02.Dissatisfaction with energy retailers
CHOICE surveyed 1020 household
decision-makers in July 2012 about their views
on energy companies and discovered a
low level of satisfaction with the industry
across the board.
The majority of survey
participants who rated their retail
providers were less than impressed when
it came to value for money, customer
service, helping them understand
how to reduce usage, or keeping
them up to date on key issues such
as electricity prices.
In all those
categories, 25% or less of the
respondents rated their provider
as “very good” or better.
Retailers who stood out from
the pack included TRUenergy,
whose customers gave the
company a significantly higher
rating than those of other
providers for keeping them
informed on key issues such as
prices; and Synergy, which was rated
significantly lower than others when
it came to value for money. (This rating
was likely influenced by particularly
sharp price hikes following adjustments
in long-standing government subsidies for
WA residents and Synergy customers on
the South West Interconnected system,
who have no other choice of retailer.)
It’s no surprise, then, that
dissatisfaction with their previous
company was the second-most frequent
reason cited by survey participants who
had switched in the past three years.
Among the reasons for switching, the
most common, though, was the lure
of cheaper rates.
Unfortunately for consumers, our
survey findings suggest the rate chase
is an endless and ultimately futile pursuit.
One respondent summed up the attitude
of many: “I am lost as to know who to
use for electricity. They all have different
offers, but the bills end up the same.”
Myth buster
Our survey results also undercut what
has become an article of faith among
energy retailers in Australia and beyond
– that the unregulated market in Victoria
is a model of competitiveness and
customer value, since churn rates there
are comparatively high. According to the
most recent World Energy Retail Market Rankings by the energy think tank
VaasaETT, switching rates in Victoria
last year were the highest of the 38
international markets tested, at 28%,
and, historically, the highest on record.
Residents of Queensland, NSW and SA
were also among the top 10 most-frequent
switchers in the recent rankings.
But all the switching in Victoria may
not have left consumers any better off. In
our survey, Victorian consumers didn’t
rate their providers significantly higher
than other states in most of the key areas
we asked about, including value for
money (Victorian retailers did, however,
perform better than average when it
comes to keeping customers up to date
on issues, including prices). And in an Ernst & Young survey of 620
electricity customers across Victoria,
NSW and Queensland, 47% of those
who said they were ready to switch gave
up on the process after the initial search
for information because the time and
effort involved didn’t seem worth it.
Revealing responses
Our survey results suggest
that many consumers are
looking for a better deal but
find it hard to know whether they've found one.
- 44% of 413 survey
participants who had joined
their electricity retailer in
the past three years felt they
had compared all available
options before choosing an
energy provider, and only
52% of the 413 were
confident they had made
the best choice.
- 24% of those who switched
from another retailer said
one reason was because
of offers from telephone or
door-to-door salespeople
– the third-most frequently
cited reason.
- 55% of the switchers who
responded to a direct
marketing offer were not
confident they made the
best choice.
- Five per cent of those who
switched said the sales
staff switched their provider
without their permission.