Case Studies

Client Issue
Ofgem Impact of different tariff comparability models on consumers’ ability to compare tariffs

In 2011 Ofgem published findings and initial proposals from its review of the retail energy market. This showed that one of the key factors underpinning consumers’ reluctance to switch between suppliers was the complexity and multiplicity of tariffs. The number of options and different tariff structures meant it was extremely difficult for consumers to weigh up which represented their best choice.

Previous research looking at responses to restricted and simplified tariff models, suggested that while this may represent an improvement for many consumers, vulnerable customers may still struggle to understand and engage with new tariff structures.  Following further development of the tariff models, we were commissioned to carry out research to:

1.    Understand domestic consumers’ reactions to the proposed models, drawing out differences between the reactions of more vulnerable groups and other consumers

2.    Establish which model would enable consumers to compare tariffs more readily, and

3.    Understand whether they would be likely to switch supplier if a proposed model was introduced.

To ensure we understood each customer’s response we talked to the core sample (structured by SEG and lifestage) in triads and the vulnerable audiences as depths or paired depths. Triads/paired depths gave us both individual responses plus insights gained from their shared opinions; individual interviews gave more vulnerable customers the reassurance of being in their own homes. 

We conducted 44 sessions with 106 respondents, including 38 ‘vulnerable’ customers.

Details of the options for tariff models were provided by the client and we translated these into stimulus that would enable respondents to engage with them.  This took the form of a PowerPoint presentation that we could take customers through step by step thereby avoiding overloading them with information and allowing us to explore their response at each stage.  The models were illustrated using simple tariff tables. Rather than relying on respondents’ perceptions of ease of use, they were asked to identify the cheapest and/or most expensive option for different types of tariffs.

The findings demonstrated how issues of understanding applied to many in the core consumer audience as well as the ‘vulnerable’. None of the models represented the ideal solution; however, we were able to identify the features that had the greatest potential both in relation to ease of understanding and promoting switching.

Tariff Comparability Models: Findings (1307.853Kb)
Tariff Comparability Models: Appendices (602.667Kb)