In 2014 Ofgem commissioned a report carried out by BMG Research Ltd into how micro and small businesses engage with energy markets. The report focused on this demographic as they would be most affected by reforms resulting from the Retail Market Review (RMR), which were designed to make the market simpler and clearer. 1,502 telephone interviews were carried out between 29th September 2014 and 25th November 2014, and results are now in.
These are a summary of the findings:
The key finding in support of the RMR reforms is that overall engagement with energy contracts, awareness of contract details, comparing prices and the ease of switching energy suppliers have all improved since the last survey in 2013.
Since 2013 customer retention has also risen from 35% to 40%. Of those non-switches, 60% said they were satisfied with their plan. The rest may be unable to switch thanks to Fixed Term Energy Plans, which now account for 92% of all existing plans.
For those businesses looking to change contracts, 26% of businesses cited brokers as the main source of information when researching a new energy plan. This rose to 37% for companies with 10 to 49 employees.
Brokers also faired well where professionalism was concerned, with 61% of the survey scoring brokers the highest on having a professional tone. There are mixed views when it comes to broker fees, however, and how upfront they are. But 92% of those charged were aware of charges before using the service and 68% of companies using brokers believed the fee to be an appropriate level.
Likewise the majority of businesses that use brokers are satisfied with them; with 81% of users satisfied overall. However, the perception of brokers among businesses is more negative than positive and has declined since 2013. This perception of brokers is likely down to the high levels of unsolicited broker contacts and doesn’t represent the general view of businesses that have used brokers in the past.
Overall the report shows that while there are improvements still to make, the new reforms (and the energy suppliers and brokers working towards them) are making a positive impact on the energy market for micro and small businesses.