The business to business (B2B) energy sector is long overdue a healthy debate about customer service.
The culmination of Ofgem’s Retail Market Review has served to highlight the need for a simpler, clearer and fairer energy market. Any customer will tell you that this does not sound like an unreasonable request, yet it is one that the industry has historically failed to meet.
Unsurprisingly, the majority of negative headlines have focused on the domestic sector, but customer service is fast becoming the fundamental issue facing commercial suppliers also.
Perhaps due to a misguided notion that business customers are only concerned with price, the B2B market has traditionally lagged behind other industries in the delivery of exceptional customer service. It is an issue that is set to come to a head in the medium term. With commodity prices and third party charges forecast to rise across the board – and established suppliers facing increased competition from independent providers entering the market – it is no longer a sound strategy for suppliers to market their services on price alone.
Transparency and flexibility are becoming the new benchmarks in the industrial and commercial and SME (small and medium-sized enterprise) energy markets and suppliers, like consumer brands, will soon live or die on the strength of their relationships with customers.
Research by Gazprom Energy shows that this is already happening. We recently asked a cross-section of businesses to rank their priorities when choosing an energy contract by assigning points to those they considered important. On average, respondents assigned less than 50 per cent of their points to price, giving slightly more emphasis to a combination of other factors, the most important among which were customer service and accuracy and simplicity of billing.
Of course, increased transparency comes with challenges.
At Gazprom, we saw this first hand when we introduced transparency around third party charges. With these costs rising beyond the control of suppliers, we recognised that it was only a matter of time before suppliers would have to clearly highlight what these costs were and, with certain products, pass them through to customers.
We saw being transparent about this as an opportunity to bring clarity where there had previously been confusion – based on a belief that by clearly separating these charges from the commodity price, businesses would gain a deeper understanding of the relationship between not only their usage and the cost of their energy, but also the proportion of third party charges that are outside of suppliers’ control. The initial reaction was not entirely positive, but any short-term pain was worth it to build long-term trust with our customers.
Indeed, it is in the provision of this kind of plain English, high quality information that the energy industry can regain a reputation for good service.
In the emerging energy market, gas and power will not be viewed as the primary commodity we as energy suppliers are selling. It will be information. Quality information, delivered at the right time, via the right channel, is the basis of good customer service.
As energy becomes a bigger cost and therefore a bigger priority for all business it is incumbent on suppliers to play a role in boosting the energy literacy of their customers. After all, better informed consumers will make more effective procurement and consumption decisions.
For the SME market this will be achieved by empowering customers with greater self-service. An internet banking model, where customers access the information they need on their own terms, backed by dedicated, human account management, is what is called for. The call centre model of customer service is no longer appropriate.
It also means suppliers doing the legwork to ensure customers are aware of, and able to access, the powerful information that can be harnessed by advanced meters. These devices provide the potential for businesses to develop a deeper understanding of their energy consumption, by accessing more in-depth information on what they are consuming and when. Suppliers should be actively encouraging the take-up of this technology and, crucially, educating businesses in how to access and interpret the data they provide.
At the mid and larger end of the market flexibility is increasingly key. We no longer see products as rigid templates for energy supply, but as the starting point for a partnership tailored to individual needs. Some customers are demanding this already and more will certainly follow.
For these energy buyers, quality information will mean direct access to the trading floor, giving customers the capacity to act on changes in the market directly and in real time.
Of course, this way of working requires sophisticated and malleable systems to price, manage and deliver these new contracts – and accurate invoicing. This investment on the side of suppliers will equate to the customer service the market needs.
So, while the Retail Market Review is tackling some (very important) practicalities such as contract roll-overs and broker conduct, suppliers should be thinking bigger.
As the government continues to reconfigure the energy industry to place more emphasis on renewables, customers will increasingly be asked to pay for more than simply the energy they use. The industry has to become more transparent and collaborative in response. Suppliers have a responsibility to not only treat customers fairly but to educate, inform and act as responsible partners so as to help customers take control of their energy consumption and costs.