Big Six utility companies need to boost their energy levels

Holidays and a broken hand have meant that I have been kept from writing these weekly missives for a month. Last time out I wrote of a string of marketing mishaps by energy suppliers. One month on, the energy sector has offered up a series of fresh points ripe for discussion.

It speaks volumes about the lack of trust in the energy sector when companies feel the need to sign a pledge essentially saying that they will not use the completely unrelated installation of smart meters to partake in surreptitious direct marketing.

But that is what is happening, kick-started by Npower this week, after the consumer watchdog called on the big six suppliers to agree to “no selling, just installing” when putting in smart meters.

Npower has agreed not to incentivise its installers to sell while fitting smart meters and says its staff will not ask customers to enter into new contracts or change tariffs during the installation. The other five are expected to follow suit.

The natural order of things, surely, is reports of unscrupulous action followed by pledges of change. Proactive pledges not to ruffle feathers is to the industry’s credit but it’ s also indicative of a sector that has so sunk low that it is walking on egg shells at constant risk of causing terminal damage to its already critical reputation.

Which? found that trust in energy companies is even lower than that of banks, which, lest forget, were responsible for bringing the country to the economic precipice. Just one quarter of the UK adult population considers energy suppliers to be trustworthy, compared to 30% that believe banks are trustworthy.

By way of a roundabout response, EDF Energy boss Vincent de Rivaz, admittedly while announcing (or is trying to distract from the fact) it was putting up gas bills by 15% and electricity by 4.5%, took the unprecedented step of calling for a Competition Commission inquiry to help restore confidence in the industry.

He continues: “It is important this perception is addressed. The energy challenges Britain faces are far too important and can only be addressed in a world with trust, open dialogue and mutual understanding.”

Sobering stuff. There is a danger that the sector, clearly bruised, could crawl into its shell, only popping out to issue apologetic communications until the public’s ire passes to another sector.

This is time for boldness, however, not diffidence. Energy secretary Chris Huhne said at the weekend that customers “do not bother” to shop around for better deals. If they did, he adds, enough money could be saved to pay for a weekend break.

One of the reasons they don’t is that energy companies rarely make these points about price in their DM. Sensitivity about price increases and their subsequent impact on perception should inspire energy companies to point out how customers can save money, and how much more they save by choosing them over rivals.

To have a larger trust deficit than banks is quite an achievement.

Those financial services firms that have managed to remain relatively high in the consumer’s affections have done so by focusing on and effectively communicating added value. A Competition Commission investigation will only confirm what people already know, the sector is broken.