Energy Switch Guarantee: Best Practice Guide 2023-24

In 2024, the Expert Panel comprised the Chair of the Guarantee, Matt Cole, Head of Fuel Bank Foundation, representatives from the UK’s consumer advocacy groups, and Energy UK.

Areas of particular focus for the panel were how signatories:

• Demonstrate the steps and activity underway to ensure their company is prepared for increased volumes of customer switching in 2024.
• Show how they embody the ESG principles of Speedy, Simple, and Safe into their service provisions.

As a result of these hearings, the ESG has produced a Best Practice Paper, highlighting areas where signatories go beyond what is expected of them and suggesting improvements that the industry could make to drive up standards across the sector.

Introduction

An energy system that works for all is essential as we continue our transition to Net Zero. A system that works for all requires simple and logical standards that customers understand and can see the benefits of. The Energy Switch Guarantee – or ESG for short – has been developed by a number of domestic energy suppliers, and focuses on switching, and switching alone. Members of the ESG have committed that customers have the information they need and protections they rightfully expect to engage fully in the market. This covers information that is provided to best inform customers when they are thinking about switching tariffs or suppliers, to principles that ensure that customers know what to expect and drive suppliers to continually enhance their default levels of service and standards.

A robust regulatory framework must exist across the energy sector to both protect customers and maintain consistency in standards. That said, the shape and ambition of the household energy sector should not simply be defined by the regulator: in a competitive market, suppliers should strive to go beyond the regulatory baseline, to deliver better outcomes for customers, and in doing so help create a more robust sector which provides strong and secure foundations on which to build our Net Zero ambition and plans.

Over the last year, the number of customers who buy their household energy from an ESG member supplier has increased significantly. As this Best Practice Guide is published, over 90% of GB energy customers are supplied by an ESG member, an increase from around 50% a year ago, with all suppliers demonstrating complete compliance with the guarantee. Over the next year, the guarantee will continue to evolve to ensure that it delivers marked changes that provide meaningful benefits to customers. This review of supplier standards and practices is part of this change and the ESG will continue to publish an annual review of practice, and where focus is needed.

As Chair of the ESG, I encourage ESG members and other suppliers alike to consider how their processes stand up against some of the principles highlighted and examples shown, to drive further innovation and improvements for customers. I would welcome comments or reflections from stakeholders and customers as to those areas that we drill into in 2025 and beyond.

Michael Cole

Chair, Energy Switching Guarantee

Year in Review

After almost two years of record lows in switching activity during and after the energy crisis, 2023 saw switching figures in the energy market begin to increase. Whilst customers have slowly started to shop around for deals, switching has still not returned to the levels we saw up to 2021.

The ESG has continued to ensure its signatories live up to the principles and to make sure we evolve with the energy market we have today. In the past year, three suppliers have joined the guarantee, meaning more customers are served by suppliers that ensure switching suppliers or tariffs are completed to a high standard, above supplier obligations set out by the energy regulator.

As part of the ESG commitment, signatories are required to present to an expert panel each year. This year we focused on:

• How they are preparing for increased volumes of customer switching activity in 2024.
• How they are embodying the ESG principles of Speedy, Simple, and Safe in their services.

This guidance document will highlight some of the best practices and themes suppliers have delivered over the past year with regard to switching.

Readiness for market opening

In all ESG panel hearings, we heard repeated examples of how the lull in market activity had been used proactively on programmes to improve customer outcomes and drive performance enhancements to be ready for when conditions changed. These changes focussed on two key areas:

1: Investing in new technology to deliver enhanced customer-centric processes

A number of suppliers shared how they had used the recent period of lower switching demand to ensure that they would be able to serve their customers from a new platform, putting sleeker processes in place. These processes were enhanced by clearer customer comms and a focus on ensuring accessible information. Consequently, this delivered a step change in experience and provided surety about the ability to manage larger volumes of switching activity in the future. This would also provide an improved customer experience for those in debt or payment difficulty, given the rise in consumer energy debt that has been seen in recent years following the pandemic and energy crisis. Some suppliers, such as EDF, British Gas, and E.ON Next, had committed to large-scale migrations from legacy systems to new, more agile platforms, whereas other suppliers, such as Ovo, were consolidating all customers they supplied on varied systems, onto one common enhanced platform within their group. 

Several suppliers shared how they had embedded a cycle of enhanced governance and central control points to quickly identify any potential risks within a process and to speedily put in place any actions to ensure there would be no undue impact on customer outcomes. This focus on continual review, analysis, and improvement is seen to drive incremental change that stops material issues from becoming embedded within an organisation. Some suppliers shared how senior leaders in their organisation were engaged in this process and that this had driven a culture change that enabled issues to be quickly surfaced and solved. ScottishPower for example, has weekly sessions focused on customer experiences that have resulted in a mass of changes being made.

It was also apparent that suppliers were taking a wider view when considering likely customer impacts, and whether any change would ultimately drive consumer benefit. Several suppliers shared how they use direct customer insight through panels, structured research, engagement, and test labs to fine-tune their proposals. This proved to be a helpful tool in addition to gleaning insights from complaints or trust pilot reviews. For example, ScottishPower used its customer panel to inform its decision-making process. They took a number of different issues to the panel and could test solutions quickly within the group. Similar approaches led numerous suppliers to evolve their customer switching proposition and focus on ‘getting it right for the customer through active listening’, which showed to be an effective approach. Other suppliers identified how they used complaint analysis specifically to identify and drive further change to avoid future complaints.

Many ESG members – including Outfox the Market and Fuse Energy – shared plans to automate increased volumes of activity. This was intended to accelerate the time taken to process those applications to change tariffs or to be supplied by that company and to enable and support higher volumes of activity as more tariffs are launched for customers to choose from later in the year.

It was clear that tension exists, however – and one that was being carefully considered by all ESG members – concerning the risk of automation going too far. By prioritising speed and system process and removing key touchpoints or interfaces with a customer, the customer experience could be materially impacted. A very live example of relevance to the ESG is how the full automation of final bills is something that could be achieved quite quickly but would also produce a larger proportion of estimated bills which we know are not favoured by customers. This will be something that the ESG continues to discuss over 2024 to ensure that the line is drawn at the right point, potentially through a revision of our existing ESG commitments in this area.

2: Great service – which only comes from having the right people with the right skills that complement self-serve capability

It was clear in all of our panel hearings this year that customers rightly expect high-quality services via online platforms as a source of information and assistance, but also to have access to a team who can help when it’s needed. All ESG members discussed how they had increased their customer service investment. They noted increasing the size and scale of their service operation and used this to complement information that was available to customers online. SO Energy has identified that providing consumer information through blogs has been a successful way to increase customer understanding in key areas. Octopus Energy also highlighted how providing enhanced self-serve capability through its app has shown additional insight to enable customers to better manage payments and to avoid or provide greater visibility of any risk of debt or excessive credit.

ESG suppliers – including EDF, E.ON Next, British Gas and OVO – detailed how they transformed their target operating models. This has enabled them to flatten the structure in their service operations, whilst increasing the range and breadth of what an individual advisor can do to support customers, avoiding unnecessary handoff and the risk of unwanted delay.

Although the principle of a universal agent is seen as a standard that many suppliers have, or aspire to have, it was interesting to note that several suppliers highlighted areas where certain specialisms are required, and where having a centre of expertise can deliver enhanced customer outcomes. This approach has been adopted by some suppliers in various key areas, including customer onboarding, and metering-specific query management and resolution for technical prepayment and smart metering issues. Maintaining a balance between ensuring that most service agents can respond to most queries and providing a timely and speedy escalation process for when specialists need to be enlisted to close any query down is key. It will be interesting to see how any ESG members with a smaller number of customers plan to use this insight and embed different operating models and practices as their businesses grow.

A focus on agent development and performance was seen to be critical, with enhanced levels of service provided where there had been a continued investment in training. Many members discussed the reassurance provided by a cross-training and upskilling programme that enables teams to be moved from area to area in response to periods of high workload and demand, often identified by some of the previously mentioned governance and quality steps that have been embedded. SO Energy has adopted a mandatory exercise of shadow listening to colleagues’ calls every quarter, to ensure that insights are continuously gained.

Bringing the ESG principles of Speedy, Safe, and Simple to life

The energy system has evolved considerably since the launch of the ESG in 2016 when only 14 per cent of GB households were not supplied by a ‘big six’ supplier. Today, over 40 per cent of GB households are supplied with energy from a company that was not one of the original big six companies. The original ESG principles however of switching being Speedy, Safe, and Simple still hold true: this is what customers expect, and rightly so: the ESG ensures that members consider these core components and ensure that they have been fully embedded into and across their business. Signatories demonstrated a thorough understanding of the three principles during the panels.

Ensuring that switching is Speedy

ESG members have consistently overachieved the target of switching to a new supplier within five working days if desired. In 2023, the guarantee introduced a new standard where switches between tariffs – i.e. where a customer stays with the same supplier but agrees to a new tariff with their current supplier – are processed within the same timescales. This standard was introduced prior to Ofgem regulations mandating a five-day switch and the ESG continues to identify how it can ‘road test’ further evolution and innovation in this area to drive greater customer outcomes. Many suppliers have highlighted that a sizable proportion of customers joining their company wish to select a date to switch suppliers in the future – typically because they want to be aligned with moving home, or when their existing fixed tariff ends. In 2024 the ESG will examine how these existing standards may evolve as customer expectations change as more tariffs become available to select.

Notwithstanding the point that some customers wish to transfer between suppliers at a future date, customers also expect the process to initiate the switch to be straightforward. One supplier, Fuse Energy, tracked the time it takes a customer to complete the onboarding process, aiming for (under 4 minutes) and most suppliers explained how they have enhanced their direct-to-consumer sales channel processes to both provide a better customer experience and limit the opportunity for errors and inaccuracies to be introduced that can cause future customer dissatisfaction.

Switching should always be Safe

Some ESG members have – as a result of other supplier failures and acquisitions – switched a significant number of customers to their target platform or systems. Octopus, OVO, and British Gas explained how they approach customer transition diligently, supported by robust controls incorporating continuous learning and improvements into the customer journey throughout. This ensured that the transfer of large portions of customers was straightforward and did not cause any particular concerns for the customer. This was particularly important as this was often the first interaction the customer had with their new supplier.

Some suppliers detailed how they used training to build up agent competence, for example, EDFs skills academy. This led to potential customer issues being quickly identified, resolved or even mitigated, through great front-line interactions. This approach was adopted by all ESG suppliers, with a notable increase in switching-related process improvement activity. Signatories have made incremental improvements to enhance the customer experience, and further address any existing concerns. British Gas shared how it uses behavioural science analysis to drive further iterative change, with other suppliers adopting similar test-and-learn models to ensure changes or new processes are safe to use.

Above all, switching will be Simple

Most ESG suppliers shared their omnichannel model that ensured that regardless of how a customer initially engaged with the supplier in the onboarding process, the same outcomes would be delivered. Outfox the Market explained how proactively resolving exceptions in advance of customers becoming aware of them has led to an improvement in customer experience and reduces the need for unnecessary contact.

Empowering and enabling customers to make informed choices was a common theme that ran through all panel hearings. Fuse Energy demonstrated how thinking differently about how customers are best identified in ID and verification processes can deliver an enhanced customer experience. An increase in the number and breadth of tools, services, and sources of information made available to customers was noted. ESG members demonstrated the importance of how customers can better own their switching experience and configure this so it best meets an individual’s requirements and many suppliers were passionate advocates of how information can be provided to better inform customers, and Octopus detailed the logical steps that customers walk through in selecting a future tariff, and how these have evolved based on customer insight and feedback.

An opportunity was flagged by several suppliers around an expectation from customers that smart meter health and operability is seen as essential, and evolution in this space could lead to a step change in customer experience. This will be examined further by the ESG in 2024.