I have a confession to make: Extra
Energy is my own supplier of both gas and electricity. I switched to them two
years ago after doing a price comparison on a well-known website that is owned
by a consortium of Meerkats.
Yes, that’s right; I foolishly chose
them purely because they were the cheapest!
Between January and March this year,
Extra Energy received 1,682 complaints per 100,000 customers. This is the
highest ratio of complaints over the five year period that the data has been
collected. (Incidentally, one of those 1,682 complaints was from myself, relating
to a cock-up about my direct debit payments).
Extra Energy is a new and relatively
small company. They only launched in 2014, but have grown rapidly to over 500,000
customers by offering some of the cheapest tariffs in the energy market,
something which has been aggressively pushed on internet price comparison
sites.
The company claims that it has struggled
to cope with this demand. Ben Jones, the Managing Director of Operations at the
company said: "It is true to say that the first quarter of the year was a
challenging period and some customers were affected. Unfortunately we did not
put customer service resources in place quickly enough."
But here is the really interesting point:
the league table results show that both small and large suppliers are capable
of delivering good service, proving that a company's size is no excuse for poor
customer service.
In my opinion the reason Extra Energy
has performed so poorly in the league table of complaints is not because of
their size. It is because they have aggressively pursued speedy customer
acquisition (through low pricing) without having robust customer service strategies
in place beforehand.
I've seen this happen before in other
companies. In fact I am guilty of it myself, having once been in charge of
marketing at a company where a massive PR success story (including wide coverage
in the national press and on TV) led to us not being able to cope with the
overnight increase in demand. It’s fine to have marketing success,
but you must also have the customer service strategies and processes in place,
ready to cope with the increase in demand. I suppose I learnt my lesson the hard way. But at least I got a free meerkat toy!
Moral of this story: Don’t pursue an increase in customers until
you have the customer service strategies in place ready to cope with the
increase.