OnDemand WTP Pricing Research

Trust and pricing: a complex relationship | Utility Week

In response to the ongoing issues with trust, Utility Week established the Customer Trust Council in 2017, in association with WNS Global Services (WNS). It works with energy suppliers, networks, water companies and consumer representatives to explore what has gone so badly wrong – and what the industry can do to fix it.

At the latest meeting of the council in London last month, it was agreed that pricing and trust are intrinsically linked, or as Victoria MacGregor, director of energy at Citizen’s Advice, put it: “Fair prices are what’s important – but more importantly, people want to know exactly what they’re paying for and why.”

She said trust, not unlike company culture, is a notoriously nebulous thing, and far more complicated an issue than cost alone.

Sara Vaughan, political and regulatory affairs director at Eon, agreed but added that there is a widely held assumption by consumers that energy is expensive, when in fact returns are not high. The problem, she said, was one of wording and transparency.

The price cap
It was suggested that the price cap might alleviate these problems by providing a benchmark that could help people establish trust in their suppliers, but not all present were in agreement.

Doug Stewart, chief executive of Green Energy, questioned the sense of trusting the government to regulate bills. “We are having to pass on regulatory costs, but no-one explains to the consumer that we have no choice but to do that – there’s a duplicity.”

He said an advantage of the price cap may be that the government will have to take more responsibility for the costs involved.

As it stands, said Ben Newby, customer services and IT director at Bristol Water, “an individual would understandably struggle to know what the price should be”, before adding that customer perception with regard to pricing is easily swayed by the media. “Trust in a supplier can be destroyed in an instant by one inflammatory headline,” he said.

Mike Keil, head of policy and research at the Consumer Council for Water (CCWater) said he too would advocate a clearer breakdown of prices, but it was agreed the issue of transparency is far more nuanced than that. Or as Matt Rudling, director of customer services at UK Power Networks, put it: “It’s about perceived value as a customer, and how you communicate that is so important.”

Eon’s Vaughan advocated clearer communications, but agreed with Bristol Water’s Newby when she said: “Consumers will be influenced by what they see and hear in the press, and we have no control over that. How we get past that is a big hurdle.”

Read complete article here:

Trust and pricing: a complex relationship – Utility Week.