Last week, Energy UK published its electricity switching figures showing that over 410,000 customers switched supplier in May.
At first glance, that looks like a big figure. But the numbers are 15% lower than in May 2019.
Should we be surprised?
We know that COVID-19 has hit UK purse strings hard, particularly those on lower incomes.
It’s understood those that have been in debt for longer than 28 days cannot switch provider. And legally, customers are obligated to pay off what is owed to a supplier before switching – which could rule out certain households right now.
But, for those who can pay, lockdown arguably would have been an advantageous time to review all household expenditure, consider our spending habits and find ways to save our pennies.
Data suggests we are making some financial changes as a result of COVID-19. In GWI’s latest coronavirus study, 28.7% of Brits are looking for cheaper versions of products from alternative brands.
But with a rise in our energy usage an inevitable part of staying at home, why hasn’t our approach of switching allegiance to products translated to reviewing our energy provider?
It’s not the first time we’ve debated this question. Back in September 2011, when the then, Energy Secretary Chris Huhne was criticised for implying people were “lazy” for not switching, articles discussed the psychology behind sticking with existing providers – especially in the energy space. Most notable suggestions include:
- People value their relationships and free time over theoretical savings;
- For many, it’s the old age saying of “If it ain’t broke, don’t fix it”;
- There’s mistrust in organisations that benefit from us switching (partly due to a history of misleading doorstep selling in the early days);
- There’s a lack of instant gratification from switching, compared to buying say a new TV, at 50% off.
To address instant gratification, consumer champion Martin Lewis encouraged organisations to stop talking about monthly bills and focus on annual savings. But the result was that – aside from clever campaigns involving meerkats and bulls to distinguish between brands – it doesn’t feel like much has been done to truly encourage a change in people’s habits.
So, what could we do differently?
Well, firstly we need to accept that simply knowing we can switch isn’t enough to encourage people to do so. To have the best chance of changing people’s habits, we need to inject insights from behavioural science into our communications.
Here’s three techniques we could apply:
- Aversion to waste. People don’t like waste, and often downplay the value of the things we waste. Yet if we make waste feel tangible, it can change our attitudes and behaviours. Here we can learn from efforts to increase recycling outside the home. In the #LeedsByExample project, campaigners put 180 brightly coloured bins – with recycling messages in a Yorkshire dialect – in the city centre. The project collected 1.2 million coffee cups, 160,000 plastic bottles and 140,000 cans in just over a year. How could we make the money we waste each year from not switching more quantifiable?
- Social norms. People have the intrinsic motivation to gain social approval and avoid rejection by others. For example, seeing those around us take part in physical exercise increases accountability, which is no doubt part of Strava’s success story with 19 million activities uploaded every week (as at February 2020). How could we celebrate switching as an everyday occurrence?
- It is easier to build upon existing routines than create new ones. For example, when people were asked to floss either before or after brushing their teeth, research showed that cues after brushing were more effective in encouraging ongoing flossing habits, because it followed on from their regular pattern of teeth cleaning. What existing behaviours around switching could act as contextual cues for us to tap into?
We know from sources such as Kantar that many people have tried new products and services for the first-time during lockdown and believe they will keep using them after the pandemic. But there is an ever-shortening window of time during which people will be abnormally open to trying new things. There’s no reason why switching shouldn’t be one of the new habits we form. Perhaps it’s just time to switch up how we communicate its benefits?