If 2012 was the year of the small supplier, Co-operative Energy was the surprise arrival.
While the news was dominated by price rises from the ‘big six’, the Co-Op suddenly burst into the scene with a price cut, and currently offer uSwitch’s most popular energy plan.
So what’s going on? We spoke to Nigel Mason, Business Development Manager at Co-Operative Energy.
What are the reasons behind Co-Op’s recent success in the energy market?
When we ask our customers why they switched to Co-operative Energy, they give us three main reasons.
The most important reason is price. We have a policy of maintaining consistently competitive pricing. So although we rarely appear at the very top of the price league tables, we are always there or thereabouts.
Our customers value this consistency; they want to switch to a good energy supplier and not have to worry about constantly shopping around.
The second reason is fairness. This means different things to different people. But most people seem to agree that offering better deals to attract new customers than are available to existing customers is not fair.
Customers want loyalty to be rewarded, not penalised. So we promise to give existing customers at least as good a deal as new customers.
The third reason is simplicity. What you see is what you get: one simple tariff, priced the same whether you are an online or offline customer, and regardless of how you choose to pay.
After all, the underlying commodity is simple and identical from one supplier to the next, so why confuse everyone with hundreds of tariffs?
How does the Co-Op’s energy proposition differ from the ‘big six’ suppliers?
Our policies on pricing, fairness and simplicity make us different from the big six. But there’s another difference which is fundamental to the co-operative structure: we are owned by our customers and not by external shareholders.
This means that our customers get a share of our profits twice a year, pro rata to how much they spend with us. It also means they have a legal right to appoint our board of directors.
So when we say we are run for the benefit of our customers, this isn’t just a marketing statement, it’s the legal reality of our structure.
What are your plans for the coming year?
Our plans are to keep growing so that we have more buying power in the energy market which we can pass on to our customers in lower retail prices.
With growth comes the constant challenge of maintaining excellent service, which for us means never losing the personal touch which customers value so highly.
What are the big challenges facing the UK energy market and how do you plan to address them?
As for the challenges facing the energy market, it’s hard to see how energy prices won’t continue to rise as the growing world population rightly aspires to higher standards of living, which will use more energy.
So the challenge for us all is to save energy and convert to low carbon energy at a pace greater than the rise in energy demand. Otherwise, the next generation will inherit a pretty inhospitable planet.
Why does, or should, the notion of a ‘cooperative’ matter to UK consumers?
In the last few years, many businesses have lost the trust and confidence of their customers. Banks spring to mind. Energy suppliers aren’t far behind.
It sometimes feels like energy suppliers put their shareholders first and their customers last, especially when it comes to price increases.
The great thing about a co-operative is that no-one other than the customers have their finger in the pie. When we put up our prices to maintain our profit margins, it’s so that we can continue to grow a successful business for the benefit of our customers, not to reward shareholders far away.
Read more about Co-operative Energy on their news site.