Bad for business: How poor customer service is holding back the non-domestic energy market
“ Deliberately difficult…
…Time consuming and repetitive…
…Painful and frustrating.”
Few people call their energy supplier for fun, but these quotes from small businesses* reveal a deeper, more troubling issue with energy customer service. Last week, we published a blog using insight from this research to show how poor billing practices are impacting small businesses. However, this was just the tip of the iceberg.
Citizens Advice and Yonder have surveyed over 1500 small and microbusiness energy consumers to find out more about their experiences in the energy retail market.** This survey has revealed a customer service sector “defined by low expectations”. This means that a huge proportion of small businesses are struggling to resolve even simple issues with their energy supplier. Inconsistent advice, frustrating customer journeys and a lack of expertise from customer service agents are all causing disruption and delays for businesses. The situation has become so severe that the majority of businesses are avoiding making a complaint — even when they have a problem.
These attitudes are unsustainable, and have a direct impact on business growth. When businesses face delays resolving energy issues, they lose valuable time and profits. This can hinder their ability to grow and innovate.
Poor customer service can also reduce trust in the energy market. This can make it less likely that businesses buy into technology that improves energy efficiency. Such a loss of engagement risks slowing the transition to Net Zero and limiting green growth.
The move to Net Zero will need businesses to engage with more low-carbon tech and complex tariffs. This will lead to more complex problems when things go wrong. In these situations, business owners must have confidence that, when they reach out to their energy supplier for help, they’ll get the best possible service.
So what’s going wrong? And how do we fix it?
Diving into the data
Our research combined insights from a large survey alongside interviews with business owners.
We found 3 interlocking areas of dissatisfaction:
- Customers experience problems regularly, but struggle to get resolutions
The prevalence of businesses experiencing problems with their energy supplier is high. Of those surveyed, 1 in 3 businesses had made a complaint in the last 12 months. Of these, a staggering 47% involved Citizens Advice to reach a solution. This suggests that suppliers are struggling to deal with complex cases. These findings were supported by interviews with businesses where respondents reported frequently being passed to multiple call handlers before finding someone that could help them. - These experiences mean that customers don’t report complaints
Due to bad experiences, we found that many businesses are not using their suppliers’ complaint services — even when they need to. 57% of businesses had experienced a problem in the past 12 months, but had not made a complaint due to perceived issues with the process. Instead, businesses showed a “high tolerance” for disruption around their energy service — only complaining if the issue “seriously” impacted them. - Such ordeals are leading to a loss of fail in the sector
Interviews revealed that businesses’ relationships to their energy supplier are “defined by low expectations” which suppliers are able to meet “without significant effort.” Yet, despite these low expectations, overall satisfaction with suppliers is low. We found that, for businesses engaging directly with their supplier, overall satisfaction was at 70%. When we looked at satisfaction for the resolution of issues specifically, this fell to 63%. These percentages are far below the UK multi-sector supplier satisfaction levels of 75.8%.¹
In short, energy suppliers are failing to meet small businesses’ already low expectations. This is leading to many avoiding contacting their supplier altogether.
Small businesses with an energy complaint shouldn’t be having such a hard time. Under current regulations, energy suppliers have to follow the Complaints Handling Standards (CHS). These are rules that make sure suppliers have proper complaints processes in place. It’s clear that these existing standards aren’t producing better outcomes for consumers. So what more should be done?
Locking in better standards
We’d like to see Ofgem work with energy suppliers to level up complaint handling practices. The regulator should already be ensuring that suppliers meet current requirements, but their upcoming work programme is an ideal opportunity to help suppliers deliver the best outcomes for consumers in a changing market.
In September 2024, Ofgem published their Consumer Confidence Framework (CCF). This document sets out their intention to drive improvements for all energy customers. The CCF recognises that:
“every consumer should have the confidence that the system works in their interests, and that when things do go wrong, they will be fixed quickly and effectively.”²
Ofgem hope to achieve this by defining better outcomes for consumers, and ensuring that the sector is set up to deliver them.
Our research shows how far the sector is from delivering effective complaints services. However, good practice isn’t totally absent. We know from our own experience that many suppliers already provide excellent customer service. These suppliers tend to achieve lower levels of complaints and higher levels of customer satisfaction. With the Consumer Confidence Framework, Ofgem has an opportunity to enshrine these positive outcomes, and help all suppliers in getting the basics right.
If businesses continue to face poor complaints handling, then the consequences will extend beyond frustration — growth and sustainability will suffer. Delayed resolutions and fractured trust levels will discourage businesses investing in essential low-carbon technologies.
Work to improve complaints handling processes must start now. Intervention from Ofgem will be essential, but as we pointed out in our blog on billing practices — energy suppliers don’t need to wait for the regulator. The success of the future energy market — and of energy suppliers themselves — hinges on consumer engagement. Small businesses are too important to be left behind.
* In this blog, we’re using the term ‘small businesses’ to apply to both micro businesses (with 10 or fewer employees) and small businesses (with between 11 and 50 employees)
** Citizens Advice and Yonder, Consumer Experiences of the Non-domestic Energy Market, fieldwork Sept-Oct 2024, publication forthcoming.
¹ Ofgem, Consumer Confidence: a step up in standards, September 2024, p.6
² Ofgem, Consumer Confidence: A step up in standards, 2024, p. 3
