The electricity market in the UK is highly competitive, and several utilities have been fined because of the aggressive tactics of their sales people. Regulator Ofgem and energy watchdog Energywatch remain concerned about instances of mis-selling, problems with billing and poor customer service, however.
The fact that the present focus is on increasing customer numbers, rather than retaining existing customers, is one of the causes of these problems. Aggressive tactics tend to alienate customers, which has resulted in a decline in first-time switching. While the number of customers who switch remains steady at about 90,000 a week, many are switching for the third or fourth time, indicating dissatisfaction with customer service levels.
In order to remain competitive, utilities will have to pay more attention to keeping the customers they presently have – a rise in churn will negatively affect shareholder expectations.