Businesses are in the dark on energy purchasing as new research shows that nearly half (47%) have never switched suppliers or tariffs, with one in five not knowing that switching is an option for them. Three-quarters of SMEs – which equates to approximately 3.9 million businesses – believe they pay too much for their utilities and almost the same number (75%) understand there are savings to be made.
Following recent consumer switching campaigns, the study, published by one of the UK’s leading energy and water consultancies, Utilitywise, explores what businesses know about energy switching and found that despite feeling they pay too much, there is a lack of understanding about the options or perceived barriers that stop them taking action.
“There has been much in the news about domestic customers switching to get better energy deals, which is positive in terms of building a competitive market place and educating consumers about energy. Businesses can do the same and there are real savings to be made. However, it is daunting and more complicated for commercial enterprises to navigate switching as they may have a number of sites, meters and different contracts – this is where working with Utilitywise can help,” says Andrew Richardson, Deputy CEO of Utilitywise.
In the past year, Utilitywise has switched over 80% of new customers to a different supplier to get the right tariff for their business. Furthermore, over half (51%) of existing customers were switched to either a new supplier or tariff during last year, which demonstrates the need for ongoing utility management to ensure that customers always have the right deal for their organisation.
Although one in five (20%) businesses switched in the last year, many others avoided moving to new suppliers and tariffs due to the belief it is not worth the hassle (28%) and the return would not outweigh the time it takes to organise (20%).
Before working with Utilitywise, 28% of customers did not think switching would be worth the hassle, 23% did not have time to do it and 16% found it too confusing. Yet, 68% of the Utiliywise customer base believes switching helps to make the market more competitive and 72% thinks it makes suppliers work harder to meet the customer’s needs.
London is the most ‘switched on’ city when it comes to understanding the options for switching suppliers, whilst Liverpool has the highest majority of non-switching businesses. Businesses in Cardiff are most vocal about thinking they pay too much for their utilities at 87%. North West businesses based in Manchester (62%) would be more inclined to switch if they were supported by a trusted adviser with a proven track record.
When it comes to reasons why business owners are reluctant to explore switching, many believe it will take them too much time and effort:
- 46% fear costs and fees attached to transferring to a new supplier
- An increase of paperwork and forms to fill in makes 46% of businesses nervous
- Over a quarter (27%) even believe that switching will cause a disruption to their energy supply and that they may be left for a period of time with no gas or electricity
Businesses can learn about the energy options open to them through switching and the benefits this can bring by visiting: www.utilitywise.com/no-hassle-switching/