Here's an idea for energy companies

Mulder00

Is it just me that sees the opportunity here for energy companies to drastically increase their revenue?

With the recent news of price increases, all that is needed is for one company to say that they will drop prices. That in itself will generate enough news for consumers to become aware and switch to this company. Sure, profit margins might be smaller if you drop prices, but if you can increase your revenue enough, a smaller profit margin doesn't have to mean smaller profits. Having a squeeze on margin is also good as it would mean that the company would have to become more efficient. And efficiency should be a good thing

Sure if you are the energy company that comes out to say that you will be dropping prices, or not increasing them for a set period (rather than the government having to force you to do that), you would see a massive increase in the number of customers? (Or is there some competition rule here that won't allow them to grow their market share too much??)

Biscuit_Tin

Mulder00 wrote: »

Is it just me that sees the opportunity here for energy companies to drastically increase their revenue?

With the recent news of price increases, all that is needed is for one company to say that they will drop prices. That in itself will generate enough news for consumers to become aware and switch to this company. Sure, profit margins might be smaller if you drop prices, but if you can increase your revenue enough, a smaller profit margin doesn't have to mean smaller profits. Having a squeeze on margin is also good as it would mean that the company would have to become more efficient. And efficiency should be a good thing

Sure if you are the energy company that comes out to say that you will be dropping prices, or not increasing them for a set period (rather than the government having to force you to do that), you would see a massive increase in the number of customers? (Or is there some competition rule here that won't allow them to grow their market share too much??)

Ever heard the saying, turnover is vanity, profit is sanity? :cool:

As most energy companies only make about a maximum of 5% profit, there's not much room to cut profits and still stay profitable is there?

How many extra customers do you think a supplier would attract if the annual saving was only about, say £10???

The vast majority of customers have never changed supplier and are langusihing on their suppliers standard (expensive) tariff, where for the average customer, there is a potential saving of about £300 a year to be had.

sillygoose

Pile em high and sell em cheap doesn't seem to interest the energy companies does it? I suspect a large low-profit customer base gets eaten into by the need for bigger overheads, more computers, more customer service staff and so on.

As Biscuit Tin points out, the suppliers are probably quite happy for the bargain hunters to jump ship, its the "don't know any better's" and "can't be bothered's" that are languishing on very profitable standard tariffs they want on the books, profits are higher and they can easily reduce overheads to match the customer base - I don't suppose their staff are on very secure contracts.

It's self preservation, profit margins (on any size turnover) pays dividends, dividends mean happy shareholders, happy shareholders keep CEO's and Boards in mega high paid jobs as long as they feel no one else could milk us harder.

sk240

I certainly bet thet EDF are rubbing their hands together with their 2017 fix, i know 2 other prople who have swithched from BG to EDF

wakeupalarm

What happens to the customer service when millions of new customer suddenly join. Customer service at the energy companies is abysmal at the best of times. They would have to increase customer service numbers leading to increased costs, no energy company is going to absorb these cost so will just increase prices once again. Competition in the energy market has failed that is the problem.