Utility Week

UTILITY Week 25th November 2016

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Page 26 of 31

UTILITY WEEK | 25TH NOVEMBER - 1ST DECEMBER 2016 | 27 Customers Market view A nyone in the business of selling con- sumer goods and services will know that the customer is a curious animal given to whims and contrariness. Even when they are offered the opportunity to save money, some customers will walk away. Take switching energy suppliers, for example. There is a total of around £1.4 bil- lion in savings to be had and Uswitch claims bill-payers could each save up to £679 annu- ally by switching their suppliers. But only around 5 per cent of consumers actually do switch every year. In addition, 45 per cent of people do not recall ever having switched energy suppliers and more than half remain on the standard tariff when they could save money by switching. We can take a stab as to what are some of the things putting customers off. Many people distrust energy suppliers and believe there is little to differentiate them; given the potential (perceived or real) difficulties involved with switching, they believe it is better to stick with the devil you know. In addition, switching may seem daunt- ing, even with the plethora of comparison websites and we have probably all heard the horror stories – or experienced them our- selves. For example, having switched sup- plier, we start getting bills from both the old and the new provider. Complicated tariffs are another stumbling block. And, of course, there is simple apathy. But is there more going on in the consum- er's mind than this? Whatever the apparent reasons discouraging people from switching, we wanted to establish what actually hap- pened during the switching process. We have developed a process using scien- tific techniques to identify the moments that stop people buying – we call these moments "tripping points". The process uses psychol- ogy, physiology and neuroscience to meas- ure levels of stress when the tripping points occur. The resulting data (the Tripping Point Index) provides an objective measure of how much stress an average customer experi- ences at each tripping point. We formulated a Tripping Point Index specifically for energy supplier switching and put a group of participants – real cus- tomers – through the switching process, monitoring them as they did so. The results revealed some compelling insights, most notably that participants reached their peak level of stress during the initial research phase using comparison web- sites, and principally when they were asked how much they currently pay for energy. The results indicated that almost all of the participants would have abandoned the process at this peak stress point. A tripping point, indicated by the peak of levels of stress that we saw in this experiment, is very common in all customer journeys and, in some cases, is just too great for the majority of consumers to overcome. Clearly, people do not like thinking about their energy expendi- ture – whether it is the actual amount, hav- ing to find energy bills, or just providing personal information. The stress it causes is enough to make consumers quit the process, regardless of the potential savings to be had. For the purposes of the research our par- ticipants were tasked with continuing the process to at least the point at which they were offered a saving, and potentially on to actually switching their energy supplier. The research showed that once par- ticipants got beyond this primary tripping point, their stress levels returned to normal and most found the process of switching energy supplier simple. Nearly 50 per cent of participants then chose to switch their energy suppliers. So, if one of the main obstacles to switch- ing occurs at the earliest stage of the pro- cess, some major changes must be made to the research process if customers are to be encouraged to switch energy supplier. The responsibility of the customer to provide details of their energy spend should be alle- viated. This should be possible. Aer all, it works in other sectors: when switching bank accounts or some broadband suppliers, for example, all you need is your account infor- mation and the rest is done for you. Perhaps if energy suppliers were com- pelled to supply details of expenditure when a customer was considering switching, it would give them the opportunity to compete to retain their customer's business, for exam- ple by offering additional services as well as tariff reductions. Maybe, like our house or car insurance, we should all automatically receive a trigger, an annual renewal notice, that allows us to compare our costs to other providers? The industry needs to collaborate to remove this major obstacle if it is genuinely serious about encouraging competition. If this helps to drive prices down, clearly the consumer benefits, but it will also encourage energy suppliers to demonstrate why and how they are different, that it is not necessar- ily all about price. Aer all, it does not matter how good an energy supplier is, how great their customer service, if customers never get to experience it because they cannot get past the first step in the switching process. Tim Routledge, chief experience officer, Experience Insight Is switching too stressful? Major changes are needed to the switching process to encourage more consumers to shop around, argues Tim Routledge, because many would-be switchers never get past the first hurdle. NUMBER OF CHANGE OF SUPPLY EVENTS Source: Electralink 700,000 600,000 500,000 300,000 200,000 100,000 0 Jun 12 Dec 12 Jun 13 Jun 14 Jun 16 Jun 15 Dec 13 Dec 14 Dec 15 Oct 16

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