5 reasons why great customer service is essential for the prosperity of energy companies
Ensuring that your customers have a great experience is important to any business, as it’s the key to attracting and retaining customers. In the energy sector, it’s critical.
In the Which? survey of 2019, energy companies, along with airlines and telecoms businesses were rated the worst sectors for performance in customer services. In a price-driven industry often tarnished with negative publicity, the far-reaching effects of poor customer feedback for businesses in the sector can be catastrophic, especially in a world dominated by public shaming on social media.
At United Gas & Power, specialist commercial energy supplier, we believe the key to building a successful energy business is to focus on building a great reputation underpinned by excellent customer care.
Your online reputation on review sites
It’s never been easier to share your opinions with others than it is today. With countless public review forums for domestic and commercial businesses, online reviews are a huge factor in a customers’ decision-making process. According to recent research:
- 85% of customers trust online reviews as much as personal recommendations
- Customers read an average of 7 reviews before deciding to trust and purchase from a supplier
- 41% of millennials interact with their energy supplier on social media
While reviews can often feel like something you have no control over, you do have control over the experience you give to customers.
Many businesses spend a great deal of time and effort on their online branding, but it can often take time to see any direct results from this activity. Online reviews on the other hand can have an immediate and direct impact on your company’s ability to attract new business.
Given that the majority of online reviews relate to the experience and service level a business provides, it’s important to ensure that your customer service levels are as near to perfect as you can get them.
Retaining existing customers is cheaper than recruiting new ones
Research published in the Harvard Business Review states that globally, depending on what industry you’re in, acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one.
In the UK utilities sector, Ofgem reports that the rate at which energy companies are losing customers is in excess of 19% every month and rising (note, this statistic covers both domestic and commercial markets).
The fact is that customers have higher service expectations than ever before and the customer experience benchmark is no longer solely competitor energy companies, the bar has and will continue to be set by the consumers’ best customer experience - regardless of sector, size or geography.
As new entrants join the energy sector, bringing experience of customer service excellence from other markets – the competition is increasing. Given that one of the main reasons that consumers decide to switch energy supplier is customer service, poor customer care can and will have a direct impact on an organisations ability to retain customers. As customer choice continues to expand, energy companies without a key focus on customer service will ultimately lose out.
Customers will pay more for good service
Research shows that 85% of business energy customers in the UK are willing to pay up to 25% more in order to get better customer service. Accurate billing, ease of query resolution and the ability to quickly speak to an informed customer care professional all have a vital role to play in the customer’s perception of your business.
The reality is that, if a customer has a good experience with you, they’re far less likely to “shop around” at the end of their existing contract than those that have a poor experience, even if they could save a little off their energy bills. Quite simply, customers become less price sensitive if they’re happy with the service they’re receiving.
We’re not suggesting that competitive pricing isn’t important, it is. But low prices alone won’t guarantee loyalty. Energy companies who rely on price alone leave themselves wide open to a high level of customer churn.
Happy customers refer others
Clearly, an unhappy customer is unlikely to refer anyone else to your business. Here are a few sobering facts:
- 92% of people trust recommendations from people they know
- 77% of people are more likely to buy if they’ve been referred by someone they trust
- Referral marketing generates 3-5 times higher conversion rates than any other form of marketing
If you have a motivated, well-functioning customer service team, they’ll work hard to not just satisfy, but exceed the expectations of your customers, which will ultimately lead to a great reputation and referrals.
Customers will forgive mistakes more readily if they feel valued
Great customer services teams, staffed with happy people proud of the role they play in the customer journey, will have a significant impact on making customers feel valued. As a consequence, customers who feel valued will be far less likely to complain – publicly or otherwise, even in the event of a mistake or dispute.
Every business will make a mistake at some point or other – and complaints are a natural consequence. However, by investing in a customer services function and procedures that expertly handle those situations, no matter how rare they may be, it is possible to turn a negative brand experience into a positive one.
For more tips on handling customer complaints see our blog “The 7 golden rules for turning customers who complain into life-long brand promoters” HERE.
United Gas & Power
UGP is the UK’s highest rated commercial energy supplier. Our clients’ belief in us extends beyond the belief that we will simply deliver.
To us, customer service is not a department, it’s an attitude. By placing the customer experience at the heart of everything we do, our clients trust that we recognise each of them as unique, we tailor our solutions to meet their needs, and we nurture trusted long-term relationships by delivering an unrivalled level of customer care.
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