In July 2023, Ofgem announced it would be implementing a variety of new rules specifically designed to improve customer service in the utilities space.
Following extensive engagement with energy suppliers, businesses, and consumers, Ofgem outlined a number of new guidelines. These guidelines focus on delivering more extensive support to customers struggling with energy bills, prioritising customers in vulnerable situations, and fundamentally increasing consumer access to service and support teams.
According to Ofgem director Neil Lawrence, consumers have long struggled to access the quality support and service they need from energy providers. The new rules aim to reduce the delays and frustration citizens face when they need help.
So, how will these regulations impact businesses in the years ahead?
Exploring the New Rules Implemented by Ofgem
Over the last few years, Ofgem noticed an increase in negative sentiment from domestic consumers towards their energy providers. Not only are rising energy prices placing vulnerable consumers under significant financial pressure, but many are also failing to respond to customer requests for support in a timely manner. Ofgem’s proposed series of reforms, set to begin rolling out in December 2023, aim to address these problems.
For households, the proposals include:
- More comprehensive customer service: Ofgem will require energy supplier inquiry lines to stay open longer, including on weekends and evenings. Additionally, they will require companies to make it easier to contact teams through multiple methods, including phone lines, web-chat, email, and other digital platforms.
- Emergency support: The new guidelines will ask businesses to provide 24/7 emergency support to customers who are cut off from power or gas supply due to issues like meter faults. This will require companies to invest in round-the-clock customer service teams.
- Supporting vulnerable customers: Companies will now be required to prioritise customers in vulnerable situations. They’ll also need to deliver more effective support to customers struggling with bills, including early intervention guidance and temporary repayment holidays for those unable to pay.
- Keeping consumers informed: Suppliers will be required to share insights into customer service performance. This is intended to help customers make better decisions when switching between vendors.
To address the non-domestic market, Ofgem has begun to adapt the Retail Energy Code to avoid excessive delays during tenancy changes. Additionally, they will be urging suppliers to be more flexible with businesses that have already agreed to peak fixed-rate prices.
Companies from all industries have been increasing their focus on “customer experience” as their core differentiating factor. 88% of companies now prioritise customer experience as a core component of excellent performance. Unfortunately, many utilities and energy companies in the UK have struggled to live up to expectations.
It has been suggested that the energy crisis made it harder for consumers to switch suppliers due to a lack of price differentiation, and therefore, suppliers may have reduced focus on customer service without the fear of losing customers.
The new reforms introduced by Ofgem should push energy companies to increase their focus once again on customer service. After all, they’ll now be required to offer comprehensive 24/7 emergency service, build their own omnichannel communication strategies and report on customer service metrics.
Of course, these changes will lead to some challenges for business leaders. Going forward, energy companies will be under more pressure than ever to adhere to rising customer experience expectations.
The Benefits for Suppliers
Ofgem believes the new reforms will help to create more resilient energy companies, as well as delivering significant benefits to consumers. For instance, the regulatory group is considering asking suppliers to “ring-fence” a portion of customer credit balances. This move would allow energy suppliers to stay resilient in the face of severe but potentially emerging market shocks. At the same time, consumers would benefit from a more stable energy market. The idea is to ensure companies can always hold a significant level of capital, making sure they can weather changes in energy prices going forward.
At the same time, the new rules mean that energy suppliers can focus their attention on improving customer service and building loyalty with consumers. To stay competitive in this space, business leaders in the energy world will need to ensure they’re competing on the battleground that arguably matters most: customer experience.
How to Adapt to the Changes
The key to success is ensuring you have the right strategy in place to adhere to new rules for comprehensive service and customer support. Outsourcing is likely to be an option for many suppliers as the new rules immediately increase the coverage required.
DDC OS are outsourcing specialists in the utilities space, supporting over 6m domestic customers across multiple suppliers. We have a breadth of experience and expertise that we utilise each day, creating strategic roadmaps with our clients to ensure they not only meet regulatory guidelines but also provide a fantastic customer experience.
Whilst we have multiple operational sites across the UK, Balkans and Philippines, our goal isn’t simply to increase our client’s customer service team size but is to identify ways to encourage self-serve, focus on fixing issues in the back office that will help reduce the need to contact in the first place.
Don’t just take our word for it. Contact DDC Outsourcing Solutions today to discover how you, like many other suppliers, can benefit from partnering with us.
Alternatively, reach out directly to Jade Rogers, Director of Business Development to kick start the conversation straight away!