BRITISH GAS AND ITS CUSTOMERS – HOW NOT TO RUN RELATIONSHIPS

It’s little wonder that Ofgem, the energy industry regulator is launching a formal investigation into Britain’s energy supply market. News of the inquiry comes hard on the heels of Centrica, the owners of the increasingly infamous British Gas, reporting record annual profits of £1.9billion just a month after the nation’s biggest utility hiked its prices by 15% - representing a five fold increase in profits for British Gas to £571million. The company may have the backing of the CBI’s apologist director general Richard Lambert ( well they would wouldn’t they) but the reality is that an increasing number of their customers are living in ‘fuel poverty’ and it’s little wonder that 70 MPs have signed an early day motion claiming that the utility market is not competitive enough and is dominated by six suppliers - the biggest of which is of course good old British Gas.

For its part British Gas has warned that its 16 million customers would continue to face higher bills for energy for the foreseeable future. In most marketplaces customers would just turn their backs on the company that treated them in this shoddy manner and go elsewhere – but as the MPs have cleverly spotted the other utility providers have also hiked their prices – and it’s quite disturbing, not to say disconcertingly suspicious, to see how similar some of their tariffs are.

So British Gas customers are between a rock and a hard place - and why should the company really care about the way it treats its customers? Anybody tuning into BBC television this week would have seen the story about the guy who had his home broken into by British Gas while he was on holiday so they could fit a new meter - and he wasn’t even a British Gas customer! They then went on to tell the Watchdog programme that he had been paid £200 compensation for this outrage and had cashed the cheque - when in fact the cheque was still in his possession and un-cashed because in his view it was not enough and he was asking for a lot more. You couldn’t make it up really.

This company’s apparent disdain for its customer base is something I believe will come home to haunt it in the long run. It will be interesting to see what Ofgem comes up with in their inquiry into the utility sector - one that consistently comes at or near the bottom of the league tables when it comes to how happy customers are.

If I was running a competitor to British Gas I would do two very simple things - make my pricing competitive, and treat my customers with a bit of respect.

SUB-PRIME MADNESS LEADING US INTO RECESSION – BUT DOES IT HAVE TO BE THIS WAY?

When the world’s largest and one of the most ‘respected’ banks says it has lost at least $18bn through its involvement in the sub-prime US mortgage fiasco then shockwaves can be expected.

That’s exactly what has happened with Citigroup in the US as it revealed its exposure to greed and stupidity - and plunging stock markets around the world are a symptom of the illness. Yes when the US sneezes everybody else gets a cold - or maybe in this case a dose of influenza.

Plenty of doom and gloom about - but while stock markets yoyo up and down largely on ‘sentiment’ are we as a nation in danger of talking ourselves into a recession before it happens - thereby causing one. Vicious circles come to mind.

Surely it is the responsibility of business, banks and government to help avoid the recession by talking the economy up and taking effective measures - such as reducing interest rates and minimising price rises for energy and food and other essentials to prevent a knee-jerk reaction.

Here in the UK we are on the brink - things could go one way or the other. The US is much farther down the recessionary path than on this side of the Atlantic. What’s needed now is for organisations - and their customers - to avoid panicking and put up the ‘business as usual’ signs as much as possible.

And the organisations who concentrate on excellent customer service as well as offering value for money will be in the best position to ride out the rough times ahead and be in the best place for the upturn - probably around mid 2009.

So we’ve got the biggest house price falls since the 1990’s, business confidence the lowest for six years, business failure the highest for six years, sub-prime fuelled dearer mortgages (despite a fall in interest rates), spiralling energy prices, rocketing food prices. I could go on.

But without wishing to come over all ‘Life of Brian’ there is plenty to be optimistic about. Our economy has been one of the strongest in the world for a decade now and many of the long term indicators are still positive. So let’s not talk ourselves into a repeat of the last recession. Time to tighten the belts and remain calm.