Doorstep Selling - NPower

MillicentBystander

macman wrote: »

Because it's vastly cheaper to run accounts online-both to set up and administrate. The customer does most of the work, including the meter reading.
Same with direct debit-it's cheaper because the cost of collection is minimal compared to cheque/cash etc.
You could just as well turn it around and say 'why should online customers pay more because some people won't use online accounts or set up direct debits'?
It's not about internet access. The majority of customers, whether online or not, are still on the standard tariffs and may have never switched suppliers at all. It's more about apathy.

I would definitely dispute the word 'vastly'. My point has always been that the large difference in the price of online accounts compared to standard accounts can in no way be put down wholly to what the energy supplier is saving in admin. If it can, then surely it highlights how inefficient their systems are. The difference on average consumption tends to hover around £300 per year. Are you seriously telling me that the energy supplier saves £300 per year on an online account holder as opposed to a standard account holder? That's £25 per month. My belief has always been that the supplier's encumbent standard account ounters are funding their efforts in getting to the top of the switching sites with their constantly changing online tariffs.

backfoot

macman wrote: »

Because it's vastly cheaper to run accounts online-both to set up and administrate. The customer does most of the work, including the meter reading.
Same with direct debit-it's cheaper because the cost of collection is minimal compared to cheque/cash etc.
You could just as well turn it around and say 'why should online customers pay more because some people won't use online accounts or set up direct debits'?
It's not about internet access. The majority of customers, whether online or not, are still on the standard tariffs and may have never switched suppliers at all. It's more about apathy.

I like a lot of your posts macman, but I disagree with a lot of the above.

Energy Companies have customer service and billing systems which are common platforms for all their customers. There is no significant differential in operating different classes on these systems.

Submitting online metter readings may have a small impact but for a quarterly billed customer it really will be a marginal cost.More often than not they produce estimated readings.

I would also question the size of the percentages attributed to DD discounts. Also if you notice, Npower now use the DD discount as a loyalty bonus/penalty for switching.

The costs of aquisition are really a choice for the Supplier. They are a general overhead and shouldn't be attributed to a certain method.
Otherwise the argument I have made is even stronger.

'I would like to offer you a fantastic deal today, but it is more expensive because it has to cover my costs of travelling around and my time selling it to you.'

Where I do agree, is that the huge differential in price is a manipulation of the Customer base by effectively using apathy,lack of knowledge,fear, no internet access to fleece the unwary.

Remember, that the major cost is still the buying of electricity and gas, and the Distribution Cost associated with it. That remains the same whether you are billed on a standard tariff or on an online one.

That apathy or whatever else causes it, doesn't make it right.

The main argument here is more about the practice of doorstep selling and whether it is inherently flawed by touting a more expensive product than the Company itself offers.

davidgmmafan

This is really interesting. On the one hand I would guess there are significant differences in cost with online accounts being cheaper to run. I would imagine they contact suppliers less on the whole than people who aren't on an online tariff. At least some of the price difference between online and offline is direct debit discount which most suppliers have.

Some people won't have these, for perfectly valid reasons.

I'm not really sure what the solution is, it'd be very difficult to get a sales person to talk someone out of the product they were selling. Putting it another way you wouldn't expect the betting shop manager to take a punter to one side and explain to him that mathematically if he gambled for long enough he could not win would you?

To be honest I'd settle for stopping them telling outright lies to get business, they all do it, and nobody seems to be putting a stop to it. Once there's some significant progress made on that then we can look at some ideal selling practice. Fire fighting is needed first.

Maybe Consumer Focus could have a go and once again show Ofgem up?

Parva

Doorstep energy supplier: "Hi, would you like to save money on your energy bills?"
Me: "No thanks", door slams shut

Don't entertain the doorstep donkeys for 1 second! The sooner that this shoddy practice is outlawed the better.

backfoot

The main thrust of my thread was to highlight the hypocrisy of doorstep selling by showing that the companies themselves have cheaper products.

However,picking up on your points:

davidgmmafan wrote: »

On the one hand I would guess there are significant differences in cost with online accounts being cheaper to run. I would imagine they contact suppliers less on the whole than people who aren't on an online tariff.

Why significant? I would say marginal. Why do they contact them more than online tariff people? I would suggest the opposite,those that are online savvy tend to be more proactive.

Putting it another way you wouldn't expect the betting shop manager to take a punter to one side and explain to him that mathematically if he gambled for long enough he could not win would you?

Not a good analogy as you have compared an essential commodity, affecting poor,old and vulnerable people with the purely optional speculative aspects of gambling.

To be honest I'd settle for stopping them telling outright lies to get business, they all do it, and nobody seems to be putting a stop to it. Once there's some significant progress made on that then we can look at some ideal selling practice. Fire fighting is needed first.

Maybe Consumer Focus could have a go and once again show Ofgem up?

They are already involved in this and monitoring goes on. Such incidents of misselling or attempted misselling should always be reported to put an end to this miscevious and unnecessary practice.