How to confuse a Meerkat (and your customers)

British Gas announced last week that it is going to invest 100 million pounds in reduced bills and Sky TV packages as part of a customer reward programme.

The Centrica-owned firm is Britain's largest energy provider, supplying nine million households, 6.6 million of which (about 74%) are on its most expensive standard tariff.

The company said a range of new tariffs will be launched in April, offering discounted energy and services, such as boiler servicing and insurance, as well as entertainment packages together with Sky pay-TV.

British Gas said last month it would freeze prices on its standard energy tariff until August but other energy firms have announced price rises from March and April, prompting renewed calls for more reform of the energy market. Ofgem's chief executive said on Wednesday the energy market regulator has the power to cap energy price tariffs but the decision is a matter for the government.

Analysts at Barclays said the new British Gas loyalty programme could help retain customers and costs, but added that: "(We) doubt the government would distinguish between the 'big six' suppliers based on the introduction of a loyalty plan; especially when many materially cheaper fixed price tariffs remain available.

CONSPIRACY THEORY: If you can't beat the competition, then confuse the customer instead!

As reported recently in The Customer Service Blog (see article dated 27.02.17) new research shows that customers are now much more likely to change to different energy suppliers, and customer loyalty is not as strong as it used to be in this sector.

Much of this supplier-switching has been prompted by the success of price comparison sites such as USwitch,, and Compare the Market.

In my opinion, British Gas has been ‘rattled’ by this increased level of supplier-switching because they know that (despite recent announcements of price freezes) they are still far more expensive than many of the smaller independent energy companies.

What better way to mess up price comparison sites than by offering added incentives like free Sky TV!! I realise this might sound a bit cynical, but personally I believe that the real motive of British Gas in offering these freebies is to confuse customers and make it more difficult for them to make a fair comparison between different suppliers.

No doubt some customers will be fooled by this, and if the ploy proves successful then it is only a matter of time before other big energy suppliers jump onto the bandwagon and start trying to mess up the market by offering a complex range of freebies. 

It's in the interests of the 'big six' energy suppliers to confuse customers as much as possible with special offers and freebies, because it's usually the smaller independent suppliers that offer the best prices on the comparison sites.  

The subject of customer loyalty is a complex one, which I deal with in more detail in my new book ‘The Loyalty Gap - the 7 Secrets of Customer Loyalty’ which will be published later this year.

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