We’re often told that experience matters more than the product or service – that it’s what stops customers leaving for a slicker rival. But does that hold true in every sector?
Utilities are different. The average person spends just minutes each year thinking about their energy or water supplier. And in some markets, competition is limited or nonexistent.
We work with local and national utility companies across Europe, and we strongly believe that investing in customer service is worth it – above and beyond the minimum standards required by some country’s regulators. We have a few reasons.
Trust is more important for utilities than other businesses
A really interesting example of this is the German Stadtwerke companies (municipal utilities).
Before the EU began opening its energy markets to competition, energy in Germany was provided by 1400 state owned monopolies (the Stadtwerke companies).
Their monopolies were abolished in 1998, but customers will still choose their local Stadtwerke over a range of cheaper alternatives on comparison websites.
It’s because people trust them. They’re familiar, they’ll have a local office, and picking them means money goes back into the city’s budget.
Trust makes for good customer relationships, but it also has a powerful influence on purchasing decisions.
Stadtwerke companies know this – and for some of them this is why customer service is an essential part of their business.
Stadtwerke Hamm (who we’ve worked with) understand that while the engineer fixes the utility infrastructure – the customer service agent fixes trust.
They ran an improvement project to make sure that they always have a human agent available.
Which sounds like it would require a small army of agents, but they did it by:
- adding an automated voice to their phone system that handled the ‘hello, how can we help – of course, I’ll connect you’ stuff
- building self service into their voice channel for things like meter reading submission (which can be a big drain on agent time for a utility company)
- adding upgraded call volume tracking so they could plan to meet demand spikes
That new phone system improved the experience enough that it boosted their sales. A strong sign that investment in customer service tech for utilities does pay off.
Good customer service drives utility profits even if you have zero competitors
“Those people over there are selling the exact same thing as us! So let’s be the ones who are easier to deal with.”
81% of customers will repeat purchase from your brand if the experience is good. Customer service is a competitive edge in a crowded market.
But if you’re the “only shop in town”, what then?
On the one hand, being easy to reach and get along with does just seem like good sense in any scenario.
On the other hand…with no competitors…you could unplug the phones for a few days and probably not lose customers. (DISCLAIMER: That’s a terrible idea, obviously.)
It’s an easy choice though; customer service *still* has value even without competition – according to research.
Neil Morgan – Distinguished Professor of Marketing at Indiana University – analyzed 16 years of data from public utilities firms.
Here’s what the study found:
- Customer satisfaction predicts better profits – even if customers have no option to switch to a different provider
- On average a 1% improvement in customer satisfaction decreases operating costs by $29 million
- These cost savings comes from improved efficiency across customer service, distribution, and selling and general administrative costs
- Customer satisfaction is a key business metric for utilities, and should be tracked
- Efficiency boosts as a result of happier customers can make it easier to get budget for new customer service technologies
Pretty staggering – especially since economists have tended to view utilities customer service as a discretionary money-pit. Turns out, it’s way more essential than that.
3 Common Objections to Investing in Utilities Customer Service – and Why They’re Wrong
Getting buy-in for better tech, process improvements, or extra staffing can be tough. Here are the three objections we hear most – and why they don’t hold up for utilities.
“We should spend more money on the actual service”
Treating customer service as a secondary budget line is a false economy. Research from the Qualtrics XM Institute found that bad service puts $3.7 trillion of business revenue at risk globally. Even in utilities, where customers can’t easily switch, we’ve seen that just one poor experience often leads people to reduce spending, resist upsells, or avoid additional services.
“Can’t we just have self-service for everything instead?”
You could try – but customers will hit problems that machines can’t handle. Klarna went all-in on AI, replacing hundreds of agents, and quickly realized people still want to talk to humans. Self-service is fine for simple tasks, but live service is essential for anything more complex – and ignoring it ends up costing more, not less. Plus, the EU is expected to mandate the right to speak to a human in the next few years.
“We’ve met regulatory minimums – why do more?”
Staying compliant just keeps you out of trouble. The companies that win are the ones whose customers rave about their service. When reviews consistently highlight great support, it lowers churn, softens the blow of price increases, and makes new customers easier to win. So going beyond the minimum is a growth strategy.
Why Should Utilities Invest in Customer Service? Here are 5 reasons.
From sudden bill spikes to extreme weather disruptions, utilities face a unique set of challenges. Investing in utilities customer service isn’t just about answering calls – it’s about keeping operations smooth, customers happy, and your reputation intact.
1. Be ready for contact surges
External factors like regulatory deadlines can trigger massive spikes in customer inquiries. In Germany, OOWV faced a 10-day meter reading window that could have overwhelmed its 30-person call centre. By introducing an automated voicebot, they handled over 15,000 readings without agent involvement, reduced wait times, and freed staff to handle complex cases. Investing in scalable utilities customer service prevents overload and keeps operations running smoothly. Most good customer service software for utilities should include this functionality nowadays.
2. Services are getting more complex
Utility offerings are increasingly intricate. Energy efficiency drives, like heat pump installations or smart home upgrades, mean more equipment in homes and more things that can go wrong. Customers need guidance to navigate new systems and tariffs, and well-trained agents prevent confusion from escalating into complaints.
3. Extreme weather will drive complaints
Climate change is making outages and service disruptions more frequent. When pipes freeze or power goes out, frustrated customers call – often en-masse. Investing in responsive, prepared support teams helps to maintain trust.
4. Bill increases hurt satisfaction
Higher bills frustrate customers – bad service only makes it worse. If your customer service function is easy to reach, simple to navigate, keeps customers updated, and empowers agents to act, you can prevent frustration from escalating. When external pressures hit – like energy crises or sudden price hikes – a strong service foundation stops small annoyances from becoming major complaints.
5. Retaining customers is cheaper than acquiring new ones
Acquiring a new customer can cost five to 25 times more than keeping an existing one. Even a small boost in retention – just 5% – can lift profits by 25% to 95%. Investing in customer service isn’t just about handling issues; it’s about keeping customers satisfied and loyal. When outages, bill hikes, or other external pressures hit, a strong service function makes it easier to hold onto your base – instead of constantly chasing new customers.
Why babelforce is the right platform for utilities
Customer service isn’t optional for utilities – it is a core driver of trust, efficiency, and long-term performance. The data shows that higher satisfaction reduces operating costs, improves retention, and makes organisations more resilient when external pressures hit.
The problem is that many utilities are still tied to legacy systems. These platforms are rigid, slow to adapt, and often disconnected from the tools that customers now expect. That gap makes it difficult to respond quickly or deliver joined-up service.
babelforce offers a different approach. Our CCaaS platform for utilities is built to combine automation and live service in one flexible layer. It allows providers to:
– Automate routine calls at scale, from meter readings to payment updates.
– Absorb sudden contact surges during regulation changes, outages, or price cap events.
– Unify fragmented systems so agents have the context they need.
– Build compliance and transparency into every workflow.
Utilities already using babelforce – such as Stadtwerke Hamm, OOWV, and EnBW – have reduced handling times, saved hundreds of thousands in costs, and improved customer satisfaction. Their results show what is possible when service teams have the right tools.
In a sector where trust defines the customer relationship, the ability to deliver fast, reliable, and human service is what sets leaders apart. babelforce makes that possible.
