Fear prevents customers from leaving big six energy suppliers
Fear and a lack of trust are preventing many customers of the Big Six energy suppliers from switching to a smaller supplier, according to new research from uSwitch.
The figures show that just 56% of people who are currently customers of the Big Six – British Gas, EDF, E.ON, npower, ScottishPower and SSE – would make the move to a smaller supplier, despite many of the best energy deals often being outside the sphere of the major providers.
Concerns over the ability of smaller suppliers to provide consistent and reliable service appear to be the main barrier for customers, with 31% of consumers saying they are held back by worries that smaller companies could go out of business.
Furthermore, 25% would be afraid of having their gas or electricity supply cut off if something were to go awry, while 21% would be unwilling to trust an energy supplier that they had not previously heard of.
Better the devil you know
Familiarity seems to be the main reason for sticking with the major suppliers, with 14% of consumers saying they would remain with their existing Big Six provider because it is a case of ‘better the devil you know’, while 11% think that there is no difference between any energy supplier, regardless of their market share.
This market dominance may be another reason why people are unwilling to make the switch, as smaller suppliers’ inability to compete with the Big Six in the marketing stakes means it is difficult to promote what are often the best deals on the market; so much so that 17% of Big Six customers do not think they would get a better deal with smaller providers, even if they switched.
There is light at the end of the tunnel, however, with many customers saying they would consider switching if their fears were allayed.
If they could be guaranteed a better deal, 75% of customers would leave a Big Six supplier for a smaller one, while 32% would be willing to make the move to benefit from improved customer service.
Furthermore, 27% would switch supplier in order to benefit from greater clarity in their energy bills, and 21% would make the move to pick up an incentive such as Nectar points.
Though concerns about smaller suppliers going bust appear to be prominent among current Big Six customers, any consumer affected by such an occurrence would be protected by the regulator Ofgem and transferred to another supplier, noted Ann Robinson, Director of Consumer Policy at uSwitch.
She explained that nothing should hold customers back from seeking out the best deal and benefiting from lower energy bills, with smaller suppliers offering competitive prices and a “genuine alternative” to the major companies.
“Price hikes, rocketing profits and fines for mis-selling have left consumers feeling disenchanted and fed-up with Britain’s Big Six suppliers. But instead of small suppliers and new entrants mopping up, they have their work cut out for them because they are yet to convince consumers that they really are a safe bet,” Ms Robinson explained.
“Consumers like what smaller suppliers have to offer, but fears about size and security are holding them back. Many of these fears are completely unfounded and could easily be laid to rest with the right education and reassurance; this would open up the market, help competition and give consumers far more choice.”
With so many options on the market, millions of consumers now have the opportunity to make the move without fear of it turning out to be a bad decision, she elaborated.
“Consumers cannot continue to be allowed to turn a blind eye to smaller suppliers because of unfounded fear factors – they should really be benefiting from the fact that there are now more options available to them,” Ms Robinson concluded.