What is npower's two year recovery plan?

npower owner RWE has today disclosed information on the company's losses across 2015. For npower, this has meant a loss of £99m compared to 2014's profit of £183m.

An Ofgem fine of £26m following customer service failings, as well as decreased customer numbers of 7%, have contributed to the tough 12 months and triggered npower to form a two year recovery plan.

Recovery plan overview

Generally, npower claims their return to profit will in part be achieved by "streamlining activities across the company, eliminating process failures in its customer service and billing systems, and rationalising the number of systems it uses."

The two year plan is split into four areas of focus: lower costs, simplicity, high quality customer service, and being ready for the challenges of the future.

An unfortunate aspect of this, is the widely publicised job cuts of 2,400 members of staff. npower has described this measure as one to achieve extensive cost savings set to return the company to profit, much to the anger of unions.

After the £26m fine from Ofgem in 2015, npower had a lot to answer for on its customer service front, with its reputation for poor customer service not being easy to shake. The loss of staff could be concerning for the Big Six supplier's customers — could service be affected further by jobs losses and outsourcing to external delivery partners?

Additional measures of the plan include:

• reducing some of its energy services activities (excluding supplying domestic and business energy).
• continuing the property consolidation programme started in 2013 to reduce its current 26 sites so that locations are grouped around three regional hubs.
• continuing to invest in digital technology to make it easier for customers to do business with them.

Measures to improve customer service

npower have acknowledged the necessity to improve customer service within their domestic arm, making it a cornerstone of their recovery. They reviewed their billing system last month, and plan to overhaul their home move process. Measures have also been taken to make it easier for advisors to locate and access the information they need to assist customers.

Previous customer service targets agreed with the industry regulator Ofgem in December 2015 are the goal for npower making customer service improvements.

Signs of improvement are already being seen. In 2015, the company halved the rate of domestic complaints received per 100,000 customers, with 50% of this reduction coming in the last quarter alone.

Hopefully for customers, this recovery plan as a whole will form the basis of improved customer experience not just now, but also in the future.

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