Tuesday, November 27, 2012

Changing electricity and gas supplier: A survey of households behaviour

The portal energia.sk in the period from 13th to 31st August 2012 carried out an electronic readership survey. Its aim was to monitor motivation, respectively disincentives of households to change their supplier of electricity and/or natural gas.

Methodics


Online electronic questionnaire was completed by 282 respondents and in the data collection period came to webo portal energia.sk 9.918 "unique" visitors. It should be emphasized that this is a readership survey, readers of the website do not constitute a representative sample of the population of Slovakia and the voluntary completion of the questionnaire does not statistically replace replace the principle of random sampling.

Nevertheless the results reveal the consumer behavior of households; respectively its members as readers of energia.sk which are interested in energy, power engineering and liberalization of the market. The sample description of readers is based on the measured data on current attendance of the portal. In Google Analytics, as well as from the analysis data on registered subscribers of daily e-mail information service, readers of the portal energia.sk are divided into three groups:
  • portal users who are professionally active in the energy sector (representatives and employees of energy companies, representatives of state and government - the Ministry of Economy, The Regulatory Office for Network Industries, etc..)
  • portal users who come into direct or indirect contact with power and energy issues (journalists devoted to the energy sector, government officials, people active on campus in research and development - Slovak Academy of Sciences and etc...)
  • finally, the portal users representing a kind of informed consumer community - energy end-users and the wider public with a deeper interest in the issue.

The original ambition of the readership survey was to monitor the positions of two groups of respondents: representatives of households and representatives of small and medium-sized businesses. The vast majority of respondents (95.7%) marked at the beginning of the electronic questionnaire that they answer it as a representative of household. Therefore, the respondents who responded to the questionnaire as representatives of small and medium-sized firms were filtered from the database answers and the evaluation of the questionnaire focused on the answers of households.

The vast majority of respondents (84.3%) marked at the beginning that they are the purchaser of electricity and natural gas at the same time. Only 15.7% said that use only electricity without gas. Regarding buyers of commodities, generally they have a direct contractual relationship with its suppliers. In the case of electricity and gas a direct relationship has 94.5% of respondents. Other respondents declared that they buy individual commodities vicariously, for example through the owner of the property in which the household resides. These features suggest the relevance of research findings.

The main findings


The main finding of the survey can be formulated as: The vast majority (95.0%) of the consumers (energia.sk readers) are aware of the change of the supplier of electricity and gas but 68.8% of them do not changed the supplier and the third (33.0%) of this group admitted that they will consider the change to the end of 2012. Approximately another third marked the option "do not know" (32.1%) and the final third will not intend to this issues (34.8%).

Those who changed their supplier:
  • the largest part changed the electricity and gas supplier (42.5%),
  • change of natural gas supplier only 31.9%
  • change of the electricity supplier only 25.6%.

Just for completion, if it comes in a future of the first or repeated change equal 39.0% of respondents answered "do not know". As in the second order (37.4%) respondents ticked 'yes'. Thirdly, 23.6% answered "no."

Reasons for passive consumer behaviour


The main reason of no action the majority of respondents identified "the price advantage is negligible or none" (33.3%). In this question respondents could indicate only one reason to consider the "main". In addition to already mentioned, most respondents indicated these following main reasons:
  • "Price advantage is negligible or none" (33.3%),
  • "Supply contractors are not transparent" (17.6%),
  • "I do not want to deal with it" (16.6%),
  • "I do not trust the information that is presented in the advertisement (14.7%),
  • "Change of the supplier is difficult" (4.9%);
  • "All suppliers are the same in the products they offer are not differences" (2.9%);
  • "I am afraid that a change could lead to failure of electricity or gas" (1.0%);
  • the rest indicated the chance "other."

In the next question consumers could identify a number of "other" reasons for which they changed the supplier. Offered possibilities were the same. The order was similar as in the determination of the main reason, but the percentage rate was different:
  • "Price advantage is negligible or none" (32,7 %),
  • "Supply contractors are not transparent" (26,7 %),
  • "I do not trust the information that is presented in the advertisement (25,7 %),
  • "I do not want to deal with it" (23,8 %),
  • "All suppliers are the same in the products they offer are not differences" (8,9 %);
  • "Change of the supplier is difficult" (7,9%);
  • "I am afraid that a change could lead to failure of electricity or gas" (5,0 %);
  • the rest indicated the chance "other."

Estimated financial saving in supplier change


Among respondents who have changed the supplier, nearly one in four could not estimate the real annual savings of this step. This applies to both commodities - electricity (38.6%) and natural gas (39.6%).

The respondents who changed the supplier and knew to estimate the achieved financial savings, most often mentioned:
  • annual savings in the range of "51 to 100"  euro per account for natural gas (16.7%),
  • annual saving in ranges of "16-20" and "21-30" euro per account for electricity (or both 11.4%).

 Table. 1: Estimated saving

It should be noted that the answer to this question answered only respondents who indicated at the beginning that they changed the commodity at least once. So 31.2% of respondents answered the question. In practice this means that there could raise space for the statistical deviation.

Motivation for change and satisfaction with current suppliers


The results are all the more interesting that the majority of respondents (59.3%) identified the main motivations for change, respectively thinking about change "a specific savings from the total account for the energy (€/year)." The second-most common reason was the "credibility of the supplier" (37.4%) and "additional services to the energy supply" (28.5%). Respondents enclose to the other reasons minor importance. In the open-emerged question the major motivation was an "ecological site" of the supplier (2%), thus the supply of renewable energy.

When respondents were asked to mark only one main reason, the following chart was:
  • "specific savings from the total account for the energy (€/year )" (59.3%),
  • "credibility of the supplier" (16.3%);
  • "saving in the unit price (€/year)" (13.0%),
  • "additional services to the energy supply” (4.1%);
  • "the time of the contractual linkage” (3.3%);
  • "brand name of the supplier" (1.6%);
  • the rest indicated the chance "other." (2.4%)

When respondents were asked to indicate also other reasons (they should mark more answers), the results were:
  • "credibility of the supplier" (37.4%),
  • "specific savings from the total account for the energy (€/year )" and at the same time as the "additional services to the energy supply " (both consistently over 28.5%),
  • "saving in the unit price (€/year)" (25.2%),
  • "the time of the contractual linkage " (22.0%),
  • "brand name of the supplier" (17.1%),
  • the chance "other" marked 4.1% of respondents,
  • respondents who ticked at the beginning that they have changed the supplier could to indicate the possibility "dissatisfaction with the approach of the original supplier." This option marked 12.5% of those who have changed supplier.

Without regard to fact, whether the respondent has changed or has not changed the supplier, the survey also looked at satisfaction with current suppliers.  They answered at the question "with your current supplier you are":
  • "satisfied" (59.8%),
  • "dissatisfied (11.5%);
  • "I cannot judge (28.7%).

Subsequently several possibilities were in the online questionnaire and respondents were asked to indicate the main reason for satisfaction, and the main reason for dissatisfaction with the current supplier. Respondents could mark one possibility for satisfaction and dissatisfaction.


Table. 2: Preferences in satisfaction and dissatisfaction with the supplier

Conservative consumer behaviour


The survey showed that households do not have much confidence to the brokers, but in the decision of changing the supplier they prefer the direct contact with the selected supplier. It is also clear that although the practice of doorstep selling in the key business channel for suppliers, it is not preferred channel for consumers.

Preferred sales channel according to the survey is a personal visit of customer service. Full ranking of preferred sales channels:
  • "personal visit in customer service of the supplier" (37.4%),
  • "online tool - web site of the supplier" (24.4%),
  • "prearranged visit with the supplier's representative" (15.4%),
  • "online tool - an independent trading platform" (12.2%),
  • "telephone hotline of the supplier" (8.9%);
  • "'random' doorstep selling" (0.8%);
  • the "other" marked 0.8%.

The online questionnaire asked about any "other ways of change of energy supplier arrangements that they actually use." Respondent should indicate more options at the same time:
  • "online tool - web site of the supplier" (38.3%),
  • "personal visit in customer service of supplier" (28.7%),
  • "prearranged visit with the supplier's representative" (27.0%),
  • "online tool - an independent trading platform" (24.3%),
  • "telephone hotline of the supplier' (20.0%),
  • "'random' doorstep selling '(0.0%);
  • the "other" marked 0.9%.

Consumer preferences with reality were confronted by the question for those who has changed the supplier at least once. The question asked at the way of change. Complete ranking:
  • "'random' doorstep selling '(28.3%),
  • "personal visit in customer service of the supplier" and - "online tool - the website of the supplier" (both consistently 22.6%),
  • "prearranged visit with the supplier's representative" (11.3%),
  • "telephone hotline of the supplier" (7.5%);
  • "online tool - an independent trading platform" (1.9%);
  • the "other" marked 5.8%.

Subjective perception of energy prices and opinions on open market


Finally, the survey asked respondents to rate agreement or disagreement with the proposed claims. The agreement with the statements in here:


Table.3: Agreement with the statements – electricity


Table. 4: Agreement with the statements - gas

Most respondents perceived the opening of the energy market positively. At the question what predominated at the open (liberalized) market, respondents said:
  • "more positives than negatives" (51.3%),
  • "as many positive as negative" (12.2%),
  • "more negatives than positives (17.4%),
  • "I cannot judge" (19.1%).

When respondents were asked to think about positives, the preferences were (they had the opportunity to indicate more options):
  • "the possibility of choice" (75.7%),
  • "more competition" (54.8%),
  • "lower prices" (37.4%),
  • "the care of customer " (29.6%),
  • the "other" marked 3.5% of respondents.

When respondents were asked to think about negatives, preferences are as (they had the opportunity to indicate more options):
  • "unfair competition - unfair communication on the doorstep selling" (80.0%),
  • "unfair competition - ads that do suit to the reality" (53.9%),
  • "elude the law" (41.7%),
  • the "other" marked 5.2% of respondents.

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