Large energy supplier avoids ~£7.5m in complaints costs

Ian Barker Small headshot image of Ian Barker, Managing Partner at BFY Group. 21 Feb 2024
Ian Barker, Managing Partner at BFY Group.

We supported a large energy supplier with a transformation programme, looking at how they can manage their complaints inflow and address the growing backlog. The programme transformed their complaints capability and resulted in ~£7.5m in cost avoidance.

What was our client’s challenge?

The supplier was facing into the effects of system, process, and people errors, driving an increase in customer dissatisfaction resulting in a 31% increase in complaints backlog.

With poor servicing and complaints performance, they were facing regulatory pressures with increased focus from the Ombudsman.

Why was this happening?

We worked with our client to diagnose the root causes of their complaint’s challenges. We found;

  • Contact volumes were high, resulting in material impacts to service levels and a reduced ability to resolve complaints on first contact.
  • Outsourcer competency and culture led to complaints being handed off to the complaints team, rather than attempting to resolve the issue with the customer on first contact, creating a growing backlog for the team to manage.
  • The backlog meant complaints handlers were significantly impaired in their ability to resolve complaints early, with an average of 10 days before a complaint was first reviewed, a x5 delay compared to review targets.
  • Advisor skill and complaint complexity drove an increase in the number of days taken to reach a complaint resolution. Advisors were only able to resolve 14% of complaints on first contact with the customer.
  • Process failures were adding additional waste into the complaints handling process - i.e. one-in-four complaints are being closed due to no contact, which were then subsequently re-opened.
  • 10% of known complaints were left unresolved by 56 days, driving significant costs through additional fees and operational outlay.
  • We found that 66% of customers were engaging with the Ombudsman before they had a chance to reach a complaint deadlock.

The root cause analysis enabled the development of change requirements, ultimately aiming to support with the management of inflow and reduction of the growing backlog.

How did BFY help?

We helped our client to enhance their complaints performance and culture by:

  • Transforming the operating model, creating teams to work closely with outsource partners - resolving complaints quicker, providing feedback and coaching to the front line.
  • Embedding agile ways of working, coaching, and leadership role modelling to help create urgency. While establishing accountability and communication between business departments to drive improved resolutions.
  • Ringfencing older complaints and establishing a “backlog” squad to focus on complaint resolution, and to prevent complaint ageing and ombudsman risk.
  • Replacing standard MI with actionable insight, based on predictive analytics and AI. Creating clear visibility of performance and complaints to drive correct behaviours and manage risks.

These initiatives ensured a step change not only in complaints culture, but enabled for success to still be achieved in managing complaints inflow, and reducing the growing backlog.

What results did this deliver?

Within the 5-month period, we helped to transform our client’s complaints operation, releasing some of the external pressures they were facing, while realising ~£7.5m in cost avoidance.

Key results included:

  • Enabling a 50% reduction in their complaints backlog
  • 65% increase in Same/Next Day closures
  • Increased day 56 resolutions by 2%, resulting in ~9k fewer complaints to the Ombudsman per year.
BFY were brilliant at creating the operating rhythm for the recovery programme – we all recognised it would be challenging, but we were in this together as one team. The BFY team set the pace and helped my team see that what we’re trying to achieve was possible.

Head of Complaints

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Small headshot image of Ian Barker, Managing Partner at BFY Group.

Ian Barker

Managing Partner

Ian shapes the BFY vision and inspires our team to bring it to life, while remaining central to complex client engagements in Strategy, Commercial, and Operations.

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