Surge in Npower complaints reveals need for revamped assurance

Things go wrong. Mistakes happen. That is why businesses have departments to handle customer complaints, and watchdogs keep a close eye on them. We all know this. And two big drivers of complaints are bills, and change. Everyone knows that too. So why are big businesses blighted by a recurring story, with a simple and predictable plot: they change their billing systems, and complaints go through the roof?

UK energy supplier Npower recently proved the rule by generating exceptional levels of complaints following what they describe as “challenges with a new computer system”. Consumer Futures, a quasi-governmental consumer protection body, determined that between April and June, Npower suffered double the rate of complaints of any other supplier.

Consumer Futures’ methodology involves calculating a weighted ratio of complaints per 100,000 customers, where the weighting reflects the severity of the complaint. The weighting incorporates such factors as whether a vulnerable customer was at risk of disconnection, and the time it took for the supplier to handle the complaint. Npower’s June score of 202.5 was five times higher than the 38.3 score attained by SSE, the best of the Big Six UK suppliers. Npower also compared unfavourably to ScottishPower (41.0), British Gas (55.5), and E.On (59.9). EDF, the former worst offender, reduced their complaint rate from 119.0 in October 2012, to 75.5 in June 2013. In comparison, Npower’s complaint rate has repeatedly risen from the 86.5 they scored in October 2012.

And there is no doubt that billing is to blame for Npower’s flood of complaints. Per Npower’s own data, 69.5 percent of complaints relate to billing. In contrast, 11.5 percent of complaints came from customers questioning their payments, whilst metering is the subject of a further 9.6 percent of complaints.

At a time when politicians are routinely bashing the UK’s Big Six about price rises, it makes no sense to feed the trolls even more ammunition. Rightly or wrongly, there is evidence of strong public support for more government intervention in the UK energy market. Price controls are now the official policy of the opposition party, and one poll reported 68 percent of the public would support renationalization of the energy companies. Even if execs calculate they have to favour their owners over their customers, making your company so unpopular that it gets renationalized is hardly in the best interest of shareholders.

In such circumstances, would it be foolish to invest more money and effort into ensuring system changes have no negative impact on customers? Or is it more profitable to suffer negative headlines across the press? Npower made their choice. Whilst the British Prime Minister urges customers to switch suppliers and his main rival has switched his supplier, Npower’s mushroom cloud of complaints has generated gloomy headlines across the press, including the BBC, Mirror, Guardian, and Which Magazine.

Whilst the press and politicians obsess about customers being overcharged, flawed system migrations also lead to lost revenues. As demonstrated by this story, Npower are over a year behind with billing some customers, and this is ‘due to system problems’. That will definitely hurt profits because, in line with other British suppliers, Npower will not backbill beyond 12 months.

Add together the cost of handling a mountain of complaints, the cost of bad publicity, the cost of losing customers to rival suppliers, the cost of increased regulation, and the cost of lost revenues that cannot be backbilled, and there must be justification for spending a little more on preventing billing glitches before they happen.

There is a discipline which combines science, engineering and art to reduce errors in the processing and billing of transactions. People call it different things. Some of the names are misnomers, some are silly, and some are unprintable. One relatively sensible name for it is ‘business assurance’. But whatever we call the discipline, the tools and techniques for preventing and identifying error are well-known and well-proven. Those tools and techniques would be further improved, and would deliver more benefits, if companies utilized them at times of major change, to anticipate and prevent peaks in errors and complaints. There is no need to limit their scope to catching what goes wrong with (so-called) business as usual. On the contrary, it makes more sense to deploy assurance on a flexible, agile basis, concentrating resources on projects that cause most change, and hence drive most risk. Whilst it is easier to assure systems and processes that are stable, there is more value gained by applying assurance techniques during periods of transformation.

Only one thing stops firms like Npower from deploying well-known tools and techniques to prevent and identify the errors that typically follow major changes to systems. It is a miscalculation. The cost of engaging good assurance professionals is low, compared to the multiple costs of error and failure. However, the cost of those failings are hard to forecast. These costs are often spread around disparate parts of the business. Worst of all, gaps in data or the inability to link cause to effect, may mean costs are still hard to quantify even after the company suffers the negative consequences of its mistakes. As a result, the wrong investment decision is made. Management skip the up-front cash cost of a single stitch – namely, business assurance – which would have saved nine stitches – everything from complaints handling and goodwill credits to public relations and government lobbying.

This leaves two areas where assurance professionals need to raise their game, and do a better job of selling their services. First, they need to be less enamoured with wait-and-see assurance techniques, where they start by learning how a company and its systems currently work, then they gather some additional data, and then they determine where the errors are. More work needs to be done on techniques that predict errors for future systems. Hence assurance shifts from collecting data on what went wrong, to analysis of designs in order to identify what can go wrong.

Second, when customers complain, this is evidence of failings that the business neither predicted, nor prevented. Customers and assurance professionals are rivals, in a race to identify the company’s bugs and slip-ups. This is a race that the assurance professional should seek to win, because every penny spent on handling complaints was potentially better spent on proactively eliminating the causes of complaints. As such, assurance professionals need to do a better job of quantifying the costs and drivers of customer complaints, and robustly demonstrating correlations between error prevention and the number and type of complaints received by the company. Such data would help management to make better decisions, justifying expenditure on assurance in order to lower the subsequent cost of handling customer contacts.

It is easy to assume that a rise in complaints will follow every major change. The pattern has been repeated many times. Assurance professionals need to step up and to show how they can assure performance in advance of a major change, and how this can reduce the number of complaints that occur further down the line. Change and complaints will always be linked, but in future, the connection should become theoretical, embedded in the calculation of the value added by good, proactive, assurance.

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About Eric Priezkalns 7 Articles
Eric is a widely recognized expert on risk management and business assurance, and author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. Eric was Director of Risk Management for Qatar Telecom, and he has worked with a wide range of mobile and fixed-line telcos, as well as advising software developers and system integrators. In the UK, Eric is also known for his critique of billing accuracy regulations. In Qatar, Eric was a founding member of the National Committee for Internet Safety.


  1. The balance between Consumer and Supplier is such a delicate one – nobody is perfect, so nobody will ever be able to get it just right. The supplier should try to keep better services for consumers to avoid any miss happening.

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