Utility Week

28 | 27TH MARCH - 2ND APRIL 2020 | UTILITY WEEK Customers Analysis focus on the level of customer service provided by a sup- plier than their tariff rates. It should also allow custom- ers to set their own preferences, for example, 'only larger suppliers' or 'only green tariffs'. The customer has to have control." Garry Hamilton, a director of digital agency Equator, says there are real challenges in establishing a sus- tainable model for autoswitching that works for both consumers and suppliers. "Low margin tariffs require longer-term customer loyalty in order to afford the initial acquisition commissions. Suppliers bank on consumers buying add-on products or installing new technology. But it is difficult to see how a platform's promise of the lowest prices for consumers and a valuable channel to market for suppliers can stack up with a model predi- cated on agitating annual churn. "If the only way to build valuable relationship with consumers is reduced to simply bidding a low price each year, suppliers will continue to see issues around unsus- tainable pricing, poor customer satisfaction and lack of real innovation in the sector," Hamilton adds. His warning appears to ring all too true a„er con- cerns about autoswitching services were thrust under the spotlight following publication of a damning report by consumer group Citizens Advice, amid long-running concerns about a lack of regulation of TIPs in the energy retail market. The report Stuck in the Middle warns that energy autoswitcher customers are not always getting the best deals, a„er the consumer group found that some ser- vices compare fewer than 15 out of around 70 possible energy suppliers, despite claiming to cover most of the market. As a result, some customers are paying £70 a year more than if they'd found a good deal and switched themselves. Some autoswitchers were also providing inaccurate or unclear information, making it difficult for consumers to make informed choices about using the service. Citizens Advice highlighted cases of autoswitchers failing to cancel a switch, leaving customers stuck with a supplier they were unhappy with or facing exit fees. It also flagged up bill-splitting companies failing to pass on communications from suppliers, leaving people in unex- pected debt and consumers in vulnerable situations los- ing some of the services they rely on as a result of being switched without warning. continued from previous page "it is difficult to see how a platform's promise of the lowest prices for consumers and a valuable channel to market for suppliers can stack up with a model predicated on agitating annual churn." Garry Hamilton, director, Equator "Autoswitching is absolutely not about driving a race to the bottom. It should be about wanting to move customers to a better deal, but one that is great value, not just 'the cheapest'." Michael Gutteridge, managing director, Flipper The charity wants the government to use the upcom- ing Energy White Paper to make sure consumer protec- tions for the energy market are brought in line with other markets like insurance, overseen by Ofgem, which Citizens Advice believes would ensure a good balance between consumer protections and ongoing innovation. This would mean people could resolve complaints via an ombudsman, oblige firms to treat their customers fairly and offer more protections to vulnerable customers. Gutteridge says he hopes the findings of the report will lead to autoswitchers needing to provide greater transparency on the service they offer. Flipper manages the list of "live" suppliers it switches to based on their customer service performance tracked using the com- pany's own internal data plus information from Ofgem, Which? Trustpilot and Citizens Advice. "We can do this as we don't take any commission from any supplier." Ofgem says it welcomes any government proposals to increase regulators' powers to enforce consumer pro- tection law, which would deter poor behaviour by com- panies in the retail energy market, including TPIs such as autoswitchers. "We want to see all companies in the retail energy market work hard to ensure they are meet- ing customers' needs. We want consumers to be confi- dent in engaging in the energy market no matter which platforms they use to do so," says a spokesperson. Industry body Energy UK says it welcomes services that help consumers find a better deal and engage in the energy market. Dan Alchin, deputy director (retail), says: "Energy UK services, like autoswitching, are being used by customers to make important choices and are increas- ingly making decisions on behalf of consumers. This is a responsibility that warrants regulation by Ofgem to ensure customers, especially those in vulnerable circum- stances, are protected and have appropriate recourse." In anticipation of any regulatory changes, consolida- tion of the autoswitching market looks inevitable. Look A„er My Bills, which appeared on the BBC programme Dragon's Den in August 2018, was snapped up in July last year by GoCompare parent GoCo Group in a deal worth £12.5 million. Meanwhile, for autoswitching to have a significant and meaningful impact on the market, services need to evolve to provide long-term valuable relationships between customers and suppliers. "It is only when auto switching starts to provide long-term sustainable volumes to energy suppliers that it will become a really important customer acquisition channel," says price comparison website energyhelpline co-founder Mark Todd. "Markets only develop through innovation, and it is the suppliers who embrace innovation and adapt in concert with market changes who will grow and win." Rachel Willcox is a freelance journalist A session on transforming the consumer switching experience will take place at Utility Week Live in Birmingham now taking place on November 10-11. For more information, go to: www.utilityweeklive.co.uk

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