Are utility companies really the worst call centres?

A decent article on the CCF website (i.e. it's not just a PR announcement disguised as news), which has research from the Citizens Advice Bureau and Ipsos Mori showing that in the UK utility call centres are some of the worst for customer service.

The Citizens Advice Bureau is a UK registered charity and Ipsos Mori is a respected polling organisation, so what they are saying has credibility. There main points are that:

• More than one in four customers who had contacted a utility company by telephone in the last 12 months were dissatisfied with their experience.
• A massive 89 per cent of respondents were dissatisfied or very dissatisfied with the way their last call to a landline provider had been handled.
• For those contacting a gas supplier, 81 per cent were dissatisfied or very dissatisfied with the most recent experience they had with their contact centre.
Citizens Advice chief executive David Harker said the report shows many companies have a long way to go before they respond to customer needs effectively.

What I thought was most interesting is that there is a common aspect to this and the known issue in agent metrics, known as the 'flaw of averages'. When agents are measured on an average (say average call handle time), the agents that meet the target might be getting all their calls resolved at roughly the average duration. Other agents may be overshooting badly on some calls and cutting short other calls, yet still achieving their average. This may or may not be a problem for the call centre, but at the very least means that the average is telling you little about the agent experience.

In the case of the Utility companies, I'd suggest that something similar is going on. There are many utility companies in the UK, but a few mostly ex-national monopolies, still have a very large customer base. These ex-monopolies tend also to have the oldest systems, the most complicated records and often have struggled to build a customer service culture.

So for example, I'm not surprised that 81% of callers have had problems with their gas company. British Gas has regularly been named Britain's worst utility for call centre service (see this for example: 'British Gas's 29th appearance on BBC Watchdog, October 2006') and yet it wasn't until January 2007 that British Gas's market share dipped below 50%. Similarly British Telecom is still the dominant provider of landlines and although it has not had quite the same reputation for customer service problems, it does have some. TalkTalk, the other major telephony provider has also had customer services issues, though these are more from trying to expand to quickly and the actions of some staff, rather than the issues the former state monopolies have faced.

The challenge for utility companies seems to be that the problems of a few large players (and their 'service cost only' focus) can distort the perception of the industry. It is perhaps no coincidence that smaller players who view cost in a wider context, like Powergen (see post "Happy New Year - 1,000 new UK call centre jobs"), have shown that it is possible to be a utility and deliver significant improvements in service. Powergen see that investing money in customer service (onshore) is an awful lot cheaper than investing money in marketing to rebuild a brand. The trouble is averages can hide the real variations when looking at industry performance.

Happy New Year - 1,000 new UK call centre jobs

I was wondering what blog topic I should begin the new year with. This good news story, "Call centre begins recruitment drive" in the South Shields Gazette seemed a very appropriate way of starting.

Garlands, one of the UK's largest privately held call centre companies is adding 1,000 jobs (100 in the first phase)to their South Shields centre. It's interesting to see that these are onshore customer service jobs, primarily for the telecoms/ broadband industry.

Now my experience of the telecoms industry is that many organisations have a high percentage of low margin customers and make their money on a much smaller percentage of high spending customers. In the past this has led to a focus purely on cost of service and for many organisations that meant looking at offshoring. It's good to see that the onshore is now a consideration again when customer service is a consideration besides cost.

In many cases, offshoring purely for cost led to a reduction in customer service quality (and as previously discussed in posts like "Offshoring and mainland Europe" and "On-shore Call centres in decline.... is that the whole story?"), that decline in customer service led to the brand value of the business being damaged. Offshoring should not be blamed purely for customer satisfaction declines though, any large change program focused only on cost would have reduced customer satisfaction. A good example is Powergen (now called EON), a big UK energy utility, who closed their Indian operations. The BBC reported their managing director as saying this was because Powergen were "...not prepared to achieve savings at the risk or expense of customer satisfaction". Six months later in Jan 2007 this seemed to have produced results as the BBC ran a story that Powergen had moved from last place on EnergyWatch's table of customer satisfaction to second place.

It's good also to see that Garlands as an onshore outsourcer recognise that they will compete on quality and innovation rather than cost. It's not just that they run Cisco technology in their call centres (they also use a number of other suppliers as well), but more that they have a strong focus on the quality of their workforce and the agents working conditions. I know recent surveys suggest that salary is a major driver for agent recruitment, but as I argued in my last post "Sometimes it's not rocket science....", it is a key factor in agent retention.

Anyway, a Happy New Year to all readers and I hope you have a pleasant work environment and successful year.