Somewhere along the way, someone forgot to ask; what would our customer think about that?
I’ll just give you the abridged version of this story to bring you up to speed. As we all know, in the past ten years or so, the price of energy has skyrocketed. For Sydney residents electricity prices have increased by 107% (and no, this is not a typo), whilst the cost of natural gas has increased by 40%*.
With a household including two teenagers, plus regularly visiting family and friends, every new energy bill that arrived was seemingly higher than the last! As well as yelling through the bathroom door at teens 1 and 2 to get out of the shower, my frugal hubby decided to shop the price and compare providers.
By combining gas and electricity through one of our long term service providers and paying on time, he saved up to 30% off the quarterly bills! Now our twelve month contract is coming to an end – and here’s where hubby has found himself in customer hell!
This all began with an email from our energy provider. At the top of their communication was a large image of a modern, happy family enjoying their perfect life in a sun drenched, white living room – you know the one. Immediately under the image however, was the following headline …
Your Benefits are being reduced.
Check out your new plan details below or compare plans at Energy Made Easy.
I don’t need to tell you how this story ends. The basic premise of customer experience excellence is that building rewarding relationships leads to life-long customer advocates and profitable growth. However, having done the math; no easy task with the little information provided, our supplier is now on notice.
So what we can learn from this customer experience:
1. Through the lens of the customer journey
If the aim of customer experience is nurturing customers to become loyal advocates then the most valuable customers are not new, high acquisition cost customers but those in low cost, long term customer relationships. In most cases, acquiring a new customer will cost 5 times more than retaining an existing one. Acquisition and retention go hand-in-hand, however these stages in the customer journey are often managed by siloed business functions with their own goals, budgets and agendas. In this scenario one functional group managing sales, with their goal to attract new customers using an aggressive price discounting tactic, is at odds with another group managing renewals, with their goal to lower costs, advising existing customers that their benefits will be reduced. When siloed functions work together with a customer-centric mindset, they view the end-to-end relationship through the lens of the customer journey; developing a strategy that helps customers move seamlessly from one stage to the next and critically, ensures that they remain customers.
2. Whole of company understanding of customer needs and expectations
Customers expect products and services to be easy to understand, easy to use and easy to find – ease and speed are considered by customers as experience basics. On receiving said energy provider’s email informing him of the reduction in benefits, hubby wanted to understand how much extra per quarter this would cost us – missing from the communication was the detail of how this could be calculated, how the changes would impact the family budget and what other options might be available. The customer journey is mapped by stages, steps, goals, touchpoints and emotions. The provider should have known that this first touchpoint would be painful when they made the decision to reduce customer benefits. They should also have known that successive customer interactions would likely compound the frustration; such as not providing customer decision making information within the email, having to call multiple times and wait on hold, speaking with uninformed employees, having to undertake the time consuming cost analysis himself and then the negotiation back and forward – each interaction negatively impacting the experience and lowering the opportunity for customer conversion, whilst increasing the likelihood of negative referral.
3. What would our customer think about that?
Somewhere along the way, someone forgot to ask; what would our customer think about that? It struck me as I observed this debacle unfolding, that in the course of trying to solve the business’s problem of market share through incentivising supplier switching, decision makers hadn’t stopped to ask how a short term sales tactic would impact customers at the renewal stage. Herein lies the challenge for companies that have not embedded customer-centric practices into their culture. Yes they might have a customer focus; a VoC program for example that measures and reports CX performance, but when the ‘rubber hits the road’, employee behavior remains business-centric. When customers’ needs are at the centre of employees’ thinking, problem solving and decision making, everyone around the table is working to solve the customer problem; or in this case, working to prevent the customer problem. A customer-centric mindset should prompt everyone to ask – what would our customer think about that?
*”The pattern of price increases over the 10 years to June 2013 has differed across states and territories. In real terms, the rate of increase for electricity has been 30% in Perth, 41% in Adelaide, 73% in Brisbane and 107% in Sydney. For those cities connected to natural gas networks, household gas price increases over the 10 years to June 2013 have ranged from 40% in Sydney to 78% in Perth.”
Energy prices—the story behind rising costs