Face-to-face energy switching sees a resurgence

Face-to-face energy switches saw a resurgence as smaller suppliers reacted to the removal of a requirement for price comparison websites (PCWs) to show a wider range of tariffs.

Research from Cornwall Insight shows a 38 per cent increase in the number of face-to-face sales, reaching 1.1 million switches in the year to 30 September 2019.

Face-to-face selling can be facilitated through door-to-door sales and at events where representatives from the supplier will be present.

Challenger brand Bulb is one such supplier understood to be trialing face-to-face sales.

Telesales have seen a similar boost though at a much slower pace, rising 7 per cent to 1.6 million switches a year.

New regulations to control direct energy sales were implemented by Ofgem in 2009, resulting in a decline in face-to-face selling as many suppliers stopped using these methods.

But Hannah Treacy, an analyst at Cornwall Insight, said the removal of the whole of market requirements for Ofgem-accredited price comparison websites (PCWs) has meant that smaller challenger brands without commercial arrangements with PCWs have had to find alternative routes to market.

Treacy added: “One of the advantages for suppliers who opt to use this channel is that the benefits of the supplier can be explained more fully to the customer. This allows expectations to be managed upfront before the switch takes place and in turn, should lead to a better supplier-customer relationship.

“Although the intermediated channel, which includes PCWs and collective switching remains the most significant route to market for suppliers, the recovery of the direct sales channel demonstrates the attractive opportunities it provides for suppliers.”

The research also found that technology has enhanced face-to-face selling by offering better control of the sales agent’s conduct, allowing them to target potential customers better and allowing quicker access for comparison of a customer deal.

Advances in technology however also increase the consumer’s ability to compare tariffs for themselves.

Between 2008 and 2010, five investigations were opened into the conduct of suppliers over face-to-face selling, including four of the big six.

These resulted in Ofgem imposing fines or financial penalties for breaches of the licence conditions governing face-to-face sales (including doorstep selling) and telephone sales.

Responding to the research Rik Smith, energy expert at Uswitch.com, said: “Suppliers who are returning to doorstep sales tactics are less likely to work with intermediaries such as price comparison websites. Nevertheless this is further evidence of an intensification of competition in the market, as energy companies seek to reach consumers in whatever way they can.

“Doorstep selling can reach people who might not otherwise switch, particularly if they don’t have access to or are less confident using the internet. However, the concern with doorstep selling has always been that it’s harder to monitor things like sales tactics, to know whether or not people are being offered the full range of tariffs from a supplier, or whether particular groups of consumers are being targeted.

“If someone has chosen to run a comparison online or over the phone, they’re in control and can compare suppliers on a range of factors, including price, eco-credentials, customer service, and account management options, making a choice based on the factors which are important to them personally.”