How (and why) should Distribution Network Operators improve their customer experience?

15 January 2014

Hugh Gledhill

Hugh Gledhill


Distribution Network Operators (DNOs) are not the traditional customer facing utility. For many, it’s a service that will never be used. So why do DNOs need to focus their spending on the customer experience they provide?

All indications are that 2014 will be characterised by an increase in enterprise investment in the digital front office. Addressing the customer experience through engagement and enablement will drive priorities in spending, and technologies like CRM are expected to be major beneficiaries of this. This all makes sense in the context of utilities like energy retail, but it can be difficult to apply to the world of highly regulated DNOs.

Why should DNOs invest in their customer experience?

There are all sorts of justifications which are normally used to build a business case for spending on customer experience. In the distribution network business, it’s simple:

  1. Cash in on Ofgem incentives. To generate competition, industry regulator Ofgem offers financial incentives to DNOs which perform above average in customer satisfaction surveys, and penalties to those who fall short of the mark. It is essential that DNOs focus on the customer to achieve this, rather than simply keeping up with other companies.
  2. Increase customer loyalty. Though DNOs are often seen as regional monopolies, independent DNOs and connection providers now offer genuine competition – the share of new entrants in the gas connections market has grown to almost 50%, for example. With customers becoming increasingly discerning when it comes to searching for the best deal, it will be ever more important for DNOs to retain loyalty.

These reasons serve a double purpose as key metrics for monitoring the customer service offered: is my business providing an above average customer experience, leading to financial rewards? To what extent am I maintaining or improving my market share for connection services?

How can DNOs improve their customer experience?

Often the hardest part of kicking off an improvement programme is deciding where to invest. Businesses need to focus their attention on initiatives which will provide a quick, easily measurable return on investment. Fortunately, well established surveys such as Ofgem’s Broad Measure of Customer Service provide statistics which can help to indicate progress.

Here are a couple of suggestions which DNOs should consider

  1. Embrace the digital front office. In today’s market, customers expect to be engaged through multiple channels and manage their interactions online. Some DNOs have begun to take this on board, focusing their websites and services around the customer, rather than the company. Businesses need to evaluate their customer interfaces and work towards an intuitive, integrated experience.
  2. Learn from other utilities. The utilities market has been seen as slow on the uptake when it comes to adopting digital channels into their customer experience. This has all changed over the last couple of years. Certainly energy retail has undergone a transformation, but even regulated utilities like the water and sewerage industry have seen vast improvements. Take a look at Thames Water and Bristol Water for examples of what’s possible.

The second suggestion can actually be extended to other sectors, as Tristan Colgate advocates in his blog Powering better customer service for utility companies. With business customers in mind, banking and telecommunications companies are very often good examples of digital customer centricity.

Get the discussion started

The key to starting any project is to get people talking. Engage with the parts of your business dealing with customers on a daily basis. Actively ask questions to identify service shortfalls. Seek out experts in your industry who know how the competition are innovating. Above all, make sure that any initiative is a concerted effort – always keep the customer as a single, central point of reference.

As a final note, here are a few practical tips:

  1. There are several steps in getting a new connection, involving various checks, estimates and approvals. An online portal for customers to submit and monitor an application would keep this process much more organised and transparent.
  2. Many DNOs offer provide a text messaging service during a power cut. However, customers must register for this each time there is an outage – not always easy with no power! Why not store details in a customer management system and keep it to one registration?
  3. Joe Carlton of customer engagement agency Rosetta identifies gaps in utilities companies’ digital tactics – in particular, “Customer engagement needs a platform” notes the need for an enabling platform.
  4. Make sure communication is continuous. When a customer submits an online form, they expect feedback and updates – if an online portal isn’t available, then this needs to be managed via email or alternative routes
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