The Energy Supply Sector shares many characteristics with Retail Banking and may even be on a similar trajectory of increasing regulatory pressure.
Energy Suppliers are overseen by powerful regulators and ombudsmen, they have high volumes of customers and their service is central to everyday life. This makes them susceptible to high volumes of customer complaints.
In recent years the Energy Supply sector has come under increasing scrutiny. The sentiment from Markets Authorities is firm, to deter breaches of conduct through levying heavier penalties. Regulatory fines have increased significantly, showing a similar pattern of increase to the Financial Services sector.
Between 2013-2014 complaints increased by 60% and whilst providers have improved complaint resolution rates they are still achieving less than 40%. With 44% of customers switching due to dissatisfaction in the complaint handling experience this represents a very serious commercial issue; not to mention a major focus of the regulators, who have made customer satisfaction a key measure.
The underlying challenges for Retail Banks have been very similar to those now facing Energy Suppliers. As Retail Banks have discovered, operational processes need to be aligned to policies and policies to regulatory standards. A responsive feedback mechanism is required to do this and given the complexity of customer operations this is not always easy to achieve.
Independent testing methodologies help to create alignment. Such techniques also help to mitigate against wrong behaviours becoming entrenched and hidden legacy issues building up. Getting to the bottom of why customers are complaining might seem simple but can be easily obscured. Outcome testing and root cause analysis have proved highly effective for Retail Banks in preventing failings. They provide insight to help direct resources and focus on making the right improvements.
Improving complaints handling is central to where energy companies should be focusing their efforts. Not only will this keep at bay unwanted regulatory attention but it also keeps customers.
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