NEWS

The latest UK Customer Satisfaction numbers are out – and it’s grim reading for utility providers.

The UK Customer Satisfaction Index for January 2024 has just been published. Unfortunately for the utility sector, the numbers are not good. Public satisfaction with their utility suppliers is at a ten-year low. 

In this article, we’ll dive deeper into these figures and try to explain why consumers don’t care for their utility suppliers – and if there’s anything they can do to win them over.

The UK Consumer Index

But first, what is the UK Consumer Index and why should we pay attention to it?

The UK Customer Satisfaction Index is the product of an online survey of more than 15,000 consumers. Each consumer gets to rate companies in up to five different sectors, but only one company per sector (the one they use the most). They rate 25 aspects of their experience with the company during the previous three months out of 10.

The index, published every six months, collates these results into a rolling average measure (out of 100) of customer satisfaction. The current release in January 2024 takes responses given in March, April, September and October 2023.

For utilities, 7,500 responses were taken into account. 

Utilities in the UK Customer Satisfaction Index

So why is the UK Customer Satisfaction Index such bad news for the utility sector? Let’s look more closely at those numbers.

The overall score for the utility sector in the January 2024 release was 69.4 out of 100. This is the same score it received in the previous July 2023 edition. Utilities is the lowest-ranked sector in the UK; the top scorer, non-food retail, scored 80.4/100. 

Looking even deeper, energy companies scored worse than water companies. Energy companies scored 68.4/100, while water companies hit 70.7/100. Both these scores are lower year-on-year, with both scores singling out complaints handling as particularly weak areas.

There were no utility firms listed in the highest 50 top-performing companies. Last year, UK Power Networks came third in the index, but this year, they were nowhere to be seen.

Looking for signs of life

These figures are undeniably bad for the industry, but are there reasons to be optimistic? 

Just one company – Npower – increased its year-on-year score by more than two points. Utility Warehouse’s score rose by 3.4 points, but it covers their entire business, including telecoms, which is how it is listed in the index.

The other sign is that while consumers dislike the utility sector, people don’t like anything much at the moment. The all-sector average, rating customer satisfaction across the board, is now 76.0/100, down 1.7 points year-on-year.  

Perhaps holding a steady score while other sectors drop in the eyes of consumers shows that the utility sector is beginning to address its problems.

What can be done?

So, what can the industry do to address these issues and get customers back on-side?

Firstly, it’s important to understand that the utility sector has been through a time of unprecedented upheaval. Energy prices have shot up due to factors mostly out of its control, including Russia’s invasion of Ukraine. The government intervened to control prices, but they were still higher than ever before. And now, that intervention has come to an end. While it’s not an excuse for poor customer service, paying such high prices may explain consumers’ current animosity toward their suppliers. 

On the other hand, people don’t like to see utility firms reporting profits while customers pay sky-high charges. They also don’t like how difficult it is to switch suppliers right now, with little incentive being offered to move your business elsewhere.

One interesting stat from the UK Customer Satisfaction Index was that only 22.7% of respondents said they would be happy to pay more money to their suppliers for an ‘excellent’ service. This, again, is much lower than the all-sector average of 31.3%. However, just this number represents an opportunity for utility suppliers to win business if they could deliver more for their customers. If one company (perhaps one of the bigger ones with more scale to operate in) could combine competitive pricing with excellent service, they could clean up as customers begin to switch again after the energy crisis.

Let’s hope the sector can begin to put its house in order, or we’ll be having the same discussion in six months.