fail the loyalty test

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By: Wise Marketer Staff |

Posted on November 16, 2007

Many utility providers such as power and gas companies are tending to fall behind when it comes to automating their responses to customer complaints, according to Pitney Bowes. This, the company argues, is having an adverse affect on customer loyalty.

David Jefferies, marketing director for Pitney Bowes, has underlined the importance of closing what he terms "the communication loop". In general, the deregulation of the UK's utility market has placed the consumer in the driving seat, having a wide variety of suppliers and offers to choose from.

Emphasis on reducing churn
In particular, Jefferies points to the recent emergence of independent web sites that encourage consumers to compare utility prices and service options as a key driver of churn, largely because switching providers has - for many people - become as easy as clicking a mouse button.

Arguably, customer loyalty has become a thing of the past, with the onus now being on utility companies to retain existing customers and to nurture relationships with them. While it may have become a rather common mantra that "retaining and growing existing customers is a far more cost effective practice than attracting new business", Pitney Bowes suggests that this is the only strategy for utilities to pursue.

The role of CRM systems
Customer relationship management (CRM) solutions have sprung up again as a result, and many utility companies are now starting to gain real value from their CRM initiatives. Certainly, industry data management and analysis techniques are relatively sophisticated and the more forward-thinking gas, water and electricity suppliers are becoming increasingly adept at communicating effectively with their customer base.

For example, regular bills and statements are now being made to work harder, carrying marketing messages and cross-selling initiatives in a bid to grow customer share.

But while these outbound messaging techniques continue to improve, technological proficiency was found to be less impressive when it comes to handling incoming customer complaints. This has serious implications, not only from a customer retention point of view but also in that industry regulators are now demanding proof of response to complaints from utility providers.

The impact of customer complaints
Complaints continue to rise for many providers. For example, figures from Energywatch revealed that one particular gas provider had set a new complaints record in March 2007 with more than 14,000 unhappy customers. And the Consumer Council for Water recently released figures showing that customer complaints about water companies in England and Wales rose by 10% in 2006, reaching their highest level since 1994.

With more than a little irony, it appears that the cause of many of these complaints has been the introduction of new billing systems, all of which were intended to improve customer service. Often the failure to present bills on time has been compounded by an inability for customers to get through to the company's call centre in a reasonable time.

A technological answer
Given the continuing levels of customer dissatisfaction, Pitney Bowes recommends that utility providers should look toward solutions that automate the monitoring and reporting of complaint responses. Such solutions already exist, and pioneering providers are investing as much time and budget in closing the customer feedback and reporting loop as they are in ensuring excellence in the customer-facing documents they send out. For example, bar codes on complaint responses can be traced and reports can be automatically generated based on the information associated with each bar code.

Although utility providers can't always afford to focus on the outgoing message at the expense of solutions that deal with incoming response handling and reporting, the company warns that only through sophisticated "closed loop" messaging strategies can they be sure that every effort is being made to enhance the customer's service experience.

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