Npower takes aim at medium businesses

Npower has launched two new products in a bid to become a key player in supplying mid-range businesses.

The CBI said this group of businesses, with turnovers of £10-500 million, accounted for 22 per cent of the country’s revenue and 16 per cent of total employment. But Npower’s Jon Davies said they were a “forgotten army” between the small and medium sized business sector and major organisations.

He said almost all companies in this group were on fixed-price contracts, renewed annually. Research by Npower among firms in the sector found that they ranked energy as their second highest business concern. But companies bought entirely on price, and the research found they “don’t think they have the time or inclination to think about anything else”, Davies said.

Npower hopes to get companies to take a more active approach with two new products.

“Pricewatch”, aimed at companies using between 200MWh and 10GWh of energy per year, builds in market price alerts at trigger points agreed with the company. The idea is that those customers can renew their contract at a time when the price is beneficial, rather than under pressure at the end of a contract period.

“Direct Budget Management”, aimed at customers in the 10-50GWh usage range, would educate the customer on market fundamentals and help develop a strategy – taking account of their risk appetite – that would govern flexible buying. Npower would buy energy according to the strategy.

Davies said it was not yet clear what the appetite would be for the new products – which he said could be part of energy brokers’ offerings. For Npower, the benefit would be increased customer loyalty and the opportunity to enter contracts lasting two to three years, instead of annual contracts.