6 Reasons Why Consumers Switch Energy Suppliers

Increased competition has meant that consumers have never had it so good in terms of choice. Improved technology and processes now mean that a person can switch their energy supplier incredibly quickly and easily. This poses a great challenge for both new market entrants and well-established energy suppliers and it all comes down to who adds the most value and how they do it.

Consumers often look to switch their energy supplier in order to save money and many challenger suppliers have cottoned onto the fact that by providing cheap tariffs they can build up a customer base.

Unfortunately, those energy suppliers offering exceptionally low tariffs soon find themselves in difficulty. It’s all well and good attracting customers, but if you don’t have the infrastructure in place to adequately serve their needs they’ll soon look elsewhere.

Cheaper prices great, but only if they’re sustainable for the company. Any customers you gain from undercutting the competition will then need to be retained via more than just cheap price points.

According to Which? UK consumers have never had it so good when it comes to cheap energy deals, with 78 tariffs now costing under £1000 a year.

The introduction of the energy price cap last year has been a key driver for this surge in cheaper offerings.

Energy suppliers can retain their customers by keeping them in the loop and continuingly providing cheap tariffs. With the wholesale cost of gas and electricity continuing to fall this should remain an option.

“The number of cheap deals on the market has shot up in recent months, but customers stuck on standard variable or default tariffs may not realise they are paying hundreds more than they need to, despite the price cap. Customers fed up with expensive bills should consider shopping around to secure one of the many cheaper deals available – you could potentially save hundreds of pounds a year and find a supplier that offers better customer service,” said Natalie Hitchins, head of home products and services at Which.

The increase in the number of cheaper tariffs has sparked fierce competition in the marketplace and to stand out from the crowd and retain their customers, energy companies need to do more than just offer cheap energy.

Most new businesses invest a lot of money into attracting new customers but often fail to keep up that rate of spending when it comes to retaining them. This is especially prevalent in the energy industry.

With the increased competition in the sector, a business cannot skimp on its efforts to try and keep the customers they do have. Also, it’s a lot cheaper to retain a customer than attracting new ones via marketing campaigns and the like.

Consistently we see challenger brands like Octopus energy topping the leader boards for their customer service often knocking the larger suppliers to the bottom of the rankings.

Not only is this excellent free advertising that will undoubtedly attract new customers, but it also gives current customers the incentive to stay put. After all, why would you go elsewhere when you’re already receiving excellent customer service?

Fast response times to customer queries, efficient billing and reporting, friendly staff that go out of their way to help, all combine to make excellent customer service.

With environmentalism being the ‘in’ thing at the moment it’s only natural that some customers may on the lookout for tariffs and services that will make them feel as though they’re doing their bit in saving the planet.

Energy suppliers can retain and attract customers by offering ‘green tariffs’ that only use energy sourced from renewables such as wind or solar power.

Last year Compare The Market released a report that looked into the green tariffs available on the market. Out of the then 54 tariffs on offer just 6 were entirely green, with all the energy coming from renewables.

An energy supplier that can clearly demonstrate that their green tariffs are legit will have an advantage over the competition when it comes to retaining their environment loving customers.

Switching energy supplier has never been easier which means that efforts to retain customers has never been so important. 2019 was a record-breaking year for switching with nearly 6.4 million recorded.

This is great for consumers and it puts extra incentive on suppliers to up their game to provide better services.

Read more – 2019 broke records for energy supply switching

With the rise in competition, many energy firms are now offering gifts and financial rewards to entice customers to join them.

Referral schemes that reward new and current customers alike have grown in popularity.

Companies such as Bulb offer such programmes and the tactic seems to be working with the company gaining thousands of new customers in a few years.

Other companies are catching on and offering similar schemes such as offering vouchers for online retailers, cheaper cinema tickets, gym memberships or even providing discounts on the weekly food shop.

Gaining a good reputation is invaluable to all businesses and nothing is as effective as good old word of mouth.

You can spend a fortune on adverts and other promotional tools, but they will never beat out recommendations from friends and family.

To gain and retain customers you need to ensure that their experience is a positive one, positive enough to ensure that they will spread the word. A bad reputation can be hugely damaging to a business and shirking such a reputation can be very hard to achieve.

Read our tips on how to keep energy customers for life.

Dyball Associates are proud to help new supply businesses successfully launch in the UK market. Through our energy market consultancy services and the software we’ve developed, we’re supporting new UK electricity and gas suppliers to get set up and start supplying.

Our bespoke solutions enable us to guarantee complianc e with the relevant energy market regulators to new entrants and help existing suppliers scale their business by improving service levels.

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