no-image

npower: Customer experience Titanic or Titan in the making?

Paul Massara took over as the chief executive of npower in January 2013. Arguably a difficult job to take on, not least because of the poor customer service reputation and previous mis selling practices conducted between 2009 and 2012, allegedly while they were ‘making changes to their sales practices’. Ofgem found them guilty in December 2013 and ordered them to pay £3.5 million back to vulnerable customers. So not a great back stop or foundation from which to make the announcement at the beginning of his tenure that his company would be “number one in the industry for customer experience by 2015”.

Bold words indeed. Not least because of the very challenging timeframe he’s committed to delivering on, added to the very low starting point npower are trying to build from.

Looking at the UK Customer Satisfaction Index results from January 2014, the utilities sector as a whole is the lowest performing of 13 sectors with an average index of 69 from 100. This has dropped by 2 points in the six months from the previous measure in July 13. Whilst all bar one sector saw decreases over the same period, utilities was the largest decrease. In comparison, from the January results, the highest performing sector is Retail (non-food) at 83.1.

To further compound matters, January saw Which? publish their Which? Switch customer satisfaction survey, covering 20 energy providers (17 from England, Scotland, Wales and 3 from Northern Ireland).

As shown in the table below, npower came 20th out of 20 based on each energy supplier receiving a customer score based on their overall satisfaction and the likelihood they would recommend it to a friend. nPower had 892 customers respond in the survey. To further add to npower’s woes, this isn’t the first time they’ve featured bottom in the Which? survey. It’s the third year running.

 

2014 energy companies satisfaction survey
Supplier

Customer service

Value for money

Bills (accuracy and clarity)

Complaints

Helping you save energy

Customer score

England, Scotland and Wales
1. Good Energy

82%

= Ecotricity

82%

3. Utility Warehouse

75%

4. Ebico

74%

5. Ovo Energy

73%

6. The Co-operative Energy

64%

7. Utilita

n/a

n/a

n/a

63%

8. First Utility

58%

9. Marks and Spencer Energy

51%

10. Spark Energy

48%

11. Sainsbury’s Energy

n/a

45%

= Eon

45%

13. EDF Energy

44%

14. Scottish Power

41%

= SSE

41%

16. British Gas

39%

17. Npower

31%

Northern Ireland
1. Budget Energy

n/a

63%

2. Airtricity

n/a

54%

3. Power NI

n/a

45%

Reflecting back on Mr Massara’s statement and intention given npower are already 12 months in to their 24 month improvement target timescale, a number of questions arise that I wanted to discuss;

  1. Was it all hot air and bravado in the first place that npower wanted to be No.1?
  2. Can it actually be done?
  3. Can it be done in 2 years?
  4. Has anyone ever done it?
  5. What would it take for it to be achieved?
  1. Was it all hot air and bravado in the first place that nPower wanted to be No.1?Whilst I’ve not spoken to npower directly, I’m assuming it wasn’t all hot air and bravado. The consequences and ramifications of making a statement like that without the necessary intent would be a further nail in npower’s customer service coffin. So, if we assume the intention was a serious one, it’s still a very brave statement not least because people will hold him accountable for delivering on his promise. People being customers, npower’s owners (RWE), industry watchers and the regulator Ofgem. Also by putting a statement and a commitment like this out in the public domain, in a reverse psychological sort of way, npower may actually commit to taking the significant steps and making the changes to achieve what they intend. Top down commitment and leadership, not just in creating a truly customer centric culture but in any business change is essential so Paul Massar’s message sends out clear signals into the business.
  2. Can it actually be done?In theory yes. In practice it’s a lot more difficult which is where the fun starts.
  3. Can it be done in 2 years?No. And it’s this timescale that casts doubt on the seriousness of npower’s intent, or at least their understanding of the task involved; the systems and process changes, the culture change and the process of becoming a world class customer experience organisation which isn’t achieved in two years especially starting from the position that npower are in. Not to mention the significant amount of customer trust they’ll need to win back and the vast amount of perceptions they’ll need to change along the way. 5 to 6 years might see them up to mid-way in the table or at least top of the big 6 and only if they deliver on everything they need to. I’ve just read a case study about the UK hotel chain, Best Western who successfully implemented a customer engagement strategy and it took 4-5 years before they realised the benefits. Having worked with organisations trying to improve the customer experience, it can take them 12 months to work out exactly what it is they need to do, so 24 months just isn’t achievable.
  4. Has anyone ever done it?Improve –yes. Improve radically and in this timeframe– very unlikely. I must confess, I’ve not trawled all the records and data, and there are many case studies of companies that have made significant improvements, but much more incremental change over a longer period of time. Invariably, large businesses like npower don’t or can’t ‘do’ radical change quickly. There’s too many processes not to mention the behavioural changes required which don’t happen overnight. It’s the old analogy of trying to turn the Titanic –trying to change the direction of something so large that you have to start turning (or changing) long before you want to see the change. What they’ll be likely to achieve in the 2 year period you could liken to rearranging the deck chairs on the Titanic. It might look tidier in the end but the ship is still going to sink.Another factor at play here is that the satisfaction improvement curve is exponential. Initially when organisations start working to improve, especially from such a low starting point, it is possible to make significant advances. However, as levels of customer satisfaction improve, further gains become more marginal and harder to achieve and so progress slows. At really high levels of satisfaction performance, incremental gains are very slight and barely change year on year. At this point it’s more about maintaining levels of satisfaction. In addition, none of nPower’s competitors are going to stand still for fear of losing market share. So in order to improve in relative terms, they’ve got to move faster than everyone else. On current data, they’ve not even started the momentum.
  5. What would take for it to be achieved?In some respects, npower should just scrap everything they do and start again, including the brand. Whilst not always practical, it would give them a psychological clean start and an opportunity to disassociate themselves from their previous mis demeanours. However as recent as February 2014, an article reported by The Telegraph carried the story of a customer who had been overcharged on her gas and electricity bill by over £1,600 for which npower cited ‘internal billing errors’ as the cause. Whilst it’s possible that that this could be an isolated incident, it’s unlikely but it’s these sort of significant process changes that need to occur in order to be at the top of any customer ranking.Assuming they’re not scrapping everything, then they need to go through and implement the usual suspects;
  • Top down visible commitment and actions
  • A significant budget and a serious appetite for change
  • Customer focussed outcomes clearly linked to business benefits.
  • Processes designed with the customer in mind and convenient to them rather than the business.
  • For everyone in the organisation to own the customer experience, not just the frontline staff
  • Effective metrics that both drive and encourage the desired behaviours
  • A willingness to listen to and engage with the customer

It’s an interesting position and a real challenge of a journey and one that a lot of people will be keen to watch, not least npower’s customers. If they pull it off – there’s a book to be written. Watch this space.

http://www.which.co.uk/switch/energy-suppliers/energy-companies-rated