Do or die – technological disruption in utilities
28th February 2018 | Water
Recent reports that price comparison sites will son offer “auto-switching” promise a new era of reduced energy bills for consumers. With sophisticated computers automatically swapping customers onto the cheapest tariffs, the hassle of searching for the best deal will soon be a thing of the past.
James Daley, director at consumer campaign group, Fairer Finance, was quoted in The Telegraph, saying price comparison sites would need to adopt auto-switching “or die”, due to “pressure on all fronts”. But with consumers being moved automatically to the cheapest energy tariffs, the key question now is – how can utilities firms compete? Industry deregulation, flat baseline pricing and advances in digital technology are all combining to turn the industry on its head, empowering customers and disrupting long-established business models.
Following the deregulation of the UK gas and electricity markets in 1996 and 1998 respectively, the UK water industry finally followed suit in April 2017. Doing so has significantly increased competition amongst providers and choice for consumers. Your water supplier is no longer dictated solely by geographical location: a customer in Cornwall can choose Scottish Water if they wish.
According to Ofgem, more than 7.7 million people in the UK switched energy supplier in 2016, a 28 per cent increase over 2015, which was itself a record year. Where once price and location were the sole determining factors for choosing energy and water suppliers, today’s customers have more choice and more information. Price comparison websites make it far easier for customer to identify the most competitive tariffs, and the emergence of auto-switching services promises to solve this problem completely.
Increased competition is forcing providers to up their game across the board to win new customers and retain existing ones. With pricing largely flat across most suppliers, brand values and overall customer experience are now much more significant factors in purchasing decisions. A commitment to customer experience will become the driving force behind customer switching and retention in the utilities industry. Getting it right is more important than ever before.
More information available on the website below