Ryanair is frequently slated for poor customer service in the media – but that hasn’t halted the airline’s growth.
As energy companies look to simplify their tariffs, it seems increasingly likely that they will take on aspects of the budget airline approach. That prompts speculation on what “extras” might be added to the base bill. Meter reading? Postal payment, and paying by cheque, instead of direct debit? Calls to the company, instead of managing accounts online?
Utilities are already trying to encourage their customers to use more cost-efficient tariffs. As a result, online tariffs where customers are paying by direct debit are cheapest. Sending cheques by post in response to paper bills is more expensive.
There is merit in making it still clearer how the various components of the energy bill are made up. Some would also argue, for a variety of reasons, that the costs should be broken down to show how much of the bill is split between the fuel, transport, taxes and supplier profit. But there is no possibility to opt out of any of those aspects of delivery, so that’s a rather different issue.
When it comes to optional “extras”, who wins and who loses? In fact, energy companies may be winners. Airlines have found that alongside speedy boarding and hold baggage, some customers will be glad to sign up for a longer list of extras, such as home pickup and car hire. Energy companies keen to upsell management services may find the same. The sales processes involved will be more complex and hence expensive, but utilities already run a variety of tariffs, and – maybe it’s a wrong impression – airlines’ optional extras look like a very a lucrative sideline.
Who else will win? Smart, active customers with access to internet services and flexibility. They get to pick and choose.
Who will lose? Those who find complexity hard, those who cannot be flexible, those who can’t or don’t want to connect with their utility online. That begins to sound once again like those “sticky” customers who are already losing out – disproportionately the old, poor and vulnerable.
Janet Wood
This article first appeared in Utility Week’s print edition of 2 March 2012.
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