Supplier performance dips as star rating methodology changes

So Energy has blamed its recent low performance in the Citizens Advice star ratings on a change to the methodology in how the rankings are worked out.

The latest quarterly results, for July to September 2023, show the disruptor brand has fallen to 15^th place, down from 11^th in Q2. (The full star ratings are at the bottom of this article.)

In previous years, So Energy has performed consistently well in the rankings, which rates a retailer’s customer service via metrics such as contact waiting time and how many complaints it has received.

The results for Q3 2023 were subject to a change in the methodology for how the ratings are worked out, with Citizens Advice removing the billing and switching metrics despite opposition from suppliers.

Speaking to Utility Week about his supplier’s rating, So Energy co-founder and interim chief executive Simon Oscroft said: “Citizens Advice has changed the way they do the rankings as of Q3 which does not favour us as much as the previous way but ultimately we are looking to make big improvements on our customer service across this year.

“We have been disproportionately impacted by the crisis but as we go into 2024 we are already making big steps and our performance has already improved significantly from these stats.”

In a decision document published towards the end of last year, the consumer charity explained that the volatility experienced by the market over the last two years has contributed to a decline in customer service standards.

It added: “Some of this decline has been driven by a significant increase in demand for help and support from their customers due to high energy prices and the wider cost of living crisis. Suppliers have been dealing with an increased number of customer contacts and many of the issues are more complex.

“But it is also clear that suppliers need to make improvements. Given these market conditions, Citizens Advice believed it was necessary to review how the star rating measures supplier performance on customer service.”

The charity revealed that the “vast majority of respondents” to the consultation disagreed with the removal of the switching metric, with the most commonly cited reason being that the number of people switching suppliers has been increasing, with potential for this to increase further as the market normalises.

Explaining its rational for proceeding with the proposal, Citizens Advice said while it recognises that switching is returning to higher levels, switching is still “well below” 2019 levels and remains a “relatively marginal part of the market”.

“As a result, we believe that the original arguments made in the consultation paper for this metric’s removal still stand: it is a relatively small part of the market, and other issues such as complaints and ease of contact should take priority given current market conditions,” it further added.

All respondents meanwhile disagreed with removing the billing metric from the star rating, with the overall concern being that “billing remains a key part of the customer journey and that removing it would narrow the scope of the star rating to only those customers who have an issue with their supplier”.

Despite these concerns, the charity is proceeding with the removal of the billing metric.

It explained: “As the aim of the star rating is to push supplier performance beyond mere compliance, it is difficult to see the utility of this metric. Supplier performance on this billing accuracy measure is almost universally high with little variance.

“Over the last eight quarters, scores have averaged 3.84, with a high of 4.11 in Q4 of 2022 and a low of 3.56 in Q1 of 2021. The metric therefore provides little in the way of differentiation between suppliers and simply inflates scores by taking into account an aspect of customer service which suppliers should be (and are) performing routinely.”

Meanwhile the charity has also decided to keep the weighting of the customer commitments at 10% and to keep the weighting of the complaints metric at 35% and it will increase the weighting of the customer service metric to 55%.

Topping the latest ranking is Shell Energy, which has since sold its domestic energy supply businesses in the UK and Germany to Octopus Energy Group.

Kerri Mills, chief operating officer at Shell Energy Retail, said: “Our first place in the rankings is a testament to the hard work and dedication of our people, who have put the customer first in everything we do.

“Across energy and broadband we’ve had one of the lowest call waiting times in the industry, and our laser like focus on problem solving has reduced complaints and increased first-time-fix rates.

“Customers will continue to receive our best-in-class service while accounts start to transition over to Octopus.”

EDF Energy was the highest ranked large supplier, coming in at fifth place, having dropped from third in Q2.

Utilita has once again ranked bottom of the ratings. The retailer has previously taken issue with how the rankings are calculated considering it is a prepayment meter specialist which is compared against the same criteria as mainstream credit suppliers.