UK ‘big six’ energy companies losing customers
The BBC reported today that Britain’s big six energy companies – EDF, E.ON, British Gas, npower, SSE and Scottish Power – are continuing to lose market share to smaller independent suppliers.
Added together, the large suppliers now have 92.4% of the market, down from 99.8% five years ago. Put another way, independent suppliers have increased their share from just 0.2% to 7.6% over the same period. The largest independent, First Utility, has grown ten-fold in just three years, and now has more than 550,000 customers.
The figures compiled by research group Cornwall Energy for the third quarter of 2014 show that customers have 3.8m accounts with the smaller suppliers, and 45.9m with the big six.
In short, the energy and utilities market is more competitive than perhaps ever before. Given that there is little to differentiate between firms on the energy they supply to customers, building competitive advantage comes down to two key areas – price, and customer experience.
Challenged by slim margins and under increasing regulatory and political pressure, it is clear that customer experience is the true business battleground.
McKinsey have found that organisations are able to reduce costs by up to 25% and increase revenues by as much as 35% by using the Voice of the Customer information to guide the structure and KPIs of contact centre operations.
However, the success of a customer experience management programme cannot be measured entirely by feedback scores or operational improvements.
True success is shown by improved financial performance, reduction in complaints, market-beating growth and unique industry measures.
For one Maru/Syngro energy client, one of the key results of the Voice of the Customer programme was a very significant reduction in the number of complaints to the regulator and a significant increase in customer advocacy.
- 100% growth in customer base in 5 years
- 80% drop in customer complaints
- Churn rate 5% lower than market average
- Improved market position from 5th to 2nd
- JD Power Top Supplier for 3 consecutive years
- CEO’s commitment to customer service accelerated customer-centric change.
Complaints to regulator:
Looking ‘beyond the score’ and using customer insight to uncover the areas that matter most to your business allow you to achieve real competitive advantage and quantifiable benefits.
For established utility companies, the pressure is on to match rising customer expectations in an increasingly competitive sector. For challenger utility companies, never before has there been such an opportunity to build market share.