14m of you are on a standard tariff with one of the biggest 10 energy companies and over 8.5m have been on that same tariff for more than three years. You’re loyal to your supplier, but what do you gain from this?
Last week energy regulator Ofgem published its annual data showing the numbers of customers on different types of energy tariff with the biggest gas and electricity companies.
This showed two thirds of energy customers are on poor-value standard tariffs. They’ve stayed put despite it sometimes feeling impossible to avoid the constant prompts about switching supplier and saving money. Whether it’s comparison website messages plastered across buses, singing to us from the TV, notes on our energy bills asking ‘could you pay less?’, these blog pages or our very own Which? Switch website, you seemingly can’t avoid this sound advice.
Steadfastly, some of you remain loyal to your energy supplier, through thick and thin.
How you pay for your loyalty
Not only do you pay for your loyalty in your hard-earned cash – Npower’s standard tariff currently costs £355 more than the cheapest deal on the market – you can pay in terms of poor customer service too.
Energy was the second lowest-scoring sector on average for customer service in a recent Which? investigation. Of 100 big everyday brands included, three of the Big Six energy firms finished in 90th place or below, based on their customers’ feedback.
Your energy firm loves your loyalty
Stay a customer for years, fall off a fixed tariff when it expires (if ever you were on one) and sit comfortably on a standard tariff. Stay put this autumn and watch your bill go up, following price rises in the spring and summer and needing to heat your home over winter.
Standard tariffs are rarely energy suppliers’ cheapest deals. Since they’re the default or ’out-of-contract’ option, they’re where you’ll automatically end up if you do nothing. As long as you do that, you’ll be paying a premium for the same product your supplier is selling to more on-the-ball customers for potentially hundreds of pounds less over a year.
Put simply, a loyal (disengaged, or sticky) customer can mean extra cash to an energy company.
Make loyalty work for you
This doesn’t have to be the case. As a consumer you can prevent yourself losing out through loyalty, while some energy firms are looking to do more to reward their loyal customers.
Comparing energy prices and switching tariff is the place to start as an energy consumer, to reassure yourself you’re not overpaying. Stay loyal and still save by making sure you’re on your supplier’s cheapest deal.
Are these tactics for rewarding loyalty?
- Pricing the standard tariff and cheapest deal the same: a couple of suppliers have done this, meaning you’re not losing out by being on the out-of-contract tariff.
- Customer rewards programmes: most recently announced by British Gas, some (often bigger) suppliers can offer discounts and deals for existing customers.
- Making pricing more transparent: start-up firms are promising their prices will track the wholesale cost of energy closely to restore confidence in how their charges are arrived at.
Are you loyal to your energy company? What does it – or what should it – do to keep you loyal?