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Utilities billing leaves us all confused.com

by david edwards | October 18, 2011 | 1 Comment

By David Edwards

The issue of consumer confusion around the Big Six’s billing has been all but impossible to ignore this week

Firstly there was a survey from the electrical contractors’ association that revealed half of consumers cannot understand what their energy bills actually mean. Then hot on its heels came the news that a ‘mystery shopping exercise’ by consumer group Which? found the tariffs used to calculate bills are so complex that the energy firms’ own staff don’t understand them.

Next Ofgem announced its proposed reforms for simplifying billing and pricing structures and finally we’ve arrived at a summit held by David Cameron and Energy Secretary Chris Huhne to discuss how to make it easier for households to switch suppliers.

These events make clear that consumers, regulators and government have all decided now is the time for complete transparency. They demand to know not only how much they are being charged for their gas and electricity, but also how each of the energy suppliers is arriving at these figures.

Customers need clear and concise communication to avoid confusion

This will never be quite as simple as some of the tabloids would like us to believe – a simple price per unit of energy consumed would fail to take account of what proportion of customer charges relate to green taxes, infrastructure investment and a myriad of other factors.

As I’ve discussed previously on this blog, giving this information to customers in a way they can easily understand will require a level of communication and interaction well beyond the means of the traditional billing statement.

These events also show just how pressing the need is for the industry to build strong relationships with customers and add value beyond price. Otherwise we’ll see a merry-go-round of constant switching from one supplier to another that leads to ever-spiraling costs for all parties involved.

External communications need to be improved alongside internal challenges of building more customer-centric systems and processes if employees are to have the relevant information at their fingertips to enter into meaningful dialogue with customers.

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