Price comparison websites are the biggest driver of people switching utilities provider, according to a new report from YouGov.
The “Utilities: Key Drivers of Retention” report shows that price comparison websites are by far the most effective influencer when consumers change supplier, with almost four in ten (39%) switchers saying such sites prompted their change. Doorstep visits were the next most effective (12%) followed by people changing supplier when they moved house (10%). All other influences – such as recommendations from family and friends and advertisements from utilities companies – each spur less than 10% of switches.
The findings show that price comparison sites are radically altering the utilities sector, reducing the levels of “energy inertia” among consumers and prompting customers to switch. Indeed, of those who have switched, more than half (55%) have done so proactively after receiving a prompt such as seeing an advert or visiting a price comparison site.
Young people seeking savings
Significantly for utilities companies, younger customers – who in the past have shown strong levels of inertia when it comes to energy providers – are more willing to switch for smaller rewards. Four in ten (42%) of under-25s would consider changing supplier for an annual saving of up to £49 compared to just under a quarter (24%) of 35-44 year-olds, around a fifth (19%) of 45-54 year-olds and 16% of the over 55s.
Making the switch
YouGov SixthSense’s report shows that almost two-thirds (65%) of people have changed utilities provider and almost a quarter (23%) have switched three or more times. Over half (54%) of those who have ever changed utilities provider say they are likely to change again in the near future. More than eight in ten (85%) customers switch to save money and are on average willing to switch for an 11% saving on their bills, or a £61 absolute reduction.
James McCoy, Research Director for YouGov SixthSense, said: “Price comparison sites have fuelled energy migration on a scale not seen previously and it is something that poses significant challenges for utilities providers. Previously, energy inertia was the main way of retaining young and relatively less affluent customers. However, this is changing as it becomes easier to switch and younger consumers are prepared to move supplier for smaller rewards.”