When Steven Day, Andrew Ralston and Chris Alliot founded Pure Planet as an app-based energy supplier they faced the task of convincing not just the public but the wider industry that their model was the future rather than a fad.
Last year the brand was accused by Citizens Advice of “putting customers at risk” by not having a phone line – a decision Day called “arcane”.
However, while the UK-wide lockdown has forced other retailers to rapidly adapt to new ways of working and interacting with consumers – Pure Planet’s model has put the company one step ahead.
The Bath-based green energy supplier, in which BP owns a 24 per cent stake, was founded in 2017 to meet the needs of a new breed of consumer.
In its first full year of trading – to March 2019 – the customer base grew from 16,000 to 110,000 with revenue increasing to £85 million. The company recorded a loss of £17 million for the year.
According to the three founders, Pure Planet’s business model has allowed its customers, who it refers to as members, to communicate with the supplier as normal during the coroanvirus pandemic and has also allowed for a swift and easy transition to home working for its staff.
Ralston, Pure Planet’s chief executive, explains: “From our perspective as a business we have been able to migrate to the lockdown and new way of working very seamlessly. The impact on our member base has therefore been negligible. We have been able to conduct our day to day operations very much under a business as usual basis. That has worked extremely well and we have had no negative issues to deal with.”
Alliot adds that the supplier may have seen a lower rate of direct debit cancellations due to the way the firm handles its single tariff. Payments for Pure Planet’s customers are lower in the summer than in the winter. He says that for many who informed the supplier they were struggling financially due to Covid-19, the lower summer price was sufficient to ease the burden.
While the Citizens Advice spat points to the challenges Pure Planet has faced in extolling the virtues of its model, Day argues the current crisis has prompted a “dash for digital” in the energy sector, vindicating the trio’s way of thinking.
He says: “What we have just proven is that actually it can continue to deliver at a 100 per cent service rate which is exactly what has happened and what we are seeing elsewhere in our sector as well as in others is a dash for digital. People are realising that structurally, having hundreds, if not thousands, of people tied to buildings with systems that are also tied to those buildings is just too 20th century for the modern-day world and that is not going to work. So there’s a scramble on to try and reconfigure how people provide service.”
Day says he can see some irony in the fact that consumers are switching their behaviours and social norms are moving towards more online services such as chatbots.
He adds: “It is important to recognise that the world was changing anyway, which was our prior position. We think now there is no way back and we do think that businesses will have to adapt, they will be changing their capex spend, they will be thinking how on earth do we deliver service, particularly the big guys who have been stuck on old business models and old kit, they are going to have to move pretty rapidly to get into the new world. I think socially, as individuals, there’s much more willingness and readiness that we’ve learned to adapt and to change through this time as consumers to a digital world.”
Regardless of how adaptive a supplier’s customer service model is, sickness and staff shortages are two very real threats in the current situation. Already tens of thousands of workers in the energy sector have been placed on the government-backed furlough scheme, which was recently extended till the end of June. Pure Planet however has been fortunate in regard to staff sickness rates according to Day, who adds that none of the supplier’s staff have been placed on furlough. In fact it has carried on recruiting new team members.
Day says: “When we built Pure Planet, we built it on the cloud, so it was relatively easy at the beginning to move everybody across. Everybody who works for Pure Planet is equipped with a laptop and they can pretty much work from anywhere they like. Historically we have moved from one office to another so we had practice in the steps between those moves in having everybody at home anyway so it was really easy for us.”
Last month the company announced eight new starters have joined within the lockdown period. People director, Rich Roberts, said the new recruits have been trained without meeting any of their colleagues face-to-face, meaning the company has created an entirely digital recruitment process.
Flexibility from the wider sector
It has been several weeks now since suppliers were revealed to be in talks with the government over what type of assistance they should have in response to the pandemic. Chris Alliot points out that while the focus has rightly been on providing flexibility for customers, the industry could help itself by extending reciprocal flexibility to things like wholesale costs and network charges.
He continues: “We have been asked to provide flexibility on the cash coming in, what we would like is to see some flexibility on the cash going out as well if that’s necessary.
“That would be to some degree a little bit of the industry trying to help itself. Of course the circle has to be squared but we just felt that was probably a way in which the system could perhaps help to buffer, to some degree, the payment cycle.”
Alliot points to the contracts for difference (CfD) scheme as an example of such flexibility. The government has recently agreed to make a “one-off interest-free loan” to the Low Carbon Contracts Company (LCCC) to help offset a rise in CfD top-up payments due to the pandemic.
Vulnerability
As vulnerability increasingly affects more people, one of the big challenges for suppliers during this time has been offering the right help for consumers. Pure Planet’s founders are in favour of extending schemes such as the warm home discount to those affected by coronavirus. Such an idea was mooted by MPs early last month.
Ralston says: “One of the points we suggested is that we have a framework with the warm home discount. Were they to relax or broaden the criteria for people to be included in that broader group of the warm home discount, that feels like an ideal solution that suppliers already operate under and could be used to support people who are in financial difficulty specifically as a result of Covid-19.
“And you could get proof through either people being furloughed or redundancy notices, there is a number of criteria that could be used and that felt to us like an obvious way forward and potentially a relatively quick way forward to put something in place. We shared that with Energy UK and with Ofgem, obviously these things take time but that feels like a bit of a missed opportunity.”
Furthermore, Day believes there are parallels with how Nightingale Hospitals have been swiftly established by re-purposing pre-existing conference centres, as opposed to building completely new hospitals.
“We re-purposed something that exists, so the parallel in our sector here is that there’s functionality that exists around the warm home discount. That is being used for a very specific purpose for obvious reasons, but here’s something that could be adapted and shifted a little bit, then you can solve one of the issues which has sprung up from nowhere, i.e. the virus, to really help people that are caught in the maelstrom of it at the moment quickly by using the existing framework but in a slightly different way. We think that’s a good idea.”