Around half of us have never switched energy company. Most non-switchers are with one of the ‘big six’ energy companies, paying more for power from oil, coal or fracked gas. Could we motivate non-switchers to switch to do good instead of profit?
Switchers and non-switchers
Why do people switch? And why do so many people not switch? For people who do switch, it’s about price, which you’d expect.
People who haven’t switched are much more interesting - knowing that they’re overpaying doesn’t make them switch.
Non-switchers don’t see much benefit of switching, and they perceive that researching, understanding and switching takes a lot of effort. True, the mechanics of switching is easy, but they’re right that it requires a level of commitment to learn to understand energy companies well enough to make a decent comparison.
15% of people switch often - every year - but the rest don’t. Small, green energy companies have used this insight: most people just don’t want to bother switching regularly - so these companies give them a good tariff that stays good, and don’t hike the price after a year.
Non-switchers come from all backgrounds - your income or status won’t affect how likely you are to switch or not switch
A community-benefit approach to switching
With that in mind - price doesn’t appear to influence non-switchers, they don’t see the benefit, and they expect it to be really difficult - we tried out a different approach.
We tested working with schools to try and encourage non-switching (grand)parents to switch to green energy - not to save money, but to raise money for their school.
- school raise funds from the commission on every switch
- families help the school
- Co-op takes part of the commission
Our two big assumptions
1. There’s value for the schools to recruit parents. We emailed 50 schools and 25 parent teacher associations inviting them to raise money with us. We tracked the emails and could see around half the emails being opened, but didn’t hear back from any. Granted, it was nearing the end of term, and many of the email addresses where generic, but it didn’t look promising.
2. Helping a school is compelling enough to make people switch. We also spoke to five parents of school children about their attitudes towards their energy providers. It was a chance to learn about them and what’s stopped them switching in the past.
Everyone thought switching would be a hassle
And rightly so. Some companies can be slow to pay out if you leave in credit.
I’ve just got it in me head that it would be a bit of a faff.
Obviously you could be in debit, having to owe British Gas, before you even with go with a new supplier.
It just gives me shudders. I just think it would be a nightmare.
You remember the old days when you moved phone, you ended up on hold for ages, it was a faff.
‘Much of a muchness’
There was little differentiation between the various energy suppliers, and less hatred of the big six than our previous research suggested. Generally if people were with one of the big six, and they hadn’t had a problem with them, they trusted them.
I think it’s easier just to go with British Gas and negotiate. That’s what I’ve always done.
I’ll go with Eon. We have been with British Gas. This is just because it’s familiar rather than actually being…
People were content to be overpaying
It reminded us that we’re not all rational economic actors. Despite knowing there was cash to be had, these individuals were not motivated to take action.
Scottish Power were the providers when we got there. I seem to remember I had a look at the time and I couldn’t be bothered to look any further.
It is yeah but it’s the reward ratio, how much I’d have do. I’m lazy.
I’ve no doubt we could get it cheaper.
Switching for a school was more appealing to the individuals
Take this with a pinch of salt, we’d paid them an incentive for the research. The real test would be to get a fundraising campaign up and running. That said, all the participants thought this idea sounded good.
I’d probably be a bit more inclined to do that then take the £25 myself.
I think it’s telling you, change and we’ll help raise money for your school.
One participant told us how their school raises money in a similar way. For every online purchase a family makes, the school gets a bit of cash. Interesting.
It’s a really good idea. We do something similar at the moment. If you shop online, you go through a certain platform and the school gets money. It’s heavily used.
I reckon half of the 90 sets of parents used it. It was a success.
Good first impressions of Ecotricity and Good Energy
While no one had heard of a green energy supplier, when they had a look at their websites, everyone was impressed. One person loved the idea of the energy coming from 100% renewables. Given they were currently all on standard variable tariffs, switching would also save them money.
Ecotricity: I like the name. It makes me think it’s not all coal fuelled.
They wanted someone to do it for them
It was clear the perceived nightmare of switching was the biggest blocker.
If someone physically put it in front of me and said we’d do it for you.
I would be happy to switch providers if someone could do everything for me. Literally take it all for me.
…it needs to be like, do it for me.
I want you to say - [S], I know who your energy provider is now, it’s just going to change, nothing else will change.
I worry that I’d have to spend 10 hours on the phone to sort it out.
I just think my time is precious. It’s just going to be a ball ache.
Like will they ask for things like how many kilowatts… units of energy… how many… how much you pay exactly.