• ScottishPower aims to be number one for customer satisfaction in the UK. In 2008, we aim to achieve:
• A 10% improvement in customer feedback*
• A further 20% reduction in escalated complaints to energywatch and the ombudsman
• To meet quality of supply targets set by Ofgem
  

*The 10% customer feedback is measured through Voice of the Customer research against the question: "Did you feel more positive / no difference / negative after an enquiry with ScottishPower".

Customer Service Satisfaction

uSwitch

We were ranked top in the UK for both online services and meter reading in an independent survey of UK energy suppliers conducted for consumer organisation uSwitch in October 2007. In the same survey, we were ranked second for offering customers the best available deal and on offering value for money. Around 67% of customers said they were ‘satisfied’ or ‘very satisfied’ with the overall service ScottishPower provides, an increase of around 8% compared to the equivalent uSwitch survey in 2006. 7,787 UK energy customers took part in the survey.

Energy Retail Customer Complaints

Customer complaints referred to consumer watchdog energywatch dropped by 61% over the year and direct complaints to ScottishPower reduced by 40%

• Direct Selling complaints per 1,000 transfer dropped from 0.02 (2006) to 0.0150 (2007)
• Transfer complaints per 1,000 transfers reduced significantly from 0.62 (2006) to 0.14 (2007)
• Account and Billing complaints per 1,000 customers reduced significantly from 0.053 (2006) to 0.019 (2007)

The year on year comparisons are taken over the period from October to December

We are continuing to work hard to reduce complaints and improve performance. Steps taken include:

• Improving the feedback given to customer service agents by utilising call recording capability for coaching
• Making changes to the way we handle complaints to achieve speedier resolution for customers
• Improving the way we handle disputed accounts 
• Establishing the root causes of problems and working out solutions, such as changes to our systems, through 6 Sigma, a technique widely used in industry to eliminate defects
• Using analysis tools to identify customers who have complained and had poor service and proactively contacting them to put things right
• Listening to customers through our Voice of the Customer research programme and acting on what they tell us
• Harnessing new call routing technology to connect customers to an appropriate agent quickly
• Enhancing our employees’ customer service skills through training – including an increased induction period for new customer service staff from five weeks to 13 weeks
• Continuing to invest heavily in our prepayment service through new systems and modern key meters

For information on our Supply Guaranteed Standards of Performance, visit Ofgem's website

6 Sigma Award

A Six Sigma project to achieve customer resolution first time in four out of five inbound calls won an award in the European Six Sigma Excellence Awards 2007.

J.D. Power and Associates

We were ranked fourth for gas and fifth for electricity in a very tightly packed field in the J.D. Power and Associates 2007 survey of UK energy suppliers. We remain committed to our ongoing Customer Complaints improvement programme as a means of improving this ranking going forward.

Voice of the Customer

To provide the best customer experience we can, we need to find out how our customers rate our performance. We conduct Voice of the Customer (VoC) surveys regularly and use the results to drive improvements in our business.

The research involves interviews with up to 1,500 customers per survey and measures satisfaction in 26 areas that customers have told us are critical to the quality of their relationship with ScottishPower. These areas include reliability of supply, meter reading, enquiries, complaints, billing, sales and registration, value for money and our reputation in the market.

Twenty five of these areas also form part of the 70 weighted service attributes we measure, ranging from bill accuracy to providing confidence in the outcome of enquiries and complaints.

Of the areas and weighted attributes, 36 have remained steady over the last year, 29 have declined and five have shown improvement.

We believe that a slight drop in satisfaction levels can be attributed to industry wide issues, such as pricing as, over the same period, we have seen a significant drop in customer complaints. Provisional results for January 2008 data suggests that satisfaction levels have recovered to 2006 levels.

Voice of the customer surveys provide us with regular snapshots of customer opinion and help us realign aspects of the service we provide with what our customers want.

For example, the customer bill is a key touchpoint with our customers – we send out approximately 17.5 million bills every year. If it is inaccurate, or the information is not presented clearly, this can result in many thousands of inbound calls to our customer service centres, creating queues and resulting in frustration.

Projects to improve billing accuracy and presentation have been carried out by the business in direct response to what customers have told us in the VoC surveys.

Customer Experience Programme

Our long term aim is to be the number one energy company for customer satisfaction. A Customer Experience programme has been running in Energy Retail since September 2006. Its key principles include:

• Putting the customer at the heart of our business – using Voice of the Customer research to ensure we develop processes that match customer expectations
• Developing a customer focused culture, ensuring that the customer is "present" in decision making forums
• Developing specific metrics to monitor the performance of customer critical processes
• Aligning departments to ensure that customer enquiries and complaints are addressed quickly and effectively
• Measuring and setting targets based on customer feedback results

Various projects were launched during the year with the aim of providing a better, more efficient service to our customers. These include changes to our bill, making it clearer, and changes to a number of processes, including the way we manage changes of tenancy.

EnergyNetworks Performance

The two main measures of network performance are Customer Minutes Lost and Customer Interruptions.

The performance masks the investment EnergyNetworks have made to significantly increase automatic switching points on the 11,000 volt network, reducing the length of time customers are left without power when a fault occurs. There has also been a rollout of over 1,000 satellite navigation and vehicle tracking devices to frontline operational staff, to ensure they are equipped to respond to faults quickly.

Customer Minutes Lost

Customer Interruptions

Complaints to the independent consumer watchdog energywatch relating to our EnergyNetworks business dropped to 67 during calendar year 2007, following a spike for the period from April 2006 to March 2007 of 125, which was caused mainly by severe winter storms.

The Network Reliability Improvement Programme (NRIP) selects particularly badly performing circuits and implements a refurbishment scheme to renew the circuit and modernise its operations. During 2007, investments were made in over 2,000 km of overhead line.

The Network Controllable Points (NCP) project similarly selects circuits and puts an intelligent automatic re-closure scheme in place, along with controllable switching points on the circuit feeding local communities. When a fault occurs, either due to bad weather or equipment failure, the number of customers disconnected from supply is minimised, in most cases at least halved. Our operations staff know immediately exactly which area is affected, resulting in a quicker response to repair the fault. Additionally our control centres in Birkenhead and Kirkintilloch can now operate remote switching of equipment in rural areas, reducing the time taken to restore power.

For information on our Network Guaranteed Standards of Performance, visit Ofgem’s website

Energy Efficiency

During 2007 we became the first UK supplier to meet our target energy savings under the Energy Efficiency Commitment (EEC2) a year early. A significant proportion of the energy efficiency measures we installed in the second year of EEC2 was in the homes of Priority Group customers, including the elderly and those on low incomes.

We plan to carry over all work from the final year of EEC2 (which ends 31 March 2008) into the new Carbon Emissions Reduction Target Scheme.

During the last year we have:

• Insulated 52,942 cavity walls and 31,663 lofts
• Supplied 13,162 A rated boilers
• Given out more than 2.4 million energy efficient light bulbs

We deliver our energy efficiency projects through partnerships with more than 100 local authorities and housing associations. We continued to fund Warm Zones in Newcastle, Gateshead, Kirklees and North Stafford in England and Community Energy Partnerships in North and South Lanarkshire.

Product Choice

We offer a range of products to suit the different needs and lifestyles of our customers, including a price freeze product, which guarantees no price rises until 2011. We also offer a No Standing Charge option, which can benefit those with low energy use.

We offer a complete online energy service – which has been rated 1st in three consecutive uSwitch surveys – and customers who prefer to receive a bill through the post can still make payments or send us meter readings online.

We continue to offer Capped Price products to customers to give the peace of mind of fixed energy costs. More than one million customers have taken up the assurance of our Capped Price offers.

For our full range of energy products, visit our customer website: www.scottishpower.co.uk

Green Energy

We continue to offer several Green Energy products for domestic and business customers. Green Energy H₂O is linked to our hydro generation and the Green Energy Fund product diverts the £10.50 annual discount given to Dual Fuel customers to the ScottishPower Green Energy Trust, which awards grants to small scale renewable energy projects at community level.

Since the introduction of the Climate Change Levy (CCL) we have supported business customers seeking to reduce their carbon emissions. We are one of the UK leaders in supplying green energy exempt from the CCL, to the public sector and large retail organisations.

During the year the ScottishPower Green Energy Trust committed a further £200,963 in funding towards 16 small scale renewable energy projects, including mini wind turbines, ground source heat pumps and solar panels.

Since its launch, the Trust has granted funding totalling £926,860 to 91 projects.

In 2005 the positive impact of the Green Energy Trust on the environment and local communities was recognised with a Big Tick from Business in the Community. The Big Tick was re-accredited in 2006 and 2007.

For more information on Green Energy Trust projects see the Green Energy case study.

For more information on our Green Energy products, visit our customer website: www.scottishpower.co.uk