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Responses to COVID-19 boost energy suppliers’ reputations with customers

Kate Hill Kate Hill Lead Research Analyst
28th October 2020

2020 is, unfortunately, proving to be a year that we will never forget. It has been a year of change and adaptability for us all, including domestic energy suppliers, with many suppliers having had to adapt to increasing numbers of customers in distress while operating at reduced capacity and/or with staff working from home.

In the first three months of the pandemic suppliers prioritised protecting customers from immediate harm, particularly vulnerable customers or where customers were at risk of going off supply, including self-disconnection. With some suppliers using messaging on phone lines or other channels that sought to deflect non-emergency contact from suppliers, this led to reduced call-volumes and in many instances lower complaint levels. According to Ofgem in an open letter published on 16 June, suppliers “quickly adapted to new ways of working” and found “alternative ways to deliver good outcomes for customers” and as noted by Ofgem they had “dealt with many issues head on”. Since 1 July suppliers have stopped deflecting non-emergency contact other than in exceptional circumstances.

A result of supplier’s focused priorities led to lower complaints as recorded by Ofgem, particularly for the six largest suppliers, which saw complaints in Q220 fall by 35% on average. Medium suppliers saw complaints fall by 4%, while small suppliers saw complaints rise by 45%. However the figure for small suppliers was skewed by complaints for iSupply Energy, Green Star Energy and Tonik Energy which were up 2,392%, 105% and 190% respectively with the suppliers all involved in an acquisition or a supplier of last resort process. Citizens Advice Picking up the Pieces report in June 2019 noted that failed suppliers generally performed poorly on complaints and highlighted that prior to IRESA’s failure in 2018 it performed 45 times worse than the median supplier. Disregarding these suppliers, small supplier complaints were down 10% in Q220 on Q120. Ofgem suggested that the significant reductions in complaints may have been customers being more forgiving than usual with their suppliers and the fewer customers who contacted them may have felt they received a good service.

The latest Citizens Advice ratings for Q220 also show improved levels of complaints with suppliers scoring on average 0.4 points higher than in Q120. On average suppliers also scored 0.4 points higher for call wait times and 0.1 points higher on average for customer guarantees, meanwhile suppliers scored 0.3 points lower on average for accurate billing. Overall, suppliers’ customer service ratings were up 8% on average in Q220 on Q120.

Thus far, the statistics from these two sources show that most suppliers have been able to hold service steady during the COVID-19 period. Indeed another source, Ofgem’s Consumer Perceptions of the Market report for Q220, found consumer satisfaction with their supplier increased from 73% in Q120 to 77% in Q220. However, as the furlough scheme ends, suppliers will no doubt be faced with the challenges of increased customer financial hardship as the latest UK unemployment rate for June to August was up 0.6 percentage points year-on-year at 4.5%.

Looking beyond the immediate impacts of COVID-19, many suppliers are also going through transformations that are likely to impact on customer service, of which many are short-term issues, with long-term goals. To date, there have been seven suppliers exiting the market this year, either through supplier of last resort process or acquisition, and with this comes the transition of customers to the new supplier and the impact that can cause, for example on billing, metering and debt and the subsequent rise in complaints. As mentioned above, the complaints statistics for iSupply Energy, Green Star Energy and Tonik Energy have all increased  following the exits of their original companies.

Some suppliers are also going through billing and account management migrations and are moving their customer accounts onto new IT platforms, which are processes that have historically created temporary increases in complaints during the transition of customers on to the new system. There are also digital transformations such as introducing or improving apps, webchat or artificial intelligence into services. Citizens Advice estimates that supplier transactions and new systems combined, are changes that will impact services to around 10mn people. These changes will need careful explanation and engagement with consumers as part of their implementation.

Our Domestic Supplier Insight Service keeps you up to date with the latest news in domestic supplier activity, including service, key news, strategic moves, marketing and branding, and financial performance. This includes a quarterly reference pack with in-depth profiles by supplier, supported by a streamlined monthly update of the most important news. The service also includes a monthly dataset, allowing you to compare key metrics such as complaints data and customer service rating across suppliers.

For a free trial of our Domestic Supplier Insight Service, please contact Kate Hill at k.hill@cornwall-insight.com