In the most recent consumer survey published by the Irish Commission for Regulation of Utilities (CRU), it was revealed that the number of electricity customers who have switched suppliers has increased 5% each year since 2014. The rise in switching suppliers is a key indicator of increased retail competition and is potentially making way for a new kind of marketing in the energy sector focused on consumers’ desire to hunt down the best deals rather than relying on previous experience or trust in a brand.
Recent Global Reviews studies have seen evidence of this across the Irish energy market with an increased use of aggregator sites coupled with a drop in choosing a provider based on trust. In Q4 2017, 47% of consumers were using aggregator sites as part of their research process, and this has since jumped up to 61% in the Q2 2018 study. Benefiting the most from this rise is Switcher.ie which went from 30% of consumers visiting them in Q4 2017 up to 49% in Q2 2018.
After consumers conducted their research online, we asked them what they thought about the experience. Overall most consumers found the process good/easy. More specifically, 32% called out their use of an aggregator and how easy it made comparing providers with some suggesting that they had not previously considered changing providers or what other deals/offers are available and through the process of researching and discovering sites such as Switcher.ie and Bonkers.ie will consider switching in the future.
The use of aggregators is impacting which brands consumers prefer
Irrespective of whether consumers use an aggregator or not, Energia and Bord Gais hold their place as #1 and #2 preferred brands at both the shortlist and final preference stages. However, Energia enjoys quite an increase in consumer preferences amongst those who used an aggregator. Overall they were finally preferred by 25% of consumers, but were preferred by 33% by those who used an aggregator.
It is not just the bigger players who are benefiting from an increase in aggregator activity. Newcomer, Just Energy, was shortlisted by 19% of all consumers, but was considered by an impressive 29% of aggregator users bringing them in line with Electric Ireland who was preferred by 39% of all consumers only to see that number drop to 30% amongst those who used an aggregator.
Brands shortlisted Final brand preference
To better understand why there is a shift in brand preferences amongst those who used aggregator sites, we looked at the reasons why consumers prefer one brand over another.
Having the best energy plan and being a reputable brand were both selected by 30% of all consumers as reasons for selecting a brand, however, it is a different story for those who used an aggregator. Having the best energy plan was selected by 36% while being a reputable brand dropped down to 26%. Being a current customer, previous use and trust in the company were also selected by fewer people when an aggregator site was used.
Reason for selecting a brand
Has the increased use of aggregators when researching energy providers caused the drop in trust or has the drop in trust prompted the uplift in aggregator use? Either way, energy providers obviously need to be turning their attention to aggregators if they want to be considered by consumers.
It should be noted that Irish energy providers are not alone in this apparent drop in trust amongst consumers. The Australian Energy Market Commission (AEMC) recently reported that only 39% of Australians trust their energy provider, down from 50% in 2017. This indicates that this is a global problem for the industry, not just a domestic one. It could, therefore, be beneficial for the energy industry to look towards other industries for ideas on how they can improve the general perception of the industry.
Check out our recent webinar covering the dwindling perception of the energy sector in Australia:
Global Reviews is currently running researching into the digital maturity of brands across the energy sector to better understand what the future holds for the industry as well as what consumers really want from their provider. Contact us to learn more about how energy providers are performing locally and internationally.