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  • FIRST POST
    • Cardew
    • By Cardew 27th Sep 16, 10:41 AM
    • 26,078Posts
    • 12,539Thanks
    Cardew
    Eon - Customer loyalty??
    • #1
    • 27th Sep 16, 10:41 AM
    Eon - Customer loyalty?? 27th Sep 16 at 10:41 AM
    I have a particular hate of firms - banks, Sky etc - who offer attractive deals that are not available for existing customers. - a kind of 'reverse loyalty'!

    I have today received an email from Money Supermarket about their new 'Collective' tariff with Eon( Saver Fixed 1-year v1). Amongst the conditions is this statement:

    Availability: Not available to existing Eon customers****

    You canít get this deal directly from Eon
    I appreciate this has been mentioned before in the forum, but not specifically about the practice of excluding existing customers from cheap tariffs.

    At least with the much maligned British Gas, customers on any of their tariffs - including the MSE Feb 17 Collective - can switch to the MSE Oct 2017 Collective without penalty and still get £30 cashback from MSE.

    IMO Eon should be ashamed of introducing this practice of excluding existing customers from the cheaper tariffs - especially in light of Ofgem's declared policy of simplifying tariff structures.

    The very helpful Malc and Helena from Eon contribute to this forum. Perhaps they can convey this message to their 'masters'.
Page 4
    • gt94sss2
    • By gt94sss2 1st Oct 16, 7:47 PM
    • 3,877 Posts
    • 1,740 Thanks
    gt94sss2
    The only concern is, if I pay £60 penalty to switch now, what happens next year? I will not able to switch to another cheap E.On tariff, so it will be another £60 to switch away. Might as well stay put at Scottish Power.
    Originally posted by Pincher
    Switching between different Eon tariffs doesn't attract any early termination penalties- they only come into play if you switch to a different supplier while in contract.
    • Pincher
    • By Pincher 1st Oct 16, 9:51 PM
    • 5,860 Posts
    • 2,144 Thanks
    Pincher
    Switching between different Eon tariffs doesn't attract any early termination penalties- they only come into play if you switch to a different supplier while in contract.
    Originally posted by gt94sss2
    I thought this thread was about juicy tariffs only available to NEW customers?

    If E.On can get away with it this time, the concern is they will carry on barring existing customers.
    What happens if you push this button?
    • Micron
    • By Micron 1st Oct 16, 11:07 PM
    • 16 Posts
    • 19 Thanks
    Micron
    Eon - Customer loyalty??
    Would anyone have any suggestions how E.on could earn the trust of their existing customers and earn a fair profit ?

    14 March 2012, Dr. Tony Cocker, CEO of E.ON UK, said: "As CEO my main priorities are both to earn the trust of our customers and to earn a fair profit because I recognise that in the long term no company can be sustainable without both. We understand that our customers want to know they are paying a fair price for the energy they buy from us.......Ē
    • merchcon55
    • By merchcon55 3rd Oct 16, 9:02 PM
    • 35 Posts
    • 52 Thanks
    merchcon55
    What is the minimum amount of time one needs to stay with a given Energy supplier before you can change again?

    Say one leaves E.on for, as example, npower and you go on one of their "no exit fee" rates (to keep this example easy, let us say Standard rate).

    If the minimum time to stay with a company before you could change again were 30 days, on the 13-14th day one could arrange a switch back to E.on (and be eligible for a NEW CUSTOMER rate) - as the switch would take 17 days, you would have stayed with the "new supplier" (Npower in this example) for the minimum 30 days.

    Perhaps the E.on reps could let us know what the minimum time period is to stay with a new supplier.

    While not ideal - might be away around the "new customer only" tariffs that are being introduced.
    • Cardew
    • By Cardew 3rd Oct 16, 10:45 PM
    • 26,078 Posts
    • 12,539 Thanks
    Cardew
    What is the minimum amount of time one needs to stay with a given Energy supplier before you can change again?

    Say one leaves E.on for, as example, npower and you go on one of their "no exit fee" rates (to keep this example easy, let us say Standard rate).

    If the minimum time to stay with a company before you could change again were 30 days, on the 13-14th day one could arrange a switch back to E.on (and be eligible for a NEW CUSTOMER rate) - as the switch would take 17 days, you would have stayed with the "new supplier" (Npower in this example) for the minimum 30 days.

    Perhaps the E.on reps could let us know what the minimum time period is to stay with a new supplier.

    While not ideal - might be away around the "new customer only" tariffs that are being introduced.
    Originally posted by merchcon55
    I don't think there is a minimum time you need to stay with a firm. When rewards for switching were higher people used to post on here about how much money they made switching several times a year.

    Some firms like Sky who offer huge discounts as an inducement for new customers, won't allow ex-customers those terms.(so I am told) It may well be that Eon will apply the same principle
    • Micron
    • By Micron 5th Oct 16, 1:37 PM
    • 16 Posts
    • 19 Thanks
    Micron
    I just cannot understand the benefit for suppliers with the new customer only tariffs, can someone please explain the logic of it all to me, below is my rather simplistic view about it.

    Taking myself as Mr Average if I were to become a new E.on customer on the Saver Fixed 1 Year v2 tariff my bill for the next year would be £830 E.on says they make 4.7% on residential customer bills so their profit would be £39

    According to the Cheap Energy Club energy suppliers pays them £60 for a new dual fuel customer, so in year one E.on would make a potential loss of £21 on every new dual fuel customer.

    Being an existing E.on customer the cheapest tariff available to me next year would give me a bill of £1125 giving E.on a potential profit of £53 but because of the disparity in the tariffs I will leave E.on (along with many others) so their profit from me becomes ZERO

    People might argue that the profit for the power companies will come in year two and onwards from their new customers but all these new customers are very savvy, next year when their tariff will increase nearly all will be off to a new cheaper supplier so ZERO profit for E.on.

    Surely this has got to be a lose lose situation for E.on? or is their 4.7% customer profit margin figure far from the truth?
    • Cardew
    • By Cardew 5th Oct 16, 3:25 PM
    • 26,078 Posts
    • 12,539 Thanks
    Cardew
    I just cannot understand the benefit for suppliers with the new customer only tariffs, can someone please explain the logic of it all to me, below is my rather simplistic view about it.

    Taking myself as Mr Average if I were to become a new E.on customer on the Saver Fixed 1 Year v2 tariff my bill for the next year would be £830 E.on says they make 4.7% on residential customer bills so their profit would be £39

    According to the Cheap Energy Club energy suppliers pays them £60 for a new dual fuel customer, so in year one E.on would make a potential loss of £21 on every new dual fuel customer.

    Being an existing E.on customer the cheapest tariff available to me next year would give me a bill of £1125 giving E.on a potential profit of £53 but because of the disparity in the tariffs I will leave E.on (along with many others) so their profit from me becomes ZERO

    People might argue that the profit for the power companies will come in year two and onwards from their new customers but all these new customers are very savvy, next year when their tariff will increase nearly all will be off to a new cheaper supplier so ZERO profit for E.on.

    Surely this has got to be a lose lose situation for E.on? or is their 4.7% customer profit margin figure far from the truth?
    Originally posted by Micron
    These days no company can lie and get away without being called to task. Albeit they can phrase statements that can be 'misunderstood'.

    Your assumptions are incorrect in the above quote. Eon have not said they make 4.7% profit on every customer's bill. On some bills they will be making a loss and on others way more than 4.7%.(20%??)

    Like all other companies they quote their profit margin as a percentage figure on the revenue raised. i.e. for every £1,000 collected their costs are £953 and profit £47.
    • bumpercars99
    • By bumpercars99 5th Oct 16, 3:51 PM
    • 46 Posts
    • 39 Thanks
    bumpercars99
    I just cannot understand the benefit for suppliers with the new customer only tariffs, can someone please explain the logic of it all to me, below is my rather simplistic view about it.

    Taking myself as Mr Average if I were to become a new E.on customer on the Saver Fixed 1 Year v2 tariff my bill for the next year would be £830 E.on says they make 4.7% on residential customer bills so their profit would be £39

    According to the Cheap Energy Club energy suppliers pays them £60 for a new dual fuel customer, so in year one E.on would make a potential loss of £21 on every new dual fuel customer.

    Being an existing E.on customer the cheapest tariff available to me next year would give me a bill of £1125 giving E.on a potential profit of £53 but because of the disparity in the tariffs I will leave E.on (along with many others) so their profit from me becomes ZERO

    People might argue that the profit for the power companies will come in year two and onwards from their new customers but all these new customers are very savvy, next year when their tariff will increase nearly all will be off to a new cheaper supplier so ZERO profit for E.on.

    Surely this has got to be a lose lose situation for E.on? or is their 4.7% customer profit margin figure far from the truth?
    Originally posted by Micron
    The benefit is in the mix of types of customer they have across tariffs. It means that they keep all those customers who can't be bothered to switch often (ie the profitable ones) and those who are price conscious will leave (mainly unprofitable ones).

    The new customers who join on the exclusive tariff are an unknown and likely a mixture of customers who will bother to leave afterwards and those who won't but overall, the proportion of less frequent switchers will be higher.

    Looking at profit margins for an energy company, customers who switch annually onto cheap tariffs through comparison sites with commissions must be a loss to the company so they're as well to be rid of them from a bottom line point of view. Maybe it's particularly shrewd, if you're a frequent switcher and you're so annoyed by this that you'll never go back to Eon or whatever, that's probably even better for them! The longer term impact of any reputational damage is a separate issue.
    • Micron
    • By Micron 5th Oct 16, 11:41 PM
    • 16 Posts
    • 19 Thanks
    Micron
    The benefit is in the mix of types of customer they have across tariffs. It means that they keep all those customers who can't be bothered to switch often (ie the profitable ones) and those who are price conscious will leave (mainly unprofitable ones).
    Originally posted by bumpercars99
    Overall I would have thought that there would have been a slight shift towards the more unprofitable customers, lose some profitable ones, lose some unprofitable ones, gain more new unprofitable ones.

    The new customers who join on the exclusive tariff are an unknown and likely a mixture of customers who will bother to leave afterwards and those who won't but overall, the proportion of less frequent switchers will be higher.
    Sorry I have to disagree, all of the customers gained on the new customer tariffs have come via a price comparison site (the only way to get the tariff) and as such are savvy and well aware of the energy suppliers tactics so 99% of them will most probably leave when the tariff ends, I still believe that all the suppliers offering the new customer tariffs have shot themselves in the foot profitwise.

    Looking at profit margins for an energy company, customers who switch annually onto cheap tariffs through comparison sites with commissions must be a loss to the company so they're as well to be rid of them from a bottom line point of view. Maybe it's particularly shrewd, if you're a frequent switcher and you're so annoyed by this that you'll never go back to Eon or whatever, that's probably even better for them! The longer term impact of any reputational damage is a separate issue.
    I can't argue with any of that, as for me I have said before that it would have to be an extra special deal from E.on for me to even consider ever going back, as a company I now see E.on as devious, untrustworthy and unfair, will my new supplier be any better, I doubt it but at least they will save me £300 over the next year.