The poor customer experience that surrounds buying energy discourages consumers from switching providers or pushing for a better price. In this guest post Ross Sharman, MD of Knowledge Global, examines how digitising key information can improve interactions between energy suppliers, comparison sites and consumers.
When a householder wants to shop around for energy, they have two options. Firstly, they can use one of the comparison sites or they can run their own comparisons against a selection of retailers in the market. The first should be a no-brainer and the second is currently only for those with abundant time and patience.
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However, there are inherent issues with both options, primarily neither choice provides a rich customer experience nor a quick one. In both scenarios, the experience usually involves a call back from either the retailer or comparison provider. This call involves an operator from the call centre asking the consumer to read off/confirm details from their last bill, which they have usually already provided leading to confusion and time wasting. Only then can the offer details be confirmed. This is then followed up with a confirmation email to the customer (and often the consumer will then receive a confirmation offer email). Consumers are time poor especially when it comes to energy bills and the current experience is time consuming, intrusive and ultimately leaves the consumer no wiser or happier about whether they have been offered a truly competitive pricing.
Another failing is that more often than not the price offered to the consumer is not the most competitive. Most comparison sites make their money by factoring in a margin into the newly offered tariff, which is then passed to the consumer indirectly. Comparison sites are also limited in the discounts they can offer. On the other hand, retailers will often quote standard tariffs which are not their most competitive. The consumer can get additional discounting, with some ‘push’ over the phone, if they know what they are looking for.
Retention of customers at all cost can lead to exceptional discounts. Only today I witnessed a counter offer of 48 per cent discount against a consumer’s current tariff, a reaction to discourage the customer leaving to a competitor. Why was the customer not given the most competitive rate from the outset? (another option could have been to keep their customers happy on a competitive rate?).
This further demonstrates the failing of the current buying system, as it plays upon most consumer’s reluctance to regularly shop around and lack of transparency (and ethics) from the larger incumbents (you know who you are).
No more intrusive call backs
A contact-less experience means that all bill information from the consumer’s last bill is transferred quickly and seamlessly to the competing retailer (to price against). This is a completely online transaction whereby a consumer uploads their most recent bill to the retailer’s website and receives a quote and offer within seconds. The consumer is empowered to make their own comparisons against the competition quickly, without any need for intrusive call backs or three to four business day turnarounds.
More competitive pricing
An additional advantage of the contact-less experience is cost savings. The retailer can save anywhere between $50 and $100 per call back per customer, not to mention other back office cost like data entry. This saving can and should be passed onto the consumer. With contact-less energy buying the consumer is empowered and can easily shop around, forcing retailers to make more competitive initial offers to win business. Surely a win-win.
Of course for some retailers won’t like what I’ve written as this model disrupts the status quo (as demonstrated by the 48 per cent discount) – but it’s about time the consumer had a different buying experience with their retailer and with the competitors. Knowledge Global is proudly a champion of contact-less buying of energy.