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The most recent UK Customer Service Index revealed that while satisfaction levels across the utilities sector have improved in the last 12 months, they still lag behind the UK average. Writing for Utility Week Jo Causon, chief executive of the Institute of Customer Service, explains the growing importance for utilities to get their service strategy right.
Undoubtedly it has been a tough two years for organisations, employees, and customers across all industry sectors. However, there is a ‘perfect storm’ brewing on the horizon for the utility sector. Many of the issues are well documented, with a challenging mix of inflationary pressures, pricing issues, market, and regulatory changes.
There is additionally the collapse of over 27 energy firms as well as the emerging opportunities and challenges from changing technology and the need for sustainable long-term strategies around net zero, smart cities and the growing demand from a broad range of customers for renewable energy sources and sustainability. 
Given the market challenges, many customers are going to be under greater pressure, and some are and will be experiencing significant financial difficulties. How organisations and any regulatory intervention respond to these issues will make the difference to their long-term reputation and ultimately survival.
Our research consistently shows that those organisations that do the right thing, get things right and treat their customers with empathy, build the trust required to maintain loyal customers who will stick with you for the long term and importantly enable the organisation to post better returns and higher levels of productivity.
Our latest UK customer satisfaction index (UKCSI), published in January, revealed that customer satisfaction in the utilities sector has improved by 1.8 points over the last year. This is good news when you consider the challenges the sector has faced, but a closer look at the results reveals a more complex picture.
Despite the overall rise in satisfaction, one in five (20.8%) customers have experienced a problem with a utility company in the past 12 months – the highest level ever. Furthermore, customer satisfaction levels in the utilities sector continue to lag behind the UK all-sector by quite a margin.
As customer frustrations grow, the proportion of customers willing to pay more for excellent service in the utilities sector, even if it costs more, has risen from 24.6% to 31.1%. This presents a clear indication that cost is not the only factor (and for many probably is the most important one) and this is perhaps an opportunity for brands to harness the power of an improved customer experience to boost their financial results in a difficult climate.
So what can utilities organisations do to improve their service experience?
The truth is, it depends on the relative strengths and weaknesses of your organisation – something which our UKCSI utilities sector report sheds some light on. Organisations need to look carefully at their processes, supplier relationships, business continuity and resilience to reduce problems and develop contingencies.
Effective training and development and the quality of communications with customers and suppliers are key differentiators of customer service and business performance – investing in such training will pay dividends as employees will be well informed about how to deal with challenging customers and circumstances.
Overall, our Index tells us that organisations have got better at using a blend of technology and human intervention to improve customer experience. Average satisfaction is higher than in January 2021 for experiences conducted in all channels except in writing, with some of the biggest improvements in webchat, text, app and social media experiences.
With the use of technology accelerating during the pandemic, there is potential that further, effective implementation may hold the key to better standards of service and increased customer satisfaction in the utilities sector. Businesses need to provide adequate development opportunities for their people to ensure they are equipped with the relevant skills and sufficiently prepared for the future world where digital and in-person interactions are increasingly interwoven.
The utilities sector has come under particular strain over the past year. With solutions to the cost of living and the energy price crisis facing many in short supply, customer service will need to prepare for some very challenging interactions with people who may be facing difficult situations.
As evidenced in our UKCSI top 10, excellent customer service matters because it delivers better financial results, helps improve productivity and builds trust. Customers are likely to be more discerning about how and where they spend and to seek relationships with organisations they trust.
The index shows that the three leading issues customers want organisations in the sector to improve are: developing more knowledgeable staff; making it easier to contact the right person to help; and website navigation.
Ultimately, excellent customer service is founded in an organisation’s ability to manage problems and disruption whilst consistently demonstrating helpful, ethical behaviour.
This UKCSI provides both hope and warnings, and I look forward to seeing how organisations interpret the findings, and apply its lessons to evolve their service offerings to rebuild post pandemic in 2022 and beyond.
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