Why are customers loyal in some business sectors but not others?


A few days ago we published an article about the reluctance of customers to switch banks, despite the fact that many people are unhappy with the service they receive from their bank, and even despite the fact that they can get up to £220 in financial incentives for switching to a new bank.
However, it seems that customers are not as reluctant to switch energy suppliers. In fact figures published today show that last year customers switched energy supplier at the highest rate in six years, and are increasingly shopping around for the best deal.
According to Ofgem, UK energy customers switched providers 7.7 million times last year, saving potentially more than £200 a year.
In the coming weeks, standard gas and electricity tariffs will go up at Npower, Scottish Power, Co-operative Energy and First Utility, while EDF will raise electricity prices. Ofgem chief executive Dermot Nolan said the increase in customer switching should act as a "warning" to such suppliers.
"If they fail to keep prices under control or do not provide a good service, they risk being punished as customers vote with their feet." Mr Nolan said. "While today's figures show good progress, the market is not as competitive as we would like."
But according to Ofgem, about two thirds of energy customers still remain on standard tariffs or pre-payment deals, which often offer far worse value. They believe that, despite intense competition and soaring fuel bills, not enough people switch suppliers regularly. In fact half of households have never switched suppliers, proving that you can lead a horse to water, but you can’t make it drink!
Customer complaints about switching dropped 36% last year, suggesting companies are also managing the process better, the Energy Ombudsman said.
Lawrence Slade, Chief Executive of the trade association Energy UK, said the high rate of switching showed that "competition was working for more and more households. The industry is committed to ensuring the market works for everyone and is taking action to engage with loyal customers.”
But this still begs the question of why people are now more readily prepared to switch their energy supplier, but are still so reluctant to switch their bank. 
This question, and the whole issue of why people remain loyal to some companies but not to others, is answered in the book ‘The Loyalty Gap - the 7 Secrets of Customer Loyalty’ by Darren Bugg, which is published later this year.