Scottish & Southern Energy plc:
Commitment-based ManagementTM - An Initial Engagement
Client and Initial Situation
Scottish and Southern Energy (SSE) has roughly 8.4 million customers with profits growth of 20% per year for the last four years. In 2007 SSE had pre-tax profits of over £1 billion. When we started working with SSE, it was already leading the industry in customer service, assigned by having the least number of complaints to the regulator. Its low churn numbers of 15-20% per year were also at the top. It did not use more refined customer satisfaction measures such as Net Promoter Score. But Frederick Reichheld, the inventor of the net promoter score, undertook research that showed the UK Utilities had an average Net Promoter Score of about -20%.
Client’s Request and VISION’s Approach to the Challenge
SSE managers had the ambition to lead customer service at a level that would make it competitive in a top service industry. In particular, SSE sought to create a service advantage that would more than pay for itself by decreasing churn through the increased loyalty of its customers. We started our work at SSE’s three telephone service centers (in Cardiff, Perth, and Portsmouth) with approximately 500 service representatives in each. While UK energy companies were among the lowest in net promoter score, we sought to move customers touched by the service centers to ratings closer to the leaders such as Harley Davidson which sports a 70% net promoter score.
VISION’s Actions
We organised the call center pods into learning teams. Learning team members recorded calls that went great and poorly and brought them to the team meeting so that they could brainstorm together on improvements. To guide their discussions we trained the call center people to listen to customers, reflect their concerns back to them, negotiate solutions, and then make a promise and keep it. We engraved only one rule in stone: “Negotiate and make a personal, individual promise to each caller.” We did not add: “Make promises that the company could keep.” We find that we never have to get employees to make such promises because when employees are making personal promises to customers, they tend to make the minimal, conservative promises that they are sure the company can keep. At first SSE call center representatives made conservative promises that they knew could be kept. This policy did not wow the customer. To encourage call center representatives to make bolder promises that the customers valued, we created a new, temporary role, a Resolver, whose job it was to ensure that the back office—usually billing—would find a way to keep the call center representative’s promise. When the Resolver noted that a promise was unlikely to be fulfilled, the representative immediately called the customer, apologized, and renegotiated. Qualitative interviews showed the apologies strengthened trust.
Results
Customers responded very quickly and very positively to receiving personal promises and their fulfillment. There were big jumps in net promoter scores in the first month for customers touched by the newly trained representatives. The main difference for most customers was the careful, sympathetic listening, then a personal promise to get the change made within a certain time. From the perspective of customers, promises varied widely. One would receive the promise of a call back to check in and make sure the problem was resolved. Another would receive the promise that a technician would come within 30 minutes either side of 11 AM. From an operational perspective, the promises have been manageable.
VISION worked with SSE’s service centers for 18 months and helped SSE take the net promoter score for customers recently touched by the service center from 10% to 52%, a level close to Harley-Davidson, Apple and Amazon, the top scorers in turning customers into promoters. According to the London School of Economics study, “Advocacy Drives Growth” (Sept. 2005), for large retailers, every 1% increase in promoters is typically worth £8.8 million in revenue and every 1% decrease in detractors is worth £24.4 million in revenue.
Client satisfaction
We started out industry leaders. But with VISION’s help, we have moved beyond our industry and can begin competing on service as though we were trusted retailers. We’ve truly transformed our customer service and developed a new competitive advantage. Making and keeping commitments to customers is now a part of our culture.
Colin Sempill, Head of Strategic Change, Scottish and Southern Energy