More and more households and businesses are turning to smaller energy suppliers with data released by Cornwall Insight showing that back in 2015 small and medium suppliers held just 12.1% of the market. In the space of just five years, that share has more than doubled to 30.3%.
This growth shows no sign of slowing down as consumers concerned over rising energy bills seek out the best deals.
Data released by Energy UK showed that the number of consumers switching provider hit a record high in 2020 with just under six million recorded. 28% of all recorded switches were from larger to small and medium suppliers.
Smaller suppliers can operate more flexibly allowing them to offer cheaper tariffs and by using technology and innovative software can out-compete the larger suppliers when it comes to offering excellent customer service.
Also read: Smaller Energy Suppliers continued to snap up market share in 2020 shows new report
Challenger energy suppliers like Octopus Energy and Bulb regularly hit the headlines and rarely for the energy sector they’re nearly all positive. Offering ground-breaking customer service, competitions and showcasing their ambitions and technology has garnered them a lot of interest from the media.
The vast majority of negative headlines focus on rising energy bills with the most recent example being the hiking of Ofgem’s price cap.
All of the large suppliers quickly announced that they were raising their prices, with several taking their prices right up to the cap limit.
In comparison, smaller energy suppliers have continued to offer much cheaper tariffs, a move that is sure to see another increase in consumers switching to them when the cap comes into force in April.
Newer energy suppliers have to win all of their customers as soon as they enter the market and the best way to do this is to compete on price.
Despite cheaper tariffs still being the biggest draw for consumers, challenger energy suppliers are also outcompeting their larger rivals when it comes to offering excellent customer service.
Anna Moss, Retail Manager at Cornwall Insight, said: 'Newer brands have to win all their customers from entering the market. One way to do this is to price more competitively, which can reflect a few factors.'
'Challenger suppliers don't face all the same policy costs as larger suppliers, for example, energy company obligation and warm homes discount. Also, newer organisations tend to be more agile.
'With newer, more efficient systems and outsourced services, they might offer tariffs at low or negative margins to build their customer base. However, this would be down to the supplier's business model.'
Also read: Ofgem Hikes Energy Price Cap raising Energy Bills to pre-pandemic levels
The use of software such as that offered by Dyball Associates empowers suppliers to innovate and gives them the ability to understand how their customers behave, keep track of marketing and sales efforts and greater efficiency. The main benefits of such software are:
Dyball offers a range of software and services to help energy suppliers. These include:
Energy Supplier & Energy Billing System
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