Why is Contempt for Customers so Common?

For a long time, I thought the thing that differentiated Clean Currents the most was our exclusive commitment to clean energy and the fact that we walked the real green walk. Now that I’ve got some perspective on things, and I can see the broader electricity market, I realize that there’s another attribute that can compete for the key differentiator of the company. In a word, I’d say it’s “Integrity,” and it most relates to one of the most overlooked parts of business – customer service.

Check out the web sites of pretty much every retail electricity supplier and they all claim in some respect or another to have amazing service. While I can’t speak from actual direct experience, I know that when we presented Clean Currents business plan to industry experts and insiders, the most typical response was something like, “wow, you guys have incredible customer loyalty, but you spend too much on customer service.” See, it’s hard to trace a direct line from customer service to increased profits. Thus, these experts would point out that almost every supplier simply outsources customer service or pays some hourly wage employees to answer the phones. When it comes to customer service, unfortunately, there are no Tony Hsieh  (Zappos) types in the energy industry.

There’s also an attitude that acquiring customers takes precedence from an organizational perspective over keeping customers. This is in part because many consumers simply sign up for an energy supplier and don’t change for a long time. Following business as usual practices, thus, will mean you get to keep a good chunk of customers anyway.  In this rush to acquire customers, ethics and integrity go out the window.

In one recent example, a class action suit filed against the electricity supplier, Viridian in District Court in Maryland alleges that Viridian mislead consumers into signing up with them by making it seem like there could be “savings.” “At a minimum, Defendant exploits ambiguities in their representations by creating the expectation of competitive pricing, when in fact the promise of savings in their energy bills is illusory,” the suit alleges.

Viridian is not alone in these questionable marketing tactics. I remember small commercial customers complaining to us that they got switched when a rep from the utility came in and told them they could lower their electricity rate. Turns out the rep was actually from Liberty Power, a retail supplier who had switched them to their service. This deception happens in the green power field as well. One direct mail piece making the rounds seems like it’s coming from your local utility offering you a “clean energy option,” that you didn’t have before. You simply check a box and send a form back and poof, you get clean energy. However, the small print reveals this is a mailer from a competitive electricity supplier and not from your local utility, and the rates are variable. Several people, some of whom are in the energy business, have asked me about this, saying that they didn’t know the utility was offering clean energy now. The deception, which could very well be legal, is used because it works, but is it the right or ethical thing to do?

Unfortunately, until consumers fight back, these deceptive tactics and lack of concern about customer service will likely continue.


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