Customers taking part in Ofgem’s collective switching trial who received multiple communications were eight times more likely to switch than those who did not, the final results have revealed.
The overall switching rate in the trial was 22.4 per cent, over eight times higher than the rate of switching in the third group of participants which did not receive additional communications.
Participating customers were randomised in to three trial arms, an Ofgem arm which received letters from Ofgem and Energyhelpline, a supplier arm, which received letters from their supplier and Energyhelpline, and a control group which received no additional communications.
The most successful arm of the trial, the supplier arm, increased switching rates to ten times that of the control group.
The results conclude that the first two trial arms saw a significant increase in switching compared to the control group and that intervention had a “clear and substantial impact”.
Switching by phone was the most preferred switching route, almost three-quarters of customers who switched through Energyhelpline chose to use the phone.
Almost two-thirds of the participants in the trial had been on a standard variable tariff for between three and six years.
These customers were more likely to decide to switch than those who had been on such tariffs for longer.
The report also found that those with high consumption rates were slightly more likely to switch tariff, but the differences were small.
Over half of all the customers in the trial paid their bills by direct debit; those customers were much more likely to switch than those who paid by other methods.
In total customers who switched saved £3.9 million, with an average saving of £299 each.
The trial was launched in response to a Competition and Markets Authority (CMA) investigation which found there was an adverse effect on competition in the retail energy market.
The collective switch trial ran between February and April and involved 50,000 disengaged customers from an unnamed “large supplier”, later revealed to be Scottish Power.
In August Ofgem issued Npower with a formal direction requiring the company to allow 100,000 customers on more expensive default deals for three years or more to take part in the next collective switch trial this winter.
The following month the regulator ordered Npower to join the trial after saying the supplier refused to comply with the directive.
Npower told Utility Week that the supplier would continue with its application for a “fuller” court hearing to address “important issues” raised by the collective switching trial process.
The case is expected to deliver a verdict shortly.
Matthew Vickers, chief executive and chief ombudsman at the Energy Ombudsman, said Ofgem’s research shows “how simple steps can have a big impact on consumer engagement in the energy market.”
He said: “It contains actionable insights for suppliers when it comes to both customer acquisition and customer retention.
“Our view on switching is that consumers are increasingly realising that choosing an energy supplier is about more than just price.
“Good customer service is just as important as price. In fact, we see customer service and customer experience as the key battleground in the energy sector over the coming years.”