Customer Service in UK Gas Distribution. Mark Oliver (Director of Business Services Wales & West Utilities)

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1 Customer Service in UK Gas Distribution Mark Oliver (Director of Business Services Wales & West Utilities)

2 UK Gas Distribution - Ownership National Grid offered 8 Gas Distribution Networks for sale in 2004, finally selling 4 Wales & West Utilities is an integrated network with the benefit of focus, but the comparative disadvantage of scale & geography WWU were acquired by a Macquarie led consortium and became an independent Network in June 2005 In October 2012 ownership moved to CKI National Grid Gas economies of scale of 4 networks plus transmission, with obvious geographical and procurement leverage Scotia Gas Networks 2 networks with no geographic synergies, but with scale benefits from parent SSE Northern Gas Networks owned by CKI and initially adopted asset owner model, with all operational activities outsourced to United Utilities. Now reverted to an integrated model

3 Who we are & what we do? We provide a safe and reliable gas supply to 2.5m homes and businesses Serve a population of 7.5m people throughout Wales & South West England Employ 1,950 skilled and experienced staff Provide a 24/7 gas emergency service Significant mains replacement and capital investment programmes Connect 15,000 new customers every year Proactive campaigns to raise awareness of Carbon Monoxide poisoning and addressing Fuel Poverty

4 The journey so far. Introduced an entirely new suite of SAP centric IT systems in 2005/06 Achieved staff reductions of 20% - without compromising delivery performance and customer satisfaction Implemented new employee terms and conditions that reduce employment costs by 25% - these terms now apply to almost 60% of our people Significant 0perational productivity improvements - over 200 contractors removed Rationalised main operational depots from 23 to 7, and offices from 4 to 1 Property and facilities costs reduced by 40%, IT operating costs by 35% Alliance Partner back office costs reduced by 20% - through the implementation of a single delivery model Huge investment in people - recruited 100 apprentices & 250 operatives - reducing average age of operational staff from 47 to 41

5 Customer Satisfaction in the Gas Industry Background Customer Satisfaction has been included in our Licence Conditions since 2005 Work activities include Emergency & Repair, Mains Replacement and Connections Each network appoints independent Market Research company to carry out monthly surveys Data for all completed jobs in each workload category provided for testing Minimum returns required to ensure data is representative National league tables are shared quarterly and annually Prior to 2013 Customer Satisfaction was not incentivised RIIO Business Planning introduced The Broad Measure of Customer Satisfaction with incentives of +/- 0.5% ( 4m) of allowed revenue Customer Satisfaction has become very competitive with significant improvements evident in year 1 of new price review

6 Broad Measure of Customer Satisfaction Introduced as part of business planning process with incentives and penalties of 4m a year Customer Satisfaction Quarterly surveys (replacement, emergency/repair and connections) Up to 2m incentive or 2m penalty for worst performing GDNs. Fixed targets in each work category achieving maximum reward is extremely challenging Emergency & Repair 9.0 Connections 8.4 Mains Replacement 8.5 Complaints Handling 2m penalty only for worst performing GDNs based on following output measures: Complaints resolved in D+1 of receipt Complaints resolved in D+31 of receipt Number of repeat complaints Number of Ombudsman Cases in favour of the complainant

7 Stakeholder Engagement New activity for Networks with an incentive of up to 2m pa Annual submission to Ofgem: Part 1 Demonstrating the minimum requirements have been met Part 2 Evidence to demonstrate our strategy is effective and the outputs have been delivered and presentation to independent panel of experts Rationalised Stakeholder strategy to focus on: Raising the awareness of Carbon Monoxide Addressing Fuel Poverty Improving our services to Vulnerable Customers Business as Usual activities captured and recorded Critical Friends and Vulnerable Customer Panels established Working to improve the cultural elements of Stakeholder Engagement

8 Connections Performance Guaranteed Standard consistently achieved - 99% with single digit failures Fuel Poor scheme well established with partners NVQ s for Non Standard Quotation staff Improved Commercial Focus Job Costing income and costs at work order level Cost of first 10m & efficient spend Overall Connections timeline reduced from 65 to 24 days 99.9% Planning dates within D+5 Acceptance to completion now <21 days (was >40) Staff efficiencies achieved 100 fte s to 63 Online Connections Service available via our internet

9 Customer Service Metrics Key Metrics 2005/6 2006/7 2007/8 2008/9 2009/ / / / /14 Complaint Volumes GSoP Payments 255, ,540 67, ,444 93,171 87, ,238 89,444 78,538 Energy Watch/ Ombudsman cases (against WWU) Overall Position in Customer Satisfaction League Tables out of 8 1st 6th 5th 1st 1st 1st 1st Joint 1st Joint 2nd Provision of a connections quotation (Target 90%) N/A 99.82% 98.00% 98.69% 99.07% 99.21% 99.11% 99.22% 98.71% Provision of plan dates N/A 92.17% 99.29% 99.80% 99.96% 99.93% 99.91% 99.94% 99.97% Substantial Completion N/A 95.85% 97.57% 96.52% 95.91% 94.33% 95.04% 95.13% 94.62% Time in working days from payment to work completion N/A Responding to complaints 97.44% 99.71% 99.28% 99.14% 99.22% 99.24% 99.57% 99.72% 99.84% Advanced notification of planned works 99.30% 95.88% 96.92% 97.68% 98.06% 97.56% 95.40% 98.24% 98.42%

10 Customer Service Performance The leading Gas Distribution Network in the UK for Customer Satisfaction Winners of the Gas Industry Customer Services Award in 2009, 2010, and 2012 Winners of UK Utility Industry Award for Customer Service in Only GDN to have zero Ombudsman complaints for 3 yrs Proactive Programme of Stakeholder Engagement activities Overall Customer Satisfaction Scores out of 10 GDN 2008/9 2009/ / / / /14 Wales & West Scotland Southern East of England West Midlands Northern Gas Networks North West London Sector leading customer satisfaction performance

11 2013/14 Key Achievements Earned 1.9m of Customer Satisfaction incentive income Significantly improved our customer satisfaction levels from 12/13 ( 1.3M) Despite achieving our best scores ever in all three surveys we have fallen into 2 nd place Leading GDN for complaint handling exceeding internal & Ofgem targets (zero penalties) 52% of all complaints resolved within D+1 6.7% unresolved within D % Repeat Complaints Zero Ombudsman complaints WWU have not had an Ombudsman complaint ruled against us for the last 3 years

12 Institute of Customer Service Achieved world class customer satisfaction ratings in ICS survey considerably ahead of the utility and wider sector benchmark performance One of only 79 Companies in the UK to achieve ICS ServiceMark accreditation Wales & West Utilities UKCSI Overall Utilities Professionalism Quality & Efficiency Ease of doing business Problem solving Timeliness CSI

13 Institute Of Customer Service Utility Comparisons

14 Local Incentives Customer Satisfaction cards left on every job Staff encouraged to have conversations with customers 100 reward each month for the team and individual who gets the most cards returned. Charity donation to the customers nominated charity Quarterly competition for First Line Managers to encourage their teams to participate, winner receives 100 per head towards a team building event Numerous staff events to celebrate our successes Recognition for staff who receive letters of commendation Introduction of ABCD Club Award winning Arts Based Training approach

15 Innovation Customer Service App Developed Ability to measure real time performance every day Visibility of best and worst performers Roadworks.Org Improved communication for our Stakeholders Visibility of type and duration of works available on a daily basis Smart phones for all staff and devices for First Line Managers Ability to authorise timesheets and expenses from the field Facilitates the use of newly developed App s Connection Application process available On-line Obtain quotation, process payment, select a planning date and track your order Significant take up since launch Developing for back office staff to manage the end to end process

16 Summary Customer Service has become an essential part of organisational strategy It needs to be owned at Executive level and supported by the whole business Customers needs are changing, driven by technological, demographic and social and economic factors Customers are more demanding timeliness, efficiency, costs and compensation when things don t go right Advances in technology make easier for people to communicate - good and bad news Perception of the utility sector is generally poor we need to continue making improvements and collaborating Incentive regulation is driving improvements in the gas industry Being ranked number 1 in the industry has many benefits: Reputation Regulator relationships The cost of getting it wrong

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