A report has recommended there be more clarity around the language used in bills and communications in order to prompt more market engagement.
The Sustained Engagement in the Energy Market report was commissioned by Ofgem and the Gas and Electricity Markets Authority (GEMA).
It surveyed 30 respondents with a range of switching experiences with both tariffs and suppliers from a mixture of geographical areas across Britain.
It aimed to find out what happens to domestic consumers after they have engaged in the market at least once.
To do this it had several research objectives. These were:
- Understand how people behave after a recent switch in tariff / supplier
- Develop a more complete behavioural model for barriers to market engagement (for individuals who have previously engaged)
- Test hypotheses around barriers to sustained engagement with the energy market
- Explore opportunities and levers that can be used to shape engagement behaviour
Consumers from a range of backgrounds were surveyed, from the “very engaged” to those with much less engaged strategies.
“Ongoing switchers” feel more confident about their predicted return on invested effort taken to switch. “Lapsed” switchers meanwhile lack this confidence, and report a number of (seemingly obvious) barriers to remaining engaged.
The report found that these reported barriers are driven by several underlying factors – previous experience with the market, assumptions and myths about the market, and the tendency to post-rationalise excuses for disengaged behaviour.
By tackling these underlying barriers, the report says, there are opportunities for encouraging sustained engagement that are rooted in increasing motivation and reducing perceived effort of ongoing switching.
The report recommended that people need to be helped to understand the meaning of different definitions used in bills to “better inform their awareness and choices” and recommended reframing the standard variable tariff (SVT) to show consumers it is “considerably different” and “less convenient” than a fixed tariff, to give the clear idea of its cost.
It also recommended that the industry regulator should address the myths and communicate that its role is to ensure competition and safeguard consumers rights.
Furthermore it recommended that consumers should be provided with strategies to navigate the options available to make choice “less daunting”.
In response to the report chief executive and chief ombudsman at the Energy Ombudsman Matthew Vickers, said: “The report’s recommendation on ensuring clarity in bills is definitely something we would echo.
“Most of the complaints that come to us are about billing – it’s still by far the biggest driver of unresolved complaints.
“We’re currently handling around 2,300 billing complaints every month.
“Our message to energy companies is that billing isn’t just a back-office function. It’s your most important customer touch point and therefore represents an opportunity to build brand loyalty and improve customer retention rates.”