Customer satisfaction (PR5)

1) The segmentation of measurements for Corporate and Industrial customers (both SME and Large) has been changed since 2007. Comparable data is therefore not available

Customer satisfaction issues have gained increased attention during the last couple of years and will continue to have high priority in the future. In 2004 Vattenfall adopted a set of customer satisfaction requirements and targets to measure its performance in fulfilling the strategic ambition to be Number One for the Customer.

Targeting and measuring customer satisfaction

In 2007 Vattenfall adopted five target areas, one for each of its strategic ambitions. The target for the strategic ambition to be Number One for the Customer is based on Vattenfall’s Customer Satisfaction Index (CSI) for its retail customers. The target is broken down into individual targets for the Business Groups: Nordic (Sweden, Finland) and Central Europe (Germany and Poland), as well as for all the Group’s sales, distribution and heat business units.

The Business Groups draw up business plans, which describe how the customer satisfaction targets will be reached. The targets are followed up in the same manner as financial targets.

Targets are set in comparison with leading service companies (mainly the major power, telecom and insurance companies) in Europe and are communicated in the business planning directives that are issued to the organisation once a year. The long-term target is that customer satisfaction, as measured by Vattenfall’s Customer Satisfaction Index (CSI), should be in the top tier among the leading competitors in each market. Customer satisfaction should also be on the same level as leading actors in similar industries, such as telecom. This implies a long-term CSI target above 70 for retail customers and above 65 for corporate & industrial customers.

Formal instructions are issued that direct the way in which CSI measurements are carried out, such as what questions are to be asked, scales for the answers, the statistical analysis method to be used, sample sizes, reporting format and survey timing. This ensures that figures are comparable to the European Performance Satisfaction Index (EPSI).

As of 2008, Vattenfall’s CSI process has been more centralised in order to improve the quality and comparability of measurements. The objectives are to enable transparent internal and external benchmarking, to use CSI as a strategic tool, and to use links with other stakeholder measurements in the future. During the year a Group-wide CSI process co-ordinated at the Group level was developed, including common customer segmentation for CSI purposes, questionnaires, sampling methodology, survey approach, analysis model, and reporting and presentation structures. This new Group-wide CSI process was used for the first time in the 2008 CSI measurements covering the retail, SME and some B2B large customer segments in all markets. In 2009 the Group-wide CSI process will be optimised and the scope will be extended to cover also the reseller and MEGA segments.

In 2008, Vattenfall’s customer satisfaction index (CSI) for the Group as a whole was 64, which is a stable result compared to last year. However, the trends varied significantly between Vattenfall’s markets. In the Nordic region, there was a strong positive development of the CSI results compared with last year. The Swedish results, in particular, were substantially stronger for most of the segments compared with 2007. The results indicate an increase of trust for the industry as a whole in the Swedish market. On the other hand, Vattenfall’s CSI scores in Germany showed a sharp decline for retail and SME customers due to a combination of poorly managed price increases and a tarnished image caused by problems with the nuclear power operations. However, results from additional measurements during the autum showed that the negative trend has been reversed and that CSI scores are slowly improving. In Poland, Vattenfall’s CSI scores remained at a steady high level, particularly for retail customers.

Image and price have a very large impact on customer satisfaction scores, and a tarnished company image or an increase in prices leads to lower customer satisfaction scores in all markets and vice versa.

Trends in customer satisfaction

As markets develop, the same trends for customer satisfaction scores can be seen in all three geographic areas:

• fairly high levels of satisfaction in regulated or recently deregulated markets (Poland),
• then a drop in ratings when the competition increases, price pressure intensifies and supplier switching increases (Germany),
• and after that a gradual pick-up and gain of new customers as a result of hard work and price strategies (Sweden).

Actions to improve customer satisfaction

In 2008 Vattenfall took a variety of actions in all its geographical areas to maintain and increase customer satisfaction, mainly on the operational level:

• Investments in more weather-secure air cables in Finland and Sweden have resulted in significantly lower interruption rates.
• Work to ensure security of supply in Germany is contributing to continuous high satisfaction scores.
• Installation of automatic meter reading for all of Vattenfall’s distribution customers in Finland was completed at year-end 2007, and by the end of 2008 more than 99% of distribution customers in Sweden had automatic meter reading. This will improve billing and service.
• In Finland and Sweden, new billing systems have been implemented with the aim to improve the efficiency of customer contacts. In Germany, work on development of a new billing system is in progress.
• Reorganisation of the contact centres in Finland, Sweden and Poland has been completed, resulting in improved customer service as well as the continuous improvements in service centre staff training. A positive effect could be seen in Sweden, where retail customers gave higher scores for customer service in 2008.
• In Germany, the Vattenfall Centers were relaunched, and a Customer Board was introduced.
• In Finland, an instant messaging service has been introduced for customers facing an outage. In Sweden, where instant messaging service already exists, an improved interactive voice response for customer with power interruption has been implemented.
• Since January 2008 Finnish distribution customers are also compensated if an outage exceeds 6 hours.
• A lot of effort has been put into providing customers in the Nordic region, Germany and Poland with information and advice on energy efficiency.
• Originally launched in 2007, the “Restore public trust” campaign was continued in response to a decline in public confidence in Germany.
• A set of new products was launched in Sweden at the end of 2007 to increase Vattenfall’s competitiveness in the residential segment, and in Finland the pricing strategy and structure were adapted to ensure more competitive price levels.
• In Poland Vattenfall is taking the lead in the deregulated market when it comes to simplifying processes and developing new products, such as electricity with a price guarantee and an online product. Vattenfall has been frequently cited in the media as an expert on the liberalisation process of the energy market.