It comes as no shock that price is the biggest driver when it comes to utility decision-making. According to Maru/edr, 87% of consumers cite price as one of the main factors when choosing an energy supplier for their home.
Competition in the energy sector is fierce – a record number of customers switched suppliers in 2017 according to Energy UK.
Opportunity for growth
This increase in switching has been driven by emerging competition in the utility sector – emerging challenger brands now equate for 20% of the domestic energy market share.
These emerging challenger brands offer something new to the market. As well as competing on price, smaller suppliers have been able to win customers by tapping into the dissatisfaction that consumers have become accustomed to with the Big Six.
And while challenger brands have witnessed almost enviable growth over the past six years, key utility players still provide 80% of the UK’s domestic energy supply suggesting there’s still opportunity out there.
But utility challenger brands will face a tough time in the coming months. Alongside fluctuating costs for wholesale energy prices, the looming government price cap is likely to create more volatility in the marketplace.
Four factors behind leading customer experiences
If challenger brands are going to continue their upward curve of customer acquisition, Maru/edr insight shows they must focus on four key areas – fundamental basics, accessibility, flexibility and innovation.
Maru/edr results show this winter, reliability, trust and customer service are the three biggest drivers of utility decision-making behind price and tariffs.
It reinforces the need for energy suppliers to get the ‘brilliant basics’ in place before delighting customers through differentiation and innovation – such as compelling brand credentials and a leading digital customer experience.
Pressure to increase regulation around the energy sector is growing – with Energy UK calling for more robust market entry tests to limit the risk to consumers when opting for a smaller supplier.
Understanding the voice of consumers and creating an informed strategy that combats these growing market challenges is the only way to ensure survival for emerging utility brands.
After all, with December’s price cap looming, utility brands can no longer compete on price alone.