Shane Preston, Head of Utilities at AMT-SYBEX, shares our latest thinking on the recent crisis in the energy market and how ‘small’, ‘medium’ and ‘other large’ suppliers* can not only stay afloat, but also win new customers in a fast-changing and hyper-competitive marketplace.
Having emerged from a rollercoaster series of pandemic lockdowns, into a period of intense upheaval for the energy industry, small, medium, and other large energy suppliers have an opportunity to invest in optimising their business to secure their future growth.
Our industry is in flux. Spiralling gas prices have triggered a rush of energy company collapses, with nine suppliers folding in recent weeks and potentially more to follow. Take a minute to consider these jaw-dropping industry statistics:
- Since January 2019, 57 energy companies are no longer trading, of this group 37 have gone bust
- 3.5 million customers have been switched to new suppliers via Ofgem’s 'supplier of last resort' scheme
- Since the beginning of 2021, wholesale gas prices have risen by 250%. Prices have jumped 70% since August alone.
Concerned industry leaders are facing a mounting crisis during the winter months and household consumers are being beset with warnings of a spike in their energy bills over the winter, prompting urgent talks between Ofgem and energy suppliers.
And it’s not just energy costs that we need to worry about. Global pandemic and energy industry volatility aside, our planet is in trouble. Our daily news and social channels are dominated by environmental impact stories and escalating concerns for a climate in crisis. These changes are happening on our doorstep – all ten of the UK’s warmest years on record have taken place since 2002.
Amid the current disruption, what other trends will it pay small, medium, and other large energy suppliers to prepare for?
‘Switched on’ consumers
Amid energy price cap and environmental concerns, today’s consumer is more informed and expects more from their energy supplier than ever before. We want clear and simple breakdowns in our energy bills and seamless online transactions. We also don’t want to pay over the odds – Martin Lewis’s, Money Saving Expert Cheap Energy Club has over four and a half million members, all looking to get the best rate for their home energy use.
And so, as expectations for excellent customer service continue to rise, providers with a reputation for being difficult to reach will have fewer places to hide from the social media spotlight, which offers up a litany of disgruntled customer reviews at our fingertips.
The need for suppliers to keep their customers happy is greater than ever before. And while this is key, to grow you also need to attract new customers. In a crowded marketplace, this means you need to do something different and meaningful for your customers – such as offering energy tariffs which allow customers to automatically charge their electric vehicle offpeak when energy is cheapest.
UK’s net zero ambition
Another key driver for innovation in the energy market is the UK Government’s net zero ambition. Its long-awaited Energy White Paper presented a vision of how the UK can make the transition to clean energy by 2050. This involves increasing transparency across the UK's energy network and keeping bills affordable by enabling people to switch quickly and easily to a cheaper energy tariff. Its plans also include a new smart meter obligation for suppliers, due to kick-in in January 2022, which will set annual installation targets.
A new wave of data
One of the biggest pieces of the infrastructure puzzle needed to deliver the government’s vision is smart meters, which put customers in charge of their energy use, helping them to save money and reduce their emissions. Recent research shows that installations accelerated once Covid-19 restrictions began to lift – 974,800 smart meters were installed in domestic properties in Q4 2020, up 14% on Q3, and a total of 3.2m smart meters were installed last year, mostly by larger suppliers (more than 250,000 customers).
As these trends start to align, there’s never been a better time for suppliers to engage householders with the benefits of having a smart meter installed.
Smart meters matter
Getting closer to your customers and understanding their needs has always been the key to customer longevity, which for suppliers can ultimately translate into the difference between profit and loss. Smart meters can deliver this customer insight, but it comes in the form of swathes of data that all needs processing, and any discrepancies in this data can cost suppliers in lost revenue.
Suppliers need reliable, hard-working systems to manage this wealth of customer data – systems that communicate and share data automatically and without interruption. This is where AMT-SYBEX can help. We make the complicated simple, allowing you to focus on delivering the best service for your customers.
Informed by our expert knowledge of the market and its challenges, each of our products is designed to overcome a complex industry problem and can be tailored to your unique business environment.
A safe pair of hands for your data
For smart metering data management, our trusted solution – Meterflow – provides a platform to store smart meter events, such as half-hourly readings. It keeps this information separate from your billing system, so it can focus on doing the job it was designed for – billing your customers accurately and on time. Meterflow has been benchmarked by Oracle and IBM to 100 million meters for data load, validation, estimation and billing preparation proving that it can cope with the huge data challenge that smart metering is presenting to utilities globally. It also offers a detailed technical view of all equipment installed at an individual premise, which means you’re best placed to address any issues before they impact your customers.
Empowering you with industry interaction
Our flexible market interaction management solution – Marketflow – simplifies how you share data with the market and provides the flexibility you need to cope with ongoing industry change. It does this by taking large volumes of information from multiple sources, then coordinates the data journey across the market, in line with regulatory requirements. This makes switching supplier a seamless experience for customers as our systems ensure this data is more accessible, verifiable, and accurate. It also integrates with multiple different billing and industry-specific systems.
Protecting against revenue leakage and unnecessary costs
Anticipating our customers’ future needs is second nature to us at AMT-SYBEX. Optiflow is a new service we’re launching, designed to optimise areas of your operations by using business and industry control points to monitor and identify revenue leakage and value chain optimisation – essential in today’s volatile market.
Helping Marble Power win new customers
We recently supported Marble Power to move seamlessly to our Marketflow platform. Marble Power is now able to win new customers, by offering a much smoother switching experience that automates complex processes during customer onboarding. As well as lowering the risk of manual errors, this use of automation has delivered efficiency savings for Marble Power within the first three months of use, equal to one full-time member of staff.
More importantly, with Marketflow’s powerful data visualisation tools, Marble Power can immediately see any process failures or delays caused by incompatible data or failed registrations and address them before a customer becomes aware of them.
“AMT-SYBEX’s project management team was flawless, and the migration was painless and much faster than we anticipated. Our customers didn’t notice a thing and, for me, that’s the pinnacle of success.” Chris Webb, Chief Operating Officer at Marble Power
Looking to the future
We’re committed to combining our deep understanding of our industry with our passion for solving the complex challenges suppliers face. As our industry undergoes a great deal of change, we’re exploring new and innovative ways for suppliers to protect their revenue.
If you would like to discuss how our solutions could support your innovative customer projects, please get in touch.
* Ofgem classify suppliers by size as follows:
- ‘Large legacy’ includes suppliers which have held a market share of at least 5% in either fuel since privatisation of the electricity and gas sectors
- ‘Other large’ includes suppliers with market share of at least 5% in either fuel, having increased market share from below 5% at the time of privatisation
- ‘Medium’ includes suppliers with market share exceeding 1%, but remaining below 5% in both fuels
- ‘Small’ includes suppliers with market share below 1% in both fuels