,Retainingcustomersin a worldof choice,Consumer attitudes towards switching accounts;In which sectors supplier switching is most prevalent;What prompts consumers to make the switch;The experiences consumers face during the switching process;Consumer frustrations when it comes to switching and their suggested improvements;What happens post-switch and consumer feelings around the benefits of making a switch.,The report also considers the possible deregulation of the English water market, whether consumers have anappetite for choice, and what factors would be important to them in choosing a water retailer.Finally, this research will examine a new multi-utility era, and whether consumers would welcomeconsolidation of their supplier base, and for what reasons.Monica Mackintosh - Customer Services Director,Retaining customers in a world of choiceWith increasing competition for customer attention, service providers are under mounting pressure to improvetheir offerings. Customers not only have increasing expectations, they are also more aware of the choicethey have, and are both capable and intent on using this to their advantage.But what, if anything, can businesses do to entice and retain customers in the face of such pressures andwhat are the key considerations for a customer when it comes to deciding to take their business elsewhere.Through consumer research, we set out to answer these questions. Having examined the behaviours,attitudes and experiences of 1,000 UK households, we will look into:,Key Findings,A third of consumers (33%) would switch as a protestagainst poor service.Nearly one in 10 consumers describe their switchingexperience as difficult.40% of consumers say their previous supplier made noeffort to retain their custom.38% of consumers will instantly review their watersupplier if and when the market opens.48% would consider a single supplier for gas, electricand water if it reduced their overall bill costs.,34% of consumers aim to regularly switch their mainutility accounts.11% of consumers have never switched their utilityaccounts.14% of consumers are sceptical as to whetherswitching makes a significant difference to bills orservice.The energy sector experiences most switching; onein 4 consumers have switched/reviewed their accountin the last 12 months. Credit card switching was theleast common, with one in 7 switching/reviewing.A price increase is the one factor most likely to makea customer switch supplier.,A nation of switchersSwitching or reviewing their service providersis a regular occurrence for a third ofconsumers (33%) in the UK, demonstratingthe challenge suppliers face when it comes tocustomer retention.And, for half of customers, it is seen as animportant task in the general management ofhousehold costs as homeowners look toconstantly find the best deals.Even for those who dont consider it a priority,17% would review or switch theiraccounts if they had a pressing need thiscould be anything from financial requirement,dissatisfaction with customer service or a lossof trust in a supplier.,Loyalty and apathyAlthough in recent times It has become morechallenging for businesses to achievetangible loyalty and advocacy, 11% ofconsumers said they have never switchedtheir accounts in the past.Both brand loyalty and customer apathy toswitching are likely to play a role here.However, businesses must be cautious not totake this segment of consumers for grantedas there is no guarantee that their switchingbehaviour will not change in the future eitheras a reaction to, for example, poor service ora sudden price increase, or more proactivelyto manage household costs.,Its an importanttask in managinghousehold costs,Its something thatI aim to doregularly,Its something I doif I have time or apressing reason,Its not a priorityfor me,Attitudes towards switchingThinking of the accounts you hold with utility providers, which of the followingbest describes your attitude towards reviewing or switching these accounts?,34%,17%,14%,50%,2%,11%,I started theswitching process,but never saw it,through,0%,10%,60%50%40%30%20%,I have neverswitchedaccounts,Customer profiling and segmentation are essential for businesses when it comes to,understanding customer switching attitudes and behaviours, as this will help them to engage,customers at the right time and with the right message to increase retention rates.,However, a future challenge in identifying and profiling customers could come from the,introduction of GDPR, which places new rules on how customer information is handled.,The rise of the price comparison service,Comparison service popularity,Of those consumers who have switched supplier,nearly two-thirds (62%) did so through a pricecomparison website.Price comparison websites bring substantialbenefits, often making it easier to make supplier,choice and save money. High levels of consumertrust and satisfaction are also reported.However, what many consumers may not realise isthat these services might not offer deals covering the,whole market (brands who only deal direct), andmore transparency is arguably needed here.,Many customers are, as we know, price conscious.But comparing on price alone takes the focus awayfrom other important factors such as customerservice and added value. Comparison sites are,addressing some of this through the introduction ofquality scores; price however remains the primary,focus.Customers may also be misled. For example, the,CMA* has said it may allow price comparisonwebsites to hide the cheapest energy deals fromconsumers, allowing the promotion of moreexpensive tariffs for which suppliers pay themcommission.,Dealing Direct,A surprisingly high number (37%) of consumers stillmake the effort to check prices and deals directlywith suppliers rather than through comparisonplatforms.There are a number of reasons as to why this could,be the case. Some providers such as Direct Line,for example, are able to bypass comparison sitesaltogether due to the strength of their brand. Also,increasing competition in many markets means thatbusinesses are engaging in higher volumes of direct,marketing to existing and potential customers.,In addition, price comparison websites may nolonger meet the needs of some consumers, whomay, for example, place more value on customerservice or who would rather take on researchthemselves to get the best deals.,Businesses would be wise to not only focuson promotional deals and price discounts, butalso to use customer service as a key,differentiator and communicate effectivelywith existing and potential customers when itcomes to added value products and services.,0%,10%,30%20%,50%40%,70%60%,63%I have used a price comparisonwebsite to switch,37%I check prices and dealsdirectly with suppliers,COMPARESUPPLIERS,COMPARE NOW,DIRECTQUOTEQUOTE ME,Energy,(e.g. electricity,or gas),Motor,insurance,insurance,Home / content Broadband,Mobile phone,Landline,Subscription,TV (e.g. Sky),Credit card,Thinking of your utility providers, which of the following accountshave you reviewed or switched in the last 12 months?,34%,30%,27%,26%,19%,19%,38%,14%,0%,5%,10%,40%35%30%25%20%15%,45%,In which sectors is switching most prevalent?.,Energy sector feels biggest bruntof switching cultureThe UK energy sector (electricity and gas) has,felt the biggest brunt of consumers penchantfor switching with 38% of consumers sayingtheyve changed their supplier during the last12 months more than in any other sector.The energy sector has faced a period ofsustained negative publicity around poorcustomer service and rising prices, leading todiminishing consumer trust.These types of stories and headlines havebeen significantly detrimental to the sector andcould explain the high number of customer,switches.Motor insurance is the next most likely serviceconsumers have reviewed or switched in the,last 12 months (34% of consumers have done,this). This is usually an annual renewal, so is,more likely to come to mind every year.,In addition, with consumers facing higher,premiums the longer they remain with asupplier, it is of little surprise that many chooseto shop around.Credit cards (14%), subscription services likeTV (19%) and landline providers (19%) areexperiencing the lowest levels of consumerswitching.The relative low levels of switches when itcomes to subscription and landline servicescould be in part attributable to the increasingpromotion of bundled services and,associated discounted deals.Focusing on getting things right in the,first place can play a key part in avoiding,expensive and time consuming customer,acquisition and retention activities.,Switching and consumer scepticism,8%6%4%2%0%,10%,16%14%12%,14%Im doubtful as to whether switchingmakes a significant difference,Scepticism remains an important factor whenit comes to account switching behaviour andwhether consumers believe that a change insupplier actually makes a significant impact.14% of consumers, for instance, say theyare doubtful that switching makes anysignificant difference.,This is despite heavy marketing and mediapromotion about the benefits of switching to,get better deals. There may be more thatneeds to be done in this area to make morecustomers aware of the potential benefits.However, customers previous switchingexperiences, or those retold by friends andfamily could also have an impact here.As well see in this report, not everyoneenjoys a trouble-free switching experience. Inaddition customers may expect a smooth,fast and simple process, where as the reality,could be more complex, leading to high levelsof perceived risk, hassle and difficulty;resulting in barriers to switching.And, with todays fast paced society, manycustomers are simply time poor; this may insome instances exacerbate scepticism.,Businesses must not only offer the rightdeals and incentives to attract customers,they must ensure that customer,expectations are closely managed, andthe customer experience throughout theswitching process is prioritised.This will help reduce levels of scepticism,alongside providing meaningful value tocustomers in the longer term via proactivecustomer service and targeted, personalisedproducts and services.,Poor service a key contributor to switchingWhile price concerns unsurprisingly remain the top pain point whenit comes to switching, business that fail to provide consistent andquality customer service are in serious danger of losing customers,with a third of consumers (33%) saying they would considerswitching for this reason.This highlights the challenge businesses and brands face in gettingcustomer service right. Poor claim handling is also a contributingfactor for 18% of consumers, while 20% rely on expert comment ,their supplier in favour of another business seen as more ethical.Multi-utility offerings and the ability to have service provision under asingle provider is a consideration for 18% of consumers.Whats clear is there are a wide range of reasons behind consumerswitching behaviours. How much consumers pay for their services andwhether they get value for money is of course a key consideration.But, to avoid a race to the bottom, businesses would be wise,to place equal focus on other consumer concerns; enabling,them to create cut-through in markets that are increasingly,becoming noisier and more competitive.Using cost-effective ways to communicate with customers,businesses can engage on added value and real time benefits;,offering positive and meaningful messaging without, of course,overwhelming customers.,What drives customer switching?Which of the following reasons are likely to prompt you toreview or switch one of your utility accounts?,When asupplierincreasestheir prices,To bring billsunder a singlesupplier tosimplify mypayments /,managingaccounts,Due topoorhandling ofa claim,When there is acompanyscandal (e.g. aprovider hasbeen fined for,charging toohigh prices or isexposed for,offering poorservice),Advice froma friend orrelative,To change to amore ethicalsupplier (e.g. anenergy providerthat prioritises,renewableenergygeneration),As a protestagainst poorservice,As part of aregular review(e.g. anannual checkof the best,deals),Whenhouseholdbudgets gettight,40.%,36%,33%,14%,18%,20%,16%,18%,12%,Commentsmade by anexpert in themedia (e.g.Martin Lewis),0%,40%30%20%10%,from someone like Martin Lewis as guidance for moving accounts.50%Businesses also face increasing pressure on the ethical front asmore than one in 10 (12%) of consumers would consider changing,70%60%,61%,The switching experienceHandling the switching process,Just half of consumers who have switched service providers described their experience as“smooth and simple”, with nearly one in 10 (8%) describing the process as difficult.Customer expectations could play a part here; with customers valuing speed and convenience, noloss of service, and being kept properly informed through out the process. Businesses shouldseek to make the process clear for customers; outlining the timeline to making the change, the keysteps and what information the customer must supply and by when. Effective management ofcustomer expectations may assist in reducing the perceived hassle and difficulty of switching.However, for some customers their negative experience may have resulted from errors made bysuppliers during the process, a lack of communication or unexpected delays. Mitigating theseavoidable customer frustrations should be a priority to improve the switching experience.,The customer experienceBusinesses may choose not prioritise exiting customers, assuming that once a customer hasdecided to leave that they will always be gone. However, it may be that they are only looking for atemporary switch and if a business provides good service during the process they may have thechance to acquire the same customer back when they next choose to switch. Canvasing customeropinion via exit surveys can help service providers better understand the reasons why customersare leaving, provide the opportunity to say youre sorry to see them leave and to engage viaretention messages.We would advise that businesses are better served by making the switching processsmooth and simple, and ensuring a great customer experience.,42%,50%,There was moderateeffort involvedIt was a smooth andsimple process,Which of the following describes your typicalexperience when switching accounts?8%It was difficult,The biggest customer frustrationsWe asked consumers to tell us about any recent poor switching experiences. Customersshared a wide range of experiences they perceive as frustrating and unsatisfactory; manyciting examples of terrible customer service, hidden costs, unexpected price increases, a rangeof errors and unexpected delays to the process. They quoted examples related both tosuppliers they were leaving and those they were joining.,