Customer Switching in Australian Electricity

Introduction

This brief investigates the trends in customer switching in the electricity market in Australia, and examines emerging trends such as the proliferation of price comparison sites, the growing presence of new entrants and also how the global financial crisis would be expected to impact the switching rate.

Scope

• Survey of 1,000 Australian households, examining reasons and triggers for switching, anticipated future behaviour, and reasons behind non-switching.
• Penetration of new entrants in competitive states and customer acceptance of offers from new entrants.
• Analysis of key sources of information for switchers, including proliferation of price comparison sites.

Highlights

The accessibility of pricing information from price comparison websites is further improving the situation for customers looking to switch, with 21% of switchers citing price comparison sites as a key source for their switch.

The key challenge for utilities remains overcoming inertia and driving non-switchers to change. Some 42% of non-switchers are happy with their supplier and 24% are yet to look into switching. Furthermore, 32% of non-switchers would be unlikely to switch for a 10% saving.

83% of customers are willing to consider offers from new entrants, and 14% of those who have switched to a new entrant did so because they did not want to be supplied by a traditional utility.

Reasons to Purchase

• Track the progress of switching by state and changing consumer drivers.
• Evaluate key sources of information for consumers when switching supplier.
• Identify trends in customer inertia and to how overcome it.