Utilities providers have become more sophisticated at communicating with customers. But does that sophistication extend to complaint handling? What are the benefits of 'closing the communication loop'?

Deregulation of the UK utilities industry has placed the consumer firmly back in the driving seat. Today’s customer is faced with a variety of suppliers and offers and the emergence of independent web-sites encouraging users to compare prices and service options has made switching providers as easy as clicking a mouse-button.

Arguably, customer loyalty has become a thing of the past, with the onus now on utilities companies to keep hold of customers and to nurture them. It may have become a rather ubiquitous business mantra but it remains the case that retaining and growing existing customers is a far more cost-effective practice than attracting new business.

Customer relationship management (CRM) solutions have sprung up on the back of this business climate and utilities companies are now starting to realise value from their CRM initiatives. Certainly, industry data management and analysis techniques are relatively sophisticated and the more forward-thinking gas, water and electricty suppliers are becoming increasingly adept at communicating effectively with their customer base. Bills and statements are now being made to ‘work harder’, carrying marketing messages and cross-selling intitiatives in a bid to grow customer share.

Yet, whilst outbound messaging techniques continue to improve, technological proficiency is less impressive when it comes to handling incoming customer complaints. This has serious implications – not only from a customer retention point of view, but also from the fact that industry regulators are now demanding proof of response to complaints from utilities providers.

Complaints continue to rise for many providers. For example, figures from Energywatch reveal that British Gas set a new complaints record in March ’07 with more than 14,000 disgruntled customers. And the Consumer Council for Water released figures stating that customer complaints about water companies in England and Wales rose by 10% last year, to their highest level since 1994.

Ironically, the cause of many of these complaints has been the introduction of new billing systems, intended to improve customer service. Often, the failure to present bills on time has been compounded by the inability of customers to get through to the company’s call centre.

Water industry regulator Ofwat stipulates a ten day response to complaints in its Guaranteed Standards of Service legislation. Given the continued level of customer dissatisfaction, providers must look to solutions that automate the monitoring and reporting of complaints response if the process is not to become an expensive and time consuming drain on resources.

Certainly, such solutions exist and pioneer providers are investing as much time and budget in closing the customer-feedback and reporting loop as they are in ensuring excellence in the customer-facing documents that are despatched. Here, bar-codes on complaint responses are traced and reports automatically generated on the strength of the information contained within the code.

Clearly, providers cannot afford to focus on the outgoing message at the expense of robust solutions to deal with incoming response handling and reporting. Only through sophisticated ‘closed-loop’ messaging strategies can utilities companies be certain that – at least as far as customer communication is concerned – every effort is being made to enhance the customer service experience.