Smaller energy suppliers have several advantages over their larger counterparts with the biggest being increased flexibility in providing better customer service and cheaper energy tariffs.
Not being so cumbersome as their larger rivals and the adoption and use of technology such as Dyball's Customer Relationship Management software, they can react to customer needs quickly and effectively and reduce energy billing issues. Often, smaller suppliers offer cheaper tariffs that undercut the larger suppliers and snap up customers searching for the best energy deals.
"Growth for non-large suppliers has been driven by several factors, including the acquisitions of customers from exiting suppliers such as Yu Group which acquired around 4,000 business meters off of Bristol Energy in August, competitively priced propositions or engagement with the TPI channels," said Molly Lloyd, Analyst at Cornwall Insight.
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Acquisitions and mergers have been the biggest form of energy supplier growth
The growing success of the smaller energy suppliers led to Ofgem changing the way it classifies suppliers. Gone are the days of the 'Big Six' where just six companies dominated the energy supply market.
As such, Ofgem has relabelled energy suppliers in its industry data and have ditched the term 'Big Six' replacing it with the more encompassing 'Large'. New market entrants are now classed as small or medium.
2020 also showed that more consumers were switching from larger suppliers to smaller ones in record numbers.
Data released in October showed that the number of switches from the Big Six to challenger companies climbed 0.2% year-on-year to 209,000 and made up 34% of the total number of completed switches.
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