'Power suppliers must work harder to attract customers'

20 June 2001
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21 June 2001 | Robin Parker

Energy suppliers need to be more proactive in approaching potential customers and communicating the benefits of adopting their services, a new report has warned.

Market analyst Datamonitor's survey, Selling Power and Gas to Major Energy Users in the UK, discovered that most gas and electricity purchasers wanted to switch suppliers in the last contract round, but many could not find a good enough deal.

The largest group of these so-called "twitchers" was found in the 100kW-1MW mid-tier sector, where they made up 43 per cent of all the purchasers in the sector.

Lack of competitive pricing was the most common reason for not switching, and buyers complained that services were often not tailored to their needs. The report also identified widespread resentment of protracted negotiations with often uncommunicative suppliers.

The findings were to be expected, said Martin Rawlings, deputy chairman of CIPS's energy committee. "Suppliers have been cherry-picking for years. As a purchaser, you either fit their portfolio or you don't."

An increasingly competitive market has made life harder for purchasers, he added. "We're all forced to look at our bottom lines and suppliers have gone through a rationalisation process as well."

Nearly half of electricity buyers and a fifth of gas buyers would consider signing with a pan-European supplier, the report said. However, variable market deregulation and the difficulty of organising central purchasing were cited as obstacles.

"The demand is there," Rawlings said, "but the market is not ready. It will be at least a couple of years until Europe is deregulated and France, especially, has moved to liberalise the market."

Datamonitor interviewed purchasers with responsibility for more than 250,000 electricity sites and 65,000 gas sites across the UK.

SMjun2001

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