monthly CSAT report - TTi Global Research · UK Customer Satisfaction Scores by Utility Company Ovo Energy received the highest customer satisfaction score of 9.1, followed by Anglian

21- M on t h Ben chm ark Repor t Decem ber 2018

UTILITIES

UK Cust om er Sat i sf act i on 12- M on t h Ben chm ark Repor t 2018UK Cust om er Sat i sf act i on 12- M on t h Ben chm ark Repor t 2018 1

Welcom e t o our Ut i l i t i es Cust om er Sat i sf act i on Ben chm ark

Repor t

Our benchmarking report provides unique insight into the state of customer satisfaction in UK Utilit ies. As well as outlining energy and water companies? performance compared to other sectors, we share how well named utility companies deliver customer satisfaction, the touchpoints increasing customer effort and factors driving employee engagement.

Utilities Employees? Satisfaction Lower

As the only research agency currently conducting a cross-industry employee engagement survey, our results show utilit ies staff engagement and satisfaction levels compared to other sectors. While utilit ies staff engagement rating is in line with the cross-industry average (8.1), employee satisfaction is slightly below average (7.7 compared to 7.8). Our findings also reveal a higher percentage of employees (31%) crave a higher level of support from their line manager compared to other sectors (28%). [fig.9] High staff engagement is key for building better customer relationships. As such identifying and embedding drivers of staff engagement should be an integral part of companies? plans for honing a great customer experience.

Reducing Customer Effort in Utilities

Many suppliers have taken steps to improve customer satisfaction since tighter regulation. As well as focusing on lower bills and simpler tariffs, companies are smoothing front line processes with automation and self-service options. Our findings show elevated customer satisfaction in areas such as ?ease of contact? and ?installing a meter?. On the flip side, both ?meter problems? and ?changing supplier? continue to elicit low satisfaction and high customer effort scores, suggesting customers are still having to work too hard to reach their desired outcome. [fig.3]

Customer Research for Informed- decision Making

Utility companies face difficult decisions on which customer strategies to invest in for the best returns. Our report shows the valuable role research plays in uncovering customer priorities in a multi-channel environment. By taking a regular, rigorous approach to customer research, companies can isolate customer preferences and align processes accordingly, in turn driving up the quality of customer interactions.

Glyn Luckett

Commercial Director TTi Global Research

Get in touch:

[email protected]

2

Utilities Customer Satisfaction Below UK Average Our findings show that customer satisfaction in utilit ies was below the UK average for 18 out of 21 months to December 2018. Rolling data for March 2018 shows utilit ies received a customer satisfaction score of 7.2, which rose briefly to 7.3, before falling to 6.9 in December 2018. Overall, utilit ies ranked fourth lowest for customer satisfaction (6.9) followed by Mobile Telecoms (6.8), Telecoms (5.6) and Distribution (5.2). [fig.1]

Utilit ies is under intense regulatory pressure to deliver a compelling customer experience. With Ofgem?s RIIO-2 price control framework consultation underway, energy networks are planning how they will meet tougher price and customer engagement objectives. Consumer engagement is a key theme of RIIO-2 making it crucial for energy networks to build a customer experience demonstrating crisply and clearly, how and where they add value. Water companies facing more stringent customer service measures under Ofwat?s 2019 Price Review (PR19) also need to demonstrate how they are putting customers at the heart of business planning.

3

Cust om er Sat i sf act i on i n t he UK by Sect or

Customer satisfaction with utility companies increased slightly in the first half of 2018 (7.3) before dropping to its lowest point in December (6.9).

Our data shows utilit ies received a customer satisfaction score of 7.2 in March 2018, which rose to 7.3 in July before falling to its lowest point,6.9, in December 2018.

Utilit ies ranked joint fourth lowest for customer satisfaction in December 2018 along with the Airline sector. Sectors in the bottom three positions were Mobile Telecoms (6.8), Telecoms (5.6) and Distribution (5.2).

The strongest performing sector was Online Retail with a score of 8.7, followed by traditional Retail and Supermarkets with scores of 8.2.

Our findings highlight how retail environments consistently outperform other sectors on customer satisfaction.

Strategies for retail success include constantly pioneering new ways to buy, agile online shopping, rapid delivery, lots of choice and personalisation in the form of recommendations and loyalty rewards.

However, unlike utilit ies, where cost tends to be the dominant decision-making factor in the customer journey, several factors influence customer decision-making and loyalty in retail, from brand name and reputation, through to quality and convenience.

Transformation is happening in utilit ies, with suppliers starting to offer an alternative customer experience, digitising processes, such as bill payment, and communicating via social channels.

Navigating these systems from a consumer perspective will not only pinpoint customer pain points but uncover more opportunities to enhance the customer journey, such as personalised communication and anticipating customers' next steps, bringing the customer experience closer to retail brands.

Figure 1 - Overall Customer Satisfaction across UK Sectors

UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t 4UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t

Effective customer strategies include:

- Cust om er -focussed m essaging ? Branding emphasises Ovo?s ?customer first? approach alongside company values such as ?honesty? and ?transparency?

- Self -service opt ions ? Offering convenient account management via smartphone app and customer portal

- Inst i l l ing t rust ? Profiling independent customer reviews on website and inviting regular customer feedback

- Rewarding brand loyalt y ? Opportunity to earn interest when account is in credit and incentivised ?recommend a friend? initiative

- Prom ot ing Green Energy ? Providing tariffs with 33% renewable energy as standard and option to upgrade to 100%

- Innovat ing ? Offering home energy plans for electric vehicle owners

Ovo?s customer-centric positioning helps differentiate its brand from competitors and earn them competitive advantage in a crowded market. Competitor benchmarking will help utility suppliers identify and build on points of differentiation, enabling them to show where they add value to consumers.

Ut i l i t y Suppl i ers? Sat i sf act i on Scores by Touchpoin t

The customer touchpoint ? the point of contact between a customer and their utility provider ? prompting the highest customer satisfaction score was ?ease of contact?.

Ease of contact? prompted the highest customer satisfaction rating with a score of 8.6, followed by ?installing a meter? with a score of 8.1 and ?repairs and emergency work? with a score of 7.7.

Touchpoints ranking lowest for customer satisfaction during the 21 months to December 2018, were ?meter problems? (4.9) and ?changing supplier? (6.1).

UK Cust om er Sat i sf act i on Scores by Ut i l i t y Com pan y

Ovo Energy received the highest customer satisfaction score of 9.1, followed by Anglian Water with a score of 8.9.

Scottish Power received the lowest customer satisfaction rating with a score of 4.5, followed by Utilita with a score of 6.3.

Figure 3.0 - Overall Satisfaction Scores across Utility Providers ? Touchpoint

Ovo Energy?s Customer Experience Strategy

Ovo is one of the UK?s largest independent energy suppliers with over one million customers. Since established in 2009, Ovo has won several awards, including being named uSwitch Energy Supplier of the Year for the last four years.

Figure 3.1 - Overall Satisfaction Scores across Utility Providers ? Touchpoint

Figure 2 - Overall Customer Satisfaction by Utility Company

UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t 6 5 UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t

Im provin g Cust om er Exper ien ce w i t h Gap An alysi s

Touchpoints are valuable opportunities for companies to strengthen customer experience. The challenge for multi-channel utilit ies companies is ensuring meaningful customer interactions at each touchpoint across multiple customer journeys.

A customer?s overall impression is shaped by the quality of company response at each encounter. Any slip-ups, such as receiving inaccurate information, call backs or delays, has the potential to frustrate the customer causing them to spark a complaint or leave for good.

Making customers expend effort is detrimental for several reasons, including:

- Eroding Cust om er Sat isfact ion ? Connected customers expect a swift, accurate resolution to their problems, whether querying a bill or arranging smart meter installation. Keeping customers waiting for a company to respond or action a service leads to frustration and dissatisfaction.

- Dam aging Expect at ions ? All businesses communicate their intention to make things easier for customers. If a customer must call back, explain their issue to different personnel or switch channels to get a problem resolved, the brand promise is broken, leading customers to go elsewhere.

- Increasing Churn ? Customers on receiving end of high-effort interactions are more likely to leave or switch to another provider, impacting loyalty and retention.

UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t 8 7 UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t

For example, a customer notifying a supplier of a meter issue might cut

across several touchpoints: contacting a representative by phone, web

chat or email, implementing advice given, requesting an engineer visit,

follow- up contact and providing customer feedback.

Cust om er Ef f or t Scores (CES) by Sect or

Sectors with the highest customer effort scores were Telecoms with 7.1, followed by Distribution and Utilities with 6.5.

Sectors with the lowest customer effort score were Restaurants with 4.7, Online Retail with 5.5 and Airline with 5.7.

High customer effort scores indicate customers are having to work too hard to reach a desired outcome and are red flags for customer dissatisfaction. Telecoms, Distribution and Utilit ies show consistently high effort scores over the time period, suggesting elevated friction at certain touchpoints.

We have over 30 years? experience of transforming utility companies? customer experience. Applying an advanced gap analysis framework, we examine customer perceptions against expectations at each stage of the customer journey. The output prioritises customer requirements, equipping suppliers with the intelligence to make targeted improvements, while also helping them conserve resources on processes that are working effectively.

Figure 4 - Customer Effort Analysis by SectorCustomer effort analysis helps understand the root cause of customers? negative experiences, identifying touchpoints that amplify effort. This information allows companies to re-design human and technology-led processes for simpler, smoother interactions.

Ut i l i t i es Cust om er Ef f or t Scores by Tran sact ion Type

The utility company transaction requiring the most customer effort was ?making contact by phone?, scoring a customer effort rating of 8.0.

The second highest customer effort score was ?issues with meter readings? (7.5) followed by ?staff knowledge.? (7.2)

The transaction with the lowest customer effort score was ?easy to book appointments? (5.7).

Customer effort scores were high for phone contact throughout the survey period, starting with 7.3 in March 2018, rising to 7.6 in July and 8.0 in December 2018.

Cust om er Ef f or t In t eract i on s Ben chm ark ? St af f Kn ow ledge

Results highlight that a lack of staff knowledge raises customer effort, negatively impacting the customer experience.

Our results show that customers rated utilit ies the highest for customer effort relating to staff knowledge, with a score of 7.2, followed by online retail with a score of 7.1.

It makes sense that if customers take time out of their day to contact a service provider, they expect agents to be able to answer questions quickly and accurately. If an agent must escalate issues to their line manager, refer customers to other departments or place them on hold to seek advice, customers spend more time getting their problem resolved, expending effort where they shouldn?t need to.

Banking received the lowest customer effort score linked to staff knowledge (4.2) indicating front line teams turn around customer queries effectively.

Reduce Effort, Raise Customer Satisfaction

Most queries can be managed and resolved first time providing staff have been given appropriate training and tools to access information and customer data quickly. Giving staff responsibility to sign off on the next steps, also fast-tracks problem solving.

Improving staff knowledge to reduce customer effort is a two-pronged approach: customer research to identify where gaps lie in staff understanding, and employee research to uncover barriers preventing swift problem solving, such as insufficient business training or cumbersome processes.

Figure 5 - Utilit ies Customer Effort by Interaction Type

Figure 6 - Customer Interaction - Staff Knowledge by Sector

Improving Utilities Call Centre Experience

Along with text, web chat, apps and social media channels, call centres are at the frontline of utilit ies customer services, handling a large proportion of service-related queries. Despite investment in call centre managements systems, customers are still finding services below par. Common complaints from our sentiment analysis include:

- Slow to answer calls- Long hold-times- Complex phone menus- Passed around departments and personnel

Focussed research on customer journeys through call centres will provide a robust, comparable measure of what customers expect, whether those expectations are being met and improvements customers want to see, enabling networks to tackle problems at source.

UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t 10 9 UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t

Ut i l i t i es Cust om ers? Com m en t s - Sen t im en t An alysi s

When asked what the 'ideal customer experience would look like?? utility customers cared most about ?staff knowledge? and ?customer experience?.

Using progressive sentiment analysis techniques, we can identify and categorise customer comments provided outside survey questions, turning them into scores. This allows us to uncover customer issues not mentioned in the survey body and determine how the respondent feels about a specific product or service - positive, negative or neutral. The sentiment scale ranges from -1.0 Negative to +1.0 Positive.

Figure 7 - Sentiment Analysis - What Utility Customers Want

Responding to the question about what their ideal customer experience would look like with their utility provider, customers rated St af f Know ledge and Cust om er Exper ience positively, while rating Call Managem ent Exper ience and List ening Sk il ls negatively.

UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t

10

1211 UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t

Verbatim comments about what customers wanted the most in relation to staff knowledge included:

Comments about what customers disliked the most in relation to their call management experience included:

?Prompt and accurate response as to the course of action that

needed to be taken from knowledgeable staff?.

'Helpful polite staff who can quickly and efficiently resolve

problems and answer queries and provide a good price'

?Customer service should have managers on hand to deal with

the issues raised not hide behind the telephone operator. They

should speak to the customer and address the issue directly

instead of continuously putting them on hold.?

'Phone answered straight away with out waiting. Customer

service person to know all about their services.'

Utility staff?s understanding and knowledge play a significant role in crafting a positive customer experience. Uncovering training needs via staff surveys and empowering staff to make decisions will help boost customer satisfaction and retention.

UK Em ployee En gagem en t Scores by Sect or

Employees working in Online Retail and Automotive Aftersales are the most engaged. Employees working in Restaurants and Distribution are the least engaged.

Although employee engagement and employee satisfaction are closely linked, engagement metrics show how staff much staff invest and care about the company they work for, its values and people. High staff engagement is desirable for employers as engaged staff are keen to further the company aims and show it by putting in discretionary effort ? behaviour that goes above and beyond what is expected of them - including giving stand-out customer service.

En gagem en t Fact ors Ut i l i t y Em ployees Crave M ost

Top engagement factors utility employees want:

- Support from your line manager (31% workers agree)- Understanding what is required of you (23% workers agree)- Being empowered to make decisions (23% workers agree)- Flexibility in your role (23% workers agree)

Compared to other sectors, utility workers prioritise support from their line manager more than staff in other industries (28%), suggesting gaps in managerial support. Employee pulse surveys are a quick and effective way to identify staff issues and improvement areas.

Figure 8 - Employee Satisfaction vs. Employee Engagement (Utilit ies vs. Overall vs. Other Sectors)Figure 9 - Which of the following are the most important engagement factors in your job?

UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t 1413 UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t

Online Retail and Automotive Aftersales staff are the most engaged with both sectors achieving a high engagement score of 8.2.

Sectors with the lowest employee engagement scores are Restaurants (7.5) and Distribution (7.7).

Employees in utilit ies show a fairly high level of engagement, providing an engagement score of 8.1, along with Supermarkets and Banking and Insurance workers.

About TTi Global

TTi Global, a Division of GP Strategies, is an accredited Market Research Society (MRS) Company Partner and leading UK-based market research agency, specialising in helping brands world-wide achieve their goals through high quality customer, employee and stakeholder research.

We have been delivering respected market intelligence for more than 30 years for private and public sector organisations across a vast range of industries and are the market research partner of choice for organisations including Haymarket, Northern Gas Networks, Jaguar Land Rover, Radian, Skanska, Honda and more.

What we do

- Customer and Consumer Satisfaction Research- Employee and Employee Engagement Research - Stakeholder Research- Channel and Partner Opinion Research

About our UK Cust om er Sat i sf act i on Ben chm ark Survey

Insight to Customer Satisfaction by Sector

Our UK Customer Satisfaction Benchmark survey delivers insight into the quality of customer service in Utilit ies and 11 other industry sectors. Rolling data is derived from an online survey of over 6,000 UK respondents, including 565 utilit ies customers, conducted over 21 months between 1 May 2017 and December 2018.

Respondents were asked to provide customer satisfaction, customer effort and employee engagement ratings, as well as answer questions about their interactions with different service providers.

Get i n t ouch

We hope you have found our report informative. For further details about our

customer satisfaction benchmarking reports, or to find out more about our

customer research and analysis solutions, email: research@tti- global.com

UK Ut i l i t i es Cust om er Sat i sf act i on - Look in g Ahead

Stricter regulation targeting affordability and better customer engagement present big challenges for UK utilit ies. They also come at time of rapid change for the industry. Energy and water companies are having to focus on other key areas, including innovation, efficiency and infrastructure improvements, squeezing margins ever tighter.

For company leaders facing difficult investment decisions around customer engagement and where to channel resources for the best return, quality customer research supports informed decision-making, providing evidence of what customers really want and where it sits on a priority scale.

UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t 1615 UK Ut i l i t i es Cust om er Sat i sf act i on 21- M on t h Ben chm ark Repor t