‘How do we consistently get 10 out of 10 ratings from our customers?’
Having worked in and with several energy and utilities businesses — from pre-privatisation British Gas in the 1980s to my recent role with Australia’s largest electricity distribution business, Ausgrid — I’m often asked for advice on issues around customer focus and stakeholder engagement.
It’s really telling though when I’m commonly asked ‘how do we improve our customer ratings’. Note the question. How to improve customer ratings, not how to improve the customer experience. It’s a subtle but important difference, and it’s only by focusing on improving the customer experience that you get sustainable improvements in the ratings they give.
On returning from Australia to the UK in August 2019, a UK electricity distribution business asked me ‘how do we consistently get 10 out of 10 ratings from our customers?’. The question falls into that trap of focusing on the ratings not the customer experience, but it was a good opportunity to address all of the issues the question raises, and to summarise in a paper what evidence and experience tells us is the route to a consistent 10 out of 10.
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Before documenting my response to the question, I want to flag a fundamental issue, and the main reason it’s rare for an energy or utility business to consistently achieve 10 out of 10:
Research among customers, customer advocates and other key stakeholders shows that a key driver of the overall ratings they give is openness/honesty/transparency which, in turn, leads to a perception of responsibility and accountability, which then drives overall ratings of a business or organisation in the energy or utilities sector (and many others).
However, most businesses — even, remarkably, monopoly distribution businesses that are not in competition with other businesses in their allocated, regulated area, and therefore have no ‘commercial-in-confidence’ reasons (or excuses) to not be open/honest/transparent — seem to lack the desire or ability (or both) to be open/honest/transparent.
They seem to see it as a threat rather than an opportunity. Further analysis shows this is mainly due to an historic tendency towards:
…centralised control (the world has changed — it’s digital and decentralised, you can’t ‘control’ it like you may have been able to do in the past — if you ever could, and there are benefits to letting go, working in collaborative partnership with external customers and stakeholders); and
…arrogance (many stakeholder surveys report that those running energy and utilities businesses have a tendency towards feeling superior, patronising customers and customer advocates, trying to operate on a ‘need to know’ basis, thinking they have all the answers, making statements rather than asking questions, being wrapped up in professional pride rather than engaging in open conversation with customers and stakeholders as equals).
I’ve personally experienced this both in Australia and the UK, and had it confirmed many times by peers working in and with businesses and regulators, including several passionate advocates for transparency and accountability feeling they had to leave roles in energy or utilities businesses, and even the sector in one case, due to lack of transparency, and lack of commitment to transparency.
So, if they don’t ‘get it’ on openness/honesty/transparency, they are never going to be able to consistently achieve 10 out of 10 ratings, and will be vulnerable to slumps in customer/stakeholder ratings whenever ‘opaque incidents’ occur and lack of openness - plus defensiveness or obfuscation - is experienced by external customers and stakeholders.
The irony was not lost on me when I recently applied for a role with a UK energy business and ran them through this research and evidence on the importance of being open and transparent…but I didn’t get the role…and when I asked for feedback…they said…wait for it…yes, you’ve guessed it…they couldn’t give me any feedback!!!
Anyway, here’s the paper I wrote on how to consistently achieve 10 out of 10, starting with some credentials and context, and then summarising the key steps to sustainable success…
My Credentials
I’ve worked in and with many energy and utilities businesses, and helped to set up the regulatory regime in the UK in the 1990s as a consultant working with the UK government and the early regulatory bodies.
I’m a professional researcher, former CEO of a research consultancy, and Fellow of the Market Research Society who pioneered many of the customer experience surveys and frameworks that are commonly used today in public services and privatised energy and utilities businesses.
I developed my skills and these approaches in roles such as a research executive with MORI; the first ever ‘Customer Research Manager’ at City of York Council; CEO of an innovative research consultancy working with many sectors including energy and utilities businesses, government and regulators; and as a consultant to Yorkshire Water for 10 years, 1991–2001, helping Yorkshire Water establish its customer service and customer research functions, and carrying out a seminal stakeholder engagement study after the drought crisis in 1995–96.
More recently, as ‘Customer & Stakeholder Engagement Manager’ for the largest electricity distribution business in Australia, Ausgrid, I designed and carried out and commissioned state-of-the-art research and evaluation into the key drivers of positive customer experience, perceptions, and fulfilment.
Learning from the Past (a past I was intimately involved with)
‘Customer Satisfaction’ has been studied by practitioners and academics since the early 1980s (at least), drawing from the management and motivation literature, such as Herzberg’s ‘hygiene factors’ and ‘motivation factors’.
Commercial organisations adopted customer satisfaction measures and processes in the 1980s and there was a ‘Customer Service Revolution’ in the UK, fuelled by best-selling books like Tom Peters’ ‘In Search of Excellence’. Whilst I was employed by MORI, we carried out the first ‘satisfaction surveys’ for councils (Lewisham and Southwark first, then all councils followed), and my own business, RBA Research, was a key player in the establishment and implementation of the mandatory Best Value KPIs Surveys in 1998 (also carrying out the national evaluation for the Audit Commission).
In the 1990s, most commercial organisations had ‘customer satisfaction’ measures and processes, and this practice was adopted by the NHS (‘patient satisfaction’), housing organisations (‘tenant satisfaction’) and the regulated utilities emerging from the ‘Thatcher privatisation era’.
In the 2000s, the science and art developed, with more focus on customer experience and behaviour rather than ‘satisfaction’, new studies of ‘consumer fulfilment’, the ‘Referral & Recommendation Revolution’ (fuelled by Fred Reichheld’s Harvard Business Review article ‘The One Number You Need to Grow’ and Bain’s popularisation of the Net Promoter Score, NPS), and the Nobel Prize winning work around (McFadden’s) consumer choice modelling and (Thaler’s) behavioural economics.
Also through this period, the concept of ‘stakeholder engagement’ (and its more controlling big brother ‘stakeholder management’) became more widely understood and practiced. There is much to learn from this evolving past for those seeking to deliver excellence in 2020 and beyond.
Learning from the Present (a present I’ve also been intimately involved with)
When I was appointed Ausgrid ‘Customer & Stakeholder Engagement Manager’ in August 2016, I carried out a strategic review, and commissioned a knowledge review, to evaluate what we have learned in the UK and Australia about customer service excellence and stakeholder engagement best practice. I interviewed researchers and managers at Ofgem and UK energy businesses, as well as all the rulemakers, regulators and other key stakeholders in Australia.
I then commissioned state-of-the-art studies among customers and stakeholders, including key driver analysis revealing the sub-conscious drivers of perceptions, behaviour, and referrals. This was written up, published, and presented to a stakeholder conference, branded the ‘Customers at the Centre’ project:
These initiatives were part of a movement within the Australian energy sector which has continued, with positive recent developments such as ‘The Energy Charter’, with all CEOs signing up to a commitment to deliver to customers’ expectations and priorities:
and Ausgrid has just released its first annual accountability report as part of the Charter commitment:
So, what does all this tell us about how to achieve 10/10 (remember the focus of this brief was on electricity distribution businesses, although much is transferable to other energy and utilities businesses and other businesses too)?
1. To achieve 10 out of 10 ratings, focus on taking appropriate action, don’t focus on the scores! As the founding father of executive coaching, Tim Gallwey, demonstrated, the scores are driven by the right actions, and just focusing on the scores can be a paralysing distraction.
2. Make sure core customer expectations are met in terms of standards of service delivery – Herzberg’s ‘hygiene’ factors. Most importantly, customers expect a safe and almost continuous electricity supply with occasions where there is an interruption being rare and short with elevated levels of communication before (if planned), during and after the outage. Fail in this regard, and there will be dissatisfaction with low scores resulting.
3. Meet customer expectations on communications as well as operational delivery — and it’s everyone’s responsibility. Businesses achieving 9 or 10 are those delivering consistently high standards of communications excellence. And not just corporate communications or call centres, it includes making sure all interactions with field staff are appropriate and effective.
4. As the recent research into sub-conscious drivers of energy customers shows, with ‘hygiene factors’ covered, the main drivers of overall scores are openness, honesty and transparency. Increasingly, customers and stakeholders are expecting this in ‘the digital age of accountability’ — it is becoming conscious as well as the key sub-conscious driver — and they think it is especially appropriate for a regulated monopoly distribution business that is not subject to the kinds of competitive pressures that lead to ‘commercial-in-confidence’ restrictions on transparency.
5. Energy customers want to have low and stable prices; compassionate understanding if they can’t afford to pay their bills or are in vulnerable circumstances; flexibility and choice in moving between retailers; and affordable access to emerging technologies. However, we need to distinguish between wants and expectations, and make it clear what electricity distribution companies can do, are doing, and will do to both take full responsibility where appropriate, advocate on behalf of customers, and empower customers to act themselves.
6. Everything outlined above is strategically sound, evidence-based, and practically possible. It requires a collaborative approach with internal colleagues and external stakeholders working together in partnership to deliver customer-centred operational excellence including communications excellencewithin a framework founded on openness, honesty, transparency, and accountability (plus always looking at what to improve not who to blame).
7. Corporate and regional action plans can be implemented within this strategic framework, relentlessly putting customers at the centre of ‘thinking and doing’. All managers are effectively customer advocates, with ‘Customer Experience Managers’ having a more formal and focused advocacy role, fostering customer-focused innovation and sharing ‘what works’ to spread good practice up-down-and-across the organisation, including the senior leadership team and board as it is essential to have integrated connection with key decision makers.
8. From these actions, 10 out of 10 is the inevitable consequence!
Paul Vittles FMRS FAMI FRSA Dip. Couns. is a researcher, evaluator, engagement advisor & facilitator, consultant, coach, counsellor, writer and speaker. His transferable skills and experience have been put to good use across many different sectors to support transformational change and sustainable success, including — though not limited to — the energy and utilities sector. Paul recently re-located back to the UK from Australia.
