Most of us today feel we have too many things to think about and the Energy Switching agenda gives us yet one more. Powers that Be are frustrated with how stubborn consumers have been not to engage and switch. In the commercial world companies tend to stop and reconsider when they meet this much resistance to a product offering. As marketeers and consultants one of our key skills is to delve into motivations. I've read the public information and the motivation behind the Energy Switching agenda never seems to be explained satisfactorily.
Yesterday Ofgem announced its measures to shake up the energy market. The premise appears to be that it will be good for consumers and good for the country at large if we switched energy suppliers. I remain unclear about the real agenda or motivations behind all the money and human endeavour that has been thrown at this issue over the last few years.
If the motive was to protect the vulnerable, the government could just make automatic payments as they do fuel supplements for the elderly based on pensions eligibility; they have everyone's tax status so wouldn't be administratively hard. So it's not really that, is it?
There is no agenda to get us to use the most efficient or cheapest supermarket, so why for energy? Are supermarkets not 'a competitive market'? No one says you're 'lazy' or disengaged if you go to Waitrose rather than Aldi. Yet they both sell pretty much the same milk.
They give evidence for the amount of savings that could be made by switching energy supplier. The nation could save Â£1.4 billion pounds and if people would only switch this money could be put back into the economy to help it grow. (Surely this is a fallacious argument - why is money spent on energy supply less stimulating to the economy than money spent on any other consumer goods or services?) On average, each individual could save Â£300 a year, so, they said, not to engage in the switching agenda must be irrational.
Or perhaps consumers are even more clever than the switch lobby could reckon on. That Â£300 figure is based on the current high payers subsidising the low payers, so more detailed calculations are that if many more people switched, the corresponding price adjustments the market would need to make would eventually result in only about a Â£75 saving for each consumer.
The Ofgem spokesman in unveiling the new measures said that the providers need to offer different rates because different users have different usage patterns. If they really wanted to ensure we all got the cheapest rates, why not enforce that instead of going to the SVT (Standard Variable Rate') when your contract ends and you do nothing, default to the "CVT", 'cheapest' rate? And then if a consumer wanted a tariff better suited to their different usage pattern the onus would, as now, be on them to change. No doubt that wouldn't be a very popular suggestion amongst the big energy suppliers.
Somewhere there is a hidden agenda as the arguments just don't stack up. Perhaps it's time those charged with pursuing this agenda, whatever it may be, need to respect consumers more and really listen to what they have been telling the researchers for the last two years about their needs and priorities.
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