Standing out from the herd: lessons from UK energy retailers

By Kelly James

If you come to EMC conferences, then you have seen great examples of retailers responding to customer drivers and tailoring service offerings to match. Developing good offerings moves you a good way toward winning and keeping customers. The harder task is the ability to beat your competitors: keeping customers aware of your differentiators, and getting your deals in front of your target customers more quickly than the rest of the competition.

North Americans can take a page from the UK playbook. The Office of Gas and Electricity Markets (Ofgem), Great Britain’s energy market regulator, is jumpstarting consumers’ ability to switch suppliers. Their Switching Programme puts pressure on both delivery and supply to streamline complex switching arrangements that have been in place since the 1990s.

Increasing the velocity of customer switching and related IT investments will noticeably reshape the market. The battle ground is shifting and will no longer be exclusively about price. In fact, the combined impact of the regulated price cap with the utilities switching programmes will rapidly drive uniformity of price. Competitive advantage instead will come from customer experience, differentiated offerings and a rapid time-to-market (TTM). This will also potentially fuel a rise in automated switching mechanisms that monitor the market and move customers to the best deal.

As in the UK, American retailers have started to compete more on differentiation than on price. This is driven by growing market participation. Recent 2018 research from the Retail Energy Supply Association’s Dr. Philip O’Connor showed 85% of C&I customers and 50% of residential customers are choosing service from suppliers other than the utility default service, in the 14 jurisdictions served by competitive suppliers.

North American retailers can learn from smart suppliers in the UK: as they upgrade their systems to comply with Ofgem’s fast switching requirements, retailers are simultaneously taking the opportunity to transform their customer experience and product innovation capabilities.

This requires a digital strategy with the following considerations:

  1. Cost of compliance: Can the utility’s digital capabilities at the back-, middle- and front-end keep up pace with the rapid processing requirements?
  2. Switching mechanism: Will the switching mechanism be able to handle larger volumes of customers? Is all customer data already stored and ready to be leveraged when the switch is to be made? Is there a customer experience portal integrated with the wider customer workflow? Are value added service offerings considered an integrated into the complete customer experience and workflow?
  3. Omnichannel/multichannel experience: What channels will be supported by the switching program – digital, physical, paper-based or door to door? What information needs to be captured and tracked? How will the information flow between systems?

These primary concerns directly correlate to the moments that matter for the end consumer:

  1. Switching experience: The UK requires that the end–to-end process of switching to a new vendor must be as smooth as possible and take less than one day. Therefore the number of steps between research, selection, sign-up and final payment must be easy to understand and execute.
  2. Reach, support, and convenience: The switching process and supporting engagements must be 100% omnichannel, efficient enough to support multiple concurrent sessions, and easily accessible 24/7/365.
  3. Pricing and plan type: All information about the plan and related features must be easily available to the end consumer. It must be easy to compare plans side by side, and any additional charges or caveats should be clear as well as any value added options.

Energy retailers differentiating themselves on customer experience and rapid TTM can learn from their UK counterparts, who recognize that a customer engagement layer must be as fast and nimble as the transaction layer.


Kelly James is the VP and General Manager of Vlocity Energy & Utilities

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