Small energy suppliers provide the best service to residential customers

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8 February 2013, Gas, Electricity

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The survey had suppliers from outside the Big Six occupying the top eight spots, clearly demonstrating that there are tangible differences between the strategies of large and small suppliers. The common theme for small suppliers is their attention to premium levels of customer service. The relatively new niche for these suppliers is to be kind toward customers and use this as an acquisition strategy for customers who value this over price or brand recognition.

However, not all smaller suppliers are using this strategy; First Utility is focusing solely on price. The growth of First Utility has surpassed that of other independent suppliers, with turnover increases in the thousands of percent over the last four years. Yet this revenue growth has been to the disadvantage of its customer service functions and processes; it was rated ninth in the table, with customer forums full of tales from angry and frustrated customers.

The Big Six are now trying to improve trust issues with customers to combat the competition - for example, E.ON's "Reset Review," SSE's "Customer Charter Guarantee," and so on. Yet a valid question for these utilities is whether it really is a priority to dedicate much focus on customer service if they already control 99% of the market. With millions of customers - compared to thousands for the smaller suppliers - the Big Six tend to utilize marketing campaigns to attract customers. Low switching rates and apathy toward switching ensures that customer losses remain a very small fraction of the overall base.

Datamonitor's forthcoming research brief, titled: "Customer Satisfaction in the UK Domestic Market" (due early March 2013), will use firsthand customer opinion data to analyze how most of the smaller suppliers have provided outstanding service compared to the behemoths of the industry, and in what areas the lower ranked suppliers have been faltering.

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Source: MarketLine

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