Small energy retailers win on customer satisfaction

Small energy retailers have much higher customer satisfaction than larger competitors, according to new research from Roy Morgan.

The latest findings from Roy Morgan’s Customer Satisfaction-Electricity Providers Report and Customer Satisfaction-Gas Providers Report, which survey more than 10,000 electricity and gas consumers, has revealed customers are happier with smaller electricity and gas retailers.

The market average satisfaction with electricity retailers is currently 63.4 per cent and for gas it is 65 per cent, with the major players in both markets being below average.

Overall satisfaction with electricity retailers has fallen over the last four years by 1.8 per cent points to 63.4 per cent, but not all providers have shown declines.

The current satisfaction leader among the ten largest electricity retailers is Red Energy with 74.5 per cent (an increase of 6.4 per cent points since 2013), followed by Simply Energy on 71.4 per cent (up 9.1 per cent) and Lumo Energy 70.9 per cent (up 6.9 per cent).

The two largest electricity retailers have below average satisfaction, with Origin Energy on 62.3 per cent and AGL 61.3 per cent, and both are currently below their 2013 satisfaction levels.

Satisfaction with gas retailers has improved by 1.6 per cent points since 2013 to 65.0 per cent, with the greatest gains from Simply Energy (up 14.6 per cent to 73.8 per cent), Lumo Energy (up 9.4 per cent to 74.6 per cent and now the market leader), Kleenheat (up 9.3 per cent to 74.4 per cent) and Red Energy (up 9 per cent to 74.4 per cent).

Among the four largest gas retailers, Alinta, Origin and Energy Australia showed some improvement in satisfaction since 2013 but all four currently remain below the industry average.

The Australian Government recently met with major energy retailers to emphasise that they wanted them to ensure that retailers would be offering all of their customers the best deal they could,” Roy Morgan Research industry communications director Norman Morris said.

“A good measure of how well this objective is being met is to monitor customer satisfaction levels across each of the major players to understand overall trends and competitors rankings.

“There has been very little change over the last four years in the overall level of satisfaction with gas and electric retailers but the smaller providers in both markets have shown that bigger improvements are possible and as a result they have become clear leaders.

“Improving overall satisfaction in the near future is likely to present a problem, given the rapidly rising energy prices and the potential for power shortages but satisfaction can still be measured against competitors.

“It is ultimately relative performance and perceptions that will play a major part in customer acquisition and retention.”