Energy companies should use technology to rebuild broken relationships with their customers, says Jenny Driscoll.
By 2020 the government wants every home in Great Britain to have a smart meter. For the uninitiated, smart meters are just like traditional energy meters. What makes them 'smart' is that they can communicate with the grid, providing energy suppliers with accurate information on a household's energy consumption at regular intervals.
This £11bn project should bring benefits to consumers. Not only will smart meters put an end to estimated bills by sending accurate readings to suppliers, they'll also enable us to begin to understand and monitor our energy usage. This could help us reduce energy consumption and, in turn, lower our bills.
However, the roll-out of smart meters could have some unwanted consequences for consumers. The government is encouraging smart meter installations to include advice on energy efficiency but Which? believes that energy suppliers will see this as another opportunity to cross-sell products to people.
The energy industry has spotted the potential for sales that the smart meter rollout is going to present and they're ready to make the most of it. We've found job adverts from energy companies insisting that potential smart meter installers should have 'a good head for sales'. The ads also say that installers will be paid commission based on reaching targets, which has set alarm bells ringing. In our dealings with the financial services industry, sales targets inevitably lead to mis-selling and there's potential for the same effect here.
This will be a worry for consumers as most people hate the idea of energy suppliers selling to them in their own home. Our research shows that 93 per cent of people wouldn't let an energy salesperson into their home, and 30 per cent wouldn't even open the door to them. This isn't surprising given the energy industry's track record for mis-selling to its customers. Most of the Big 6 energy suppliers have had run-ins with the regulator about their sales practices. Given this, it's no wonder that energy suppliers are even less trusted than banks and that their salespeople aren't welcome on people's doorsteps.
Which? doesn't think that energy companies should use smart meter installation to sell to people, instead they should use it as an opportunity to rebuild their broken relationship with their customers. The benefits of the smart meter rollout are already heavily stacked in favour of the industry. Government figures predict that the efficiency savings from smart meters will save energy companies hundreds of millions of pounds a year while the cost savings to consumers will depend entirely on whether they cut their usage.
We've been working with energy companies by encouraging them to sign up to our 'no selling, just installing' smart meter pledge. Companies who sign up to the pledge will not sell during the installation and their smart meter installers will not be on sales-related commission or have to make any sales leads.
The installer will fit the meter, explain how it works, leave written material – which yes, may include marketing material – and then go. Seven companies have made the promise already – Co-operative Energy, Ecotricity, First Utility, Good Energy, Ovo and The Utility Warehouse.
Given that the £11bn cost of the smart meter roll-out will come out of our energy bills, we think it is imperative that the project is a positive experience for consumers, otherwise its success will be severely undermined. Using the roll-out as an opportunity to sell to us in our homes isn't the recipe for convincing us that smart meters are a good idea.
So, thanks for my new smart meter, energy company. Yes, please install it. Yes, please explain how it works. Yes, please leave written information. But don't try and sell to me in my own home. *