- Big Six have lost 8 percent of market to challenger brands in three years
- Good customer service still the key to consumer trust
- Price remains the most important factor when choosing to switch provider
- Green credentials increasingly important for consumers wanting to switch
- 70 percent of 18-34 year olds want energy conservation advice
- Email still customers’ preferred channel of communication
London, 19 May 2021 – A new survey has revealed that the ‘Big Six’ energy providers have lost ground to challenger brands over the past three years, revealing that the market share of the Big Six has reduced by 8 percent (dropping to 60 percent in 2021 from 68 percent in 2018) as new entrants muscle in on the marketplace.
The REaD Group survey, which revisits consumer opinions of their energy providers from 2018, interviewed 2,003 UK consumers aged 18 to 55+ and was conducted by Opinium.
British Gas, E.ON and EDF remain the top three energy providers, but with a reduced share of market since 2018, while SSE and Scottish Power remained stable (9 percent) in fifth position. However those in the “Other” category (any provider that was not one of the 15 providers stated) dropped by 6 percent, while challenger brands Bulb (with 8 percent, up from 1 percent in 2018) and new entrant Octopus (with 7 percent) are hot on the heels of the incumbents and coming in ahead of Ovo Energy. Other new entrants to the marketplace include Arvo, Pure Planet and Orbit.
Once again, previous good service (53 percent) and high quality customer service (52 percent) were runaway leaders when it comes to what makes consumers trust an energy provider, up on 49 percent and 48 percent in 2018.
As to whether those customers trust that their current provider is giving them the best deal, the results are encouraging for energy providers: in 2018, two-fifths (41 percent) said yes, increasing to almost half (49 percent) in 2021. Those who didn’t know has dropped slightly from 26% to 24%, making a quarter of respondents clearly not concerned enough to interrogate their bills in detail or motivated enough to shop around – the so-called ‘Inert Customers’.
Price still remains the biggest driver for consumers looking to switch. More than half of respondents (53 percent) said finding a cheaper offering would make them want to change to a new provider – down from 58 percent in 2018 – followed by choosing tariffs that better suit their needs/usage at 34 percent, unchanged from 2018. Interestingly, green credentials (19 percent) and a more trustworthy provider (17 percent) were the third and fourth most important factors for wanting to change, up from fifth and sixth places in 2018.
On top of that, over half of energy bill payers asked (55 percent) said they would definitely or probably like to hear more from their energy provider, specifically about energy usage and tips on how to conserve energy – with this rising to 70 percent in the 18-34 age group, which aligns with the rising importance given to green credentials by this same demographic. 64 percent want to hear about ways to reduce their bills, while 57 percent want to find out ways to reduce their energy usage.
Smart home technology is making inroads too: of those surveyed, 41 percent said that they currently have smart home technology, compared to only 30 percent in 2018.
For utilities providers seeking the best way to communicate with their customers, email is again the clear winner in 2021 – increasing to 72 percent from 60 percent in 2018 as the most preferred communication channel. Accessing information via a website/web portal (23 percent) has overtaken mail as the second most popular (26 percent).
“Our results indicate that customer service is the most important factor for consumers when it comes to loyalty in 2021 – as it was in 2018,” commented Phil Ward, Utilities Sector Lead, REaD Group. “Loyalty is a rare commodity in the utilities sector, so this is a key point for customer retention. With word of mouth being a powerful influence on consumer choice, you can be sure that bad experience will be talked about and the details shared using the many channels available to consumers.
“When faced with so much choice and switching provider now easier than ever, energy businesses need to differentiate and develop trusted relationships with consumers to attract and retain them as customers. And in an increasingly competitive market, attracting and retaining customers comes down to a mix of price, customer service, transparency and trust.”
Download the full report here: https://readgroup.co.uk/wp-content/uploads/2021/05/REaD-Group-Report-Po….