Only 44% of Co-Op customers promise to stay with Octopus

Octopus Energy chief executive Greg Jackson has talked about the challenges of integrating the 300,000 customers the company acquired from Co-Op Energy in August.

Speaking at Utility Week Congress last week, Jackson said that four customer books had already been migrated onto its Kraken billing and customer service software, with a further three to be completed before the end of the year.

In a “show of complete transparency” the company has this month sent letters to Co-Op customers asking them about their intentions.

Jackson said: “We sent them a form giving them various options – such as are you going to stay with Octopus, are you going to shop around, are you going to stay to see if we deliver reasonable value. Only 44 per cent said they will definitely stay so we have to work hard to retain the rest.”

The huge loyalty towards the Co-Op brand was always going to make the transition a challenge, Jackson admitted.

“Co-Op has a great brand heritage and it’s really embedded in the UK psyche. If you look at the data from price comparison sites, even if there’s no price saving, people will choose Co-Op over other brands because of how close it is to people’s hearts.”

With several big deals or mergers going through, including Ovo’s acquisition of SSE’s retail arm, it shows the “importance of big book migrations”, Jackson said.

“Perhaps the next stage of the evolution of the UK energy market is for companies to learn how to consolidate rapidly and not create legacy problems of the future.”

On the impact of these legacy problems on the established suppliers over the years, Jackson said: “I feel very fortunate that we were founded in the last four years so we don’t have the legacy problems to deal with.

“That allowed us to, from the start, build the company around the customer and make that our USP.

“If you look at what other companies really struggle with, you hear CEOs spending their time trying to glue together 20 different systems. And every time they make an acquisition that’s another five systems they have to bring into the mix. If you come from a tech background, the one religion is that it’s this one system. You cannot allow yourself to get into a situation where you have lots of different systems just cobbled together.”

Last week, Good Energy became the first of Octopus’ UK rivals to buy its Kraken system.

Talking about the evolution of the platform, Jackson said: “In energy, almost all the systems have grown out of billing platforms. They’re essentially invoicing systems. Yet, if you ask people what their biggest challenges are, they’re very likely to say it’s building great customer service. If you build around the customer rather than a finance function in your business, you’re more likely to achieve that goal.

“If you look at the amount of data Facebook deals with – they are handling more per day than the UK energy system does per year, so a lot of the things we look at as being difficult have actually been solved elsewhere years ago.

“The real challenge is how do we move the technology that has been successful in those sectors into energy? So, we’re not trying to tackle those problems ourselves – we’re taking other people’s solutions which leaves us to focus on the real challenge, which is getting to net-zero.”