Energy customer switching
Energy customer switching is a concept stemming from the global energy markets. The concept refers to the action of one energy customer switching energy supplier, a switch is essentially seen as the free movement of a customer. In addition to that a switch can include:
- A re-switch: When a customer switches for the second or subsequent time.
- A switch-back: When a customer switches back to his/her former or previous supplier.
The above is the official definition of switching and is being used by public energy institutions such as CEER & ERGEG. The definition was originally developed by Dr Philip E. Lewis.
Switching is a key concept to understanding competition-related issues on the global energy markets as the switching level of a concrete market reveals the state of the competition; High switching rates equals high level of competition and low switching rates equals limited competition. Thus measuring and assessing switching rates is necessary in order to have a correct impression of the energy markets. The action of switching is often done via a price comparison website or by the traditional door-to-door sales method, where a salesperson assists the customer in switching.
This is a concept that has become particularly popular in countries such as the United Kingdom, Australia, France, Spain and Germany, where large numbers of competitor brands operate.