Are loyal energy customers LEGALLY penalised by their suppliers?

BigAl99

E.ON_Company_Representative:_Brian wrote: »

...when switching automatically from a Price Protection tariff to a Price Protection Renewal when the original tariff ends. The renewal tariff will not contain any cancellation charges so a customer would be free to shop around if they wanted, without being penalised.

...Small problem is - you don't tell them that they can start to shop around and you don't tell them that you can in fact offer a cheaper tariff yourselves. You bide your time and collect the money. Sending letters with fineprint terms and conditions is not the same thing as sending a letter with price lists, the names of new cheaper tariffs you offer and the mechanism to switch.

brewerdave

BigAl99 wrote: »

...Small problem is - you don't tell them that they can start to shop around and you don't tell them that you can in fact offer a cheaper tariff yourselves. You bide your time and collect the money. Sending letters with fineprint terms and conditions is not the same thing as sending a letter with price lists, the names of new cheaper tariffs you offer and the mechanism to switch.

Totally agree Big Al - for example the "offer" that SP made me last August (I'm one of the "lucky" ones who actually received an email!) was to transfer me on to just about the most expensive "equivalent" tariff they could offer - compared with the tariff I'm now on, it would have cost me over £350 per year more !!!!!!
EON rep.Brian, I'm sure that you believe that you are "helping " customers by moving them at the end of one tariff on to one with "similar" t & cs, but no exit penalty .... but at what cost???:eek:

BigAl99

molerat wrote: »

With E.ON you just change tarriff on line, Your Account > Switch Now. It is done instantly.

This is true, but it much more satisfying (and useful) to do the same thing by phone and tell the sales person at the other end that you incidentally also want to formally complain that Eon haven't pro-actively told old customers that they could do this, and that there was a better deal available from Eon itself.

I have done so today. If enough existing customers do this (especially as a result of reading this thread), then perhaps Eon will get the message, lead the way, and be a shining example of good practices for other energy companies. Good Lord, they may even win more business from it.

Act today - don't wait for the end of your quarter.
...and ask them if they can reward your loyalty to Eon by actively telling you when they have cheaper offers

...And reply to this thread if you have done so, too. (thanks in advance)

BigAl99

And here is an open challenge to Eon:

I hereby formally challenge Eon to commit henceforth to pro-actively telling their own existing customers when Eon are providing a better deal than their own existing customers already have with Eon. And not just to do this once, but make it part of their policy and practices.

If they take up this challenge, then they should loudly proclaim this fact in their advertising.
If they don't, well then frankly I believe them to be guilty as charged.


P.S. The headline slogan can be something simple such as "We reward our loyal customers by actively telling them when we have cheaper offers"

Plushchris

BigAl99 wrote: »

I have done so today. If enough existing customers do this (especially as a result of reading this thread), then perhaps Eon will get the message, lead the way, and be a shining example of good practices for other energy companies. Good Lord, they may even win more business from it.

Perhaps, but I wouldnt start holding your breath if I were you..


What kind of business model would it be to ensure every one of your customers is giving you the least profit possible?

If (and thats a big IF) E-on did ever start doing that, then I'm fairly sure all their prices would go up to compensate for it and they would probably be one of the most expensive suppliers in the market.

BigAl99

Plushchris wrote: »

What kind of business model would it be to ensure every one of your customers is giving you the least profit possible?
If (and thats a big IF) E-on did ever start doing that, then I'm fairly sure all their prices would go up to compensate for it and they would probably be one of the most expensive suppliers in the market.

The same business model as I described earlier. The one that relies on getting more customers who see a better deal.

100x10p is more than 10x50p

It is the business model that the most successful retail outlets (eg. Tesco) and service industries (eg. Quikfit insofar that it provides added value) use.

It even has a colloquial name : "Pile them high, sell them cheap" (apparently the motto of Jack Cohen, who founded Tesco)

And I'm pretty sure that Tesco is not the most expensive retail outlet, either.

...but perhaps you are right, and we will have to wait until Tesco start selling energy in bottles as I jokingly suggested earlier.

BigAl99

Look - if the "energy tariff" industry are really relying solely on customer inertia to generate their profit, then ultimately they will fail to realise that profit.

The Internet and eventual customer enlightenment will see to that, just in the same way that the business model used by the music and film industry is slowly being overturned by exactly the same toolset - the Internet. At some point they will have to abandon an inertia business model. So maybe I am just asking them to be progressive.

(In fact this is true for all "tariff" industries that rely on the inertia model - as inertia decreases, so will their profits - so they all aught to start rethinking themselves as bulk service providers and start learning from Jack Cohen)

BigAl99

But here is yet another thought:

Energy tariff brokerage. People who make it their business to provide customers with the cheapest tariffs for all tariff-based utilities, at a small fee, using automated computer technology.

There - I have "painted the devil on the wall" (as the Germans say). Tariff industries take heed!


(but to be honest, that is what I thought the likes of E-On, N-Power et al were supposed to be, when the energy industry was denationalised)

Plushchris

BigAl99 wrote: »

The same business model as I described earlier. The one that relies on getting more customers who see a better deal.

100x10p is more than 10x50p

It is the business model that the most successful retail outlets (eg. Tesco) and service industries (eg. Quikfit insofar that it provides added value) use.

It even has a colloquial name : "Pile them high, sell them cheap" (apparently the motto of Jack Cohen, who founded Tesco)

And I'm pretty sure that Tesco is not the most expensive retail outlet, either.

...but perhaps you are right, and we will have to wait until Tesco start selling energy in bottles as I jokingly suggested earlier.

Not really a fair comparison, Tesco must have many thousands of lines of products, some of which they sell with minimal profits, some of which they no doubt sell as "loss leaders"

But for every line they sell with minimal profit there are probably ten with a high mark up.

The energy industry is different, there is only one product to sell (or two if its dual fuel) and to have every customer on the cheapest tariff possible wouldnt make sense.

Cardew

The bottom line is that all of the Utility companies are buying basically the same product(gas and electricity) from the 'wholesaler'(the generating companies). Even those companies have a link with the generating company e.g. British Gas/Centrica are not allowed to get their gas/electricity cheaper.

Despite all the claims of buying ahead, efficiencies within the company etc the profit margins in percentage terms are tiny compared with other 'retailers'. BG make 2% currently and in years gone by made a loss.

The simple fact is that if any company put all their customers on their cheapest tariff they would have to raise that tariff to an uncompetitive level. They have to rely on some customers paying higher prices on both 'unrestricted' and expensive fixed/capped tariffs to 'subsidise the cheaper tariff customers.