A report published today by uSwitch has revealed that consumer’s perceptions about how easy or difficult switching to a new household service provider is, dictates the likelihood of them making a switch.
The more difficult switching for a particular service is thought to be, the more consumers require either a bad experience or a guarantee of significant savings before deciding to change.
Once customers decide to make a switch, saving money becomes their priority ahead of better customer service.
A video guide to the switching state of mind
Misperceptions surrounding the ease of switching
The research uncovers that although many consumers assume switching is a difficult process, most change their mind after their first try.
This applies to most consumer service providers, for example six in 10 of those paying a mortgage assume a switch to a new mortgage provider would be complicated. In contrast, three quarters of those who changed mortgage supplier found the process simple.
Mortgages, digital TV contracts and bank accounts are considered the most difficult services to switch and consequently are the least likely to be changed.
The average consumer requires a saving of £100 per year to consider making a switch, a figure which rises to £177 for switching mortgages and £111 for energy suppliers.
Switching is ‘key weapon’ for consumers
Ann Robinson, director of consumer policy at uSwitch.com, said: “Switching is a key weapon in every household’s battle to keep bills under control. Unfortunately, what should be a simple solution has been placed ‘off-limits’ with many consumers unwilling or unable to get past the barriers they perceive to be in the way.
“It’s evident that a lot still needs to be done to help consumers feel confident to shop around for a better deal. At the moment they are being held back by a lack of education, support and encouragement.
“The new current account switching service is a step in the right direction, while both Ofgem and Ofcom are looking at how they can boost consumer engagement in energy and telecommunications. This is all good news, but it’s clear from our report that there’s still a very long way to go.”