Since new regulations to control direct energy sales were implemented by Ofgem in 2009, switches made in a direct manner – either face-to-face or telesales – began to decline as many suppliers ceased using the direct sales channel.
However, the latest research from Cornwall Insight’s Domestic Energy Sales Channels Report shows a resurgence in the number of domestic energy switches acquired through face-to-face channels. Our data shows it increasing by 38%, reaching 1.1mn switches in the year to 30 September 2019. Telesales has seen a similar boost albeit at a much slower pace rising 7% in the year to 1.6mn switches a year.
Hannah Treacy, Analyst at Cornwall Insight, said:
“The removal of the Whole of Market requirements for Ofgem-accredited price comparison websites (PCWs) has meant that small and growing suppliers without commercial arrangements with these sites have had to find alternative routes to market. This has resulted in more suppliers using the direct sales channel.
“One of the advantages for suppliers who opt to use this channel is that the benefits of the supplier can be explained more fully to the customer. This allows expectations to be managed upfront before the switch takes place and in turn, should lead to a better supplier-customer relationship.
“Although the intermediated channel, which includes PCWs and collective switching remains the most significant route to market for suppliers, the recovery of the direct sales channel demonstrates the attractive opportunities it provides for suppliers.”
Domestic Energy Sales Channels Report
Our Domestic Energy Sales Channels Report addresses commercial models and the challenges and opportunities associated with different sales channels in the domestic energy market, helping readers understand the main ways domestic energy suppliers seek to acquire and maintain customers, routes-to-market and the operational and commercial parameters.