The introduction of The Electricity Act in 1989 saw the UK energy market undergo a seismic shift, with privatisation leading to dramatic changes and the introduction of a range of new businesses dedicated to providing energy for people’s homes. Energy suppliers both large and small are using a Direct Debit facility to keep the lights on.
As the market settled down from these changes notable disrupter suppliers began to emerge, with the energy market over the last decade being dominated by the ‘big six’ suppliers, a group which seemed impossible to break up. However, technology based service has changed that; and the UK energy industry is currently undergoing its most dramatic change since 1989 with the introduction of a number of challenger brands shaking the industry up.
The rise of the independent energy companies
A report from the Government regulator for the electricity and gas markets Ofgem, has shown that challenger brands have been appearing at a rapid pace over the last two years, with many new small to medium sized suppliers entering the market. As this growth in SMBs has occurred, the ‘big six’ have begun to lose market share.
Over the years the big energy brands have developed a somewhat negative impression with consumers, who have faced rising prices and often poor customer service. Now, with a view to saving money, consumers can easily compare other suppliers online for the best deal, even if the suppliers are small and unknown.
The benefits of a Direct Debit facility for your challenger energy business
With services such as uSwitch, switching energy suppliers is an easy task that can be done in just a few minutes online. Moreover, the changes in consumer behaviour have resulted in customers expecting more from their energy supplier, both from a cost and customer service perspective. Bacs reports that 9 in 10 people already make Direct Debit payments, one of which is most likely to be a utility bill. As such, it’s safe to expect the same payment methods will be made available by the new provider.
A large part of providing high-quality customer service is making the day-to-day interactions your customer’s have with your business as smooth and easy as possible. Paying bills is no exception. Offering your customers the option to pay by Direct Debit will help remove any potential payment obstacles, making it easy for them to ‘set it and forget it’.
If your business uses a Paperless Direct Debit facility, new customers will be able to quickly and easily sign up online, with no need to wait for paper forms and send them back to you. This has been proven to dramatically increase your conversion rate and sets the tone for an easy, efficient relationship when it comes to supplying energy and collecting payment.
Energy bills are one of the most common household bills, but can often be delayed as people forget about them or are simply unable to find the time to make the required payments until after the due date. A monthly, automated Direct Debit makes your customers lives hassle-free from having to remember to pay their bill on time.
Direct Debit also offers customers the ultimate flexibility, enabling them to choose the best time of the month for payments to be deducted. Should they get paid on an irregular timescale it is also possible to set-up fixed payments, i.e. £10 per month, or variable amounts dependent upon usage of energy.
As the energy supplier, if a Direct Debit fails, instant notifications will notify you which customers have failed to pay and why the payment has not gone through. Not only does this allow you to act quickly when failures do happen, but also makes reconciliation by elimination possible, dramatically reducing the administrative time and resource required for this often manual task.
As a business, chasing late payments is a significant drain on your accounting team’s time, (when more important things such as driving your core business could be achieved!). Two key benefits of Direct Debits are automation and less paperwork.
Why Direct Debit management with First Capital Cashflow?
- We have been helping businesses with their Direct Debit requirements for over 15 years, processing over £8 billion on behalf of our clients in 2017
- We are a Bacs Approved Bureau and FCA Authorised Payment Institution, so clients can be confident that we are utilising the latest, most secure technologies and their data is handled with absolute integrity
- Our client retention rate stands at an industry-leading 98%. Indeed, many of our clients have been with us since day one – highlighting our commitment to providing the best customer service experience possible
- We have experience working with energy suppliers, giving us the knowledge to know what’s important in your industry and the ability to quickly execute your requirements
- Using cloud-based technology, means no time-intensive software installation or expensive upgrades being required
- All collections are carried out in the name of your business and your brand appears on your customers bank statements
- Guaranteed disaster recovery means that, should the worst happen, our Direct Debit management experts will use all of the knowledge and expertise to quickly resolve the issue with minimal impact on your business.
If you have any questions about what Direct Debit facility will work for your business, please contact us on 0344 826 6700 or fill in our form and we will call you back.
How we’ve helped our clients…