We’re living through the biggest period of change in the energy supply market since privatisation a generation ago.
Challenger brands and disruptors are themselves reaching maturity, partly through organic growth and partly through takeovers.
Shape shifters
Octopus Energy’s recent acquisition of Engie’s 70,000 domestic customers was its sixth such deal in two years.
Meanwhile, Ovo’s purchase of SSE’s retail arm will see it become the UK’s second largest supplier, behind British Gas, with five million customers. With Npower being folded into Eon, the phrase ‘big six’ is already starting to sound like an anachronism.
Alongside this unprecedented change in the commercial makeup of the sector, new technologies and business models mean many different stripes of service are starting to come to market.
From auto-switching services to heat networks and electric vehicles (EVs), the consumer relationship with energy and the energy market is changing before our eyes.
Macro v micro
While change can be exciting for dealmakers and policy shapers at the macro level, we shouldn’t forget that it can feel very different for consumers at the micro level.
The word ‘disruption’ has positive connotations when we think about change and innovation in the energy sector.
Disruption, however, isn’t as enthralling when you’re a consumer looking to recover an account balance, get billed accurately or resolve a complaint – only to find that your supplier has ceased trading, merged or been acquired.
While there have thankfully been no supplier failures so far this year, mergers and acquisitions look set to be a theme of 2020.
Too often the customer journey in the event of a takeover or other corporate transaction isn’t one that builds trust or encourages engagement in the energy market. Instead, it can be something that unsettles or confuses consumers.
That’s bad news for the gaining supplier as it can make it harder to build lasting relationships with the customers it has just acquired.
It’s also bad news for the sector as a whole, at a time when the new services and innovations that are key to achieving net zero depend on a rock-solid foundation of trust.
Guiding principles
That’s why we’ve set out some high-level principles that will guide our approach to handling ‘live’ consumer complaints following a merger or acquisition:
- Fair outcomes for consumers
We think that, wherever possible, any disruption to customers with an active complaint should be kept to a minimum. Put another way, we feel that consumers with a complaint, problem or issue shouldn’t be left in a worse position by a commercial deal over which they had no say.
- Due diligence should include complaints
In most types of acquisition, companies will have the opportunity to complete due diligence. A supplier should therefore be in a position to understand any complaint liabilities it is taking on and allocate resources to ensure continuity of service for customers.
- Mergers and acquisitions shouldn’t disrupt redress
Our starting point is that a merger or acquisition shouldn’t deprive someone of access to independent redress. For this reason, in the event of such a deal we will continue to manage all complaints in line with our terms of reference and within agreed timescales.
Missing piece of the jigsaw?
We appreciate that complaints are only one piece of a complex jigsaw when it comes to a merger and acquisition. At the same time, we feel it’s important that access to redress for consumers isn’t forgotten or disregarded in such transactions. We’re keen to work with suppliers on how to improve things for the benefit of consumers. If we succeed, we’ll have a stronger, fairer sector for it.
Changing perspectives
Let’s remember that for all the excitement of corporate takeovers and market deals, the business of energy will always rest in the power of that one-to-one, personal relationship with the consumer.
So disrupt competitors, challenge conventions, shake up the market but don’t distress and shake down customers while doing it.
We all know the market must change radically, but we’re going to have to get better at how we help customers deal with the pace and dislocation change brings.
After all, they’ll always find change a lot less exciting and a lot more confusing than we do.