The front page headline of the Sunday Star Times (July 12, 2009) claims that “Customers win big in power wars”. We have a different view. We think that power customers are being betrayed and the vast majority of customers are losing out. The “win-back” practice of other power companies is benefiting only select customers at the expense of all customers. To offer a departing customer $200 or more to stay is wasteful, silly and ultimately unsustainable, but what’s worse, we think it is outrageous that these companies are rewarding their disloyal customers (those who have chosen to leave) at the expense of their loyal ones.
Powershop is founded on the principle of bringing competition to the retail marketplace. We see a selective but aggressive customer poaching practice as a deliberate attempt by power companies to subvert true competition - rather than put their best offer on the table, they are using the profits they make from other customers to bribe a select few customers back. These win-back offers also most often come with hooks (there is no free lunch) such as being locked in for a fixed term. And don’t be fooled by “price freezes”, wholesale prices are picked to stabilise or fall in the near term (primarily due to increased capacity coming on stream and reduced demand with the slowing economy).
People. It is time to exercise some consumer power, let your voice count. Here’s what you should do. SWITCH POWER COMPANY NOW. You have nothing to lose. Here’s what you stand to gain if you switch now:
- you learn how easy and painless it is to switch. You don’t need to feel trapped with your current company ever again.
- in most cases you can get a better deal.
- you may get an attractive offer to stay with your current company (if you are comfortable with it, take it while you have the chance).
There truly is nothing to lose. Even if you don’t think Powershop is for you, seriously think about changing power company anyway (we’d love you to give us a chance though).
Switching to Powershop only takes 5 minutes and can all be done online. All you need is your address and either bank account or credit card details (other details off an old power bill are handy but not essential). Get started here.
Power to the people!
Tags: competition, customer service, incentives, switching
Right now i am about to buy a spring is sprung special but have the message “We estimate...
I take number 2 back. I’d completely forgotten about the “Available unit...
I have to agree. Switching to Powershop was incredibly painless — much less work than I was expecting!
And… I’m happy that now I just have a per-unit charge: no more monthly / daily fixed prices obscuring the real cost per unit of my power.
Kirk
July 12th, 2009 at 10:53 amSo is it sustainable for you guys to offer $50 to new customers?
July 13th, 2009 at 3:08 pm@Felix:
Probably not. We are an early company investing in acquiring customers, and that can continue for a period of time. But when we get to a critical mass we will be much more focussed on selling our benefits to potential customers, rather than using signup incentives.
At the end of the day I am not concerned about companies promoting their products and services and offering incentives to acquire new customers. My concern is selective and *private* deals being offered to some (unloyal) customers at the expense of others. This is a miss use of information and an outrageous practice from a customer perspective and a deliberate tactic to subvert true competition.
July 13th, 2009 at 3:21 pmits great how you post comments to your own blog about how ‘painless’ it was to switch…. so believable!
July 17th, 2009 at 4:02 amthis site is owned by Merdian Energy so there is no way you’re truly going to be able to ‘compare power companies’. its so bias!
July 17th, 2009 at 4:04 am@Scott:
It is painless to switch, and we have many customers who agree with that statement.
It takes 5 minutes online, there is no disruption to your normal service and we keep you informed on the progress of your transfer from your current supplier.
July 17th, 2009 at 7:29 am@Jimmy:
Yes, we are owned by Meridian, but we are a stand alone company, and are completely operationally independent. We have no influence on pricing of products other than our own Standard Power.
I have commented many times before on the pros and cons of Meridian ownership.
July 17th, 2009 at 7:32 amWhen you say you are ” completely operationally independent” what exactly does this mean in terms of Board members. How many Board members are Meridian board members or executives and how many are truly independent?
I will switch to Powershop if/when you come to Rotorua.
July 17th, 2009 at 11:07 am@John:
As of last month we now have an independent Chairman, and 3 Meridian executives. We have plans to recruit more independent directors later this year.
To me the important thing though is that Powershop has complete autonomy over whom it does business with (including Meridian’s competitors), we have our own wholesale trading operation and complete control over what products we sell and how we price them. This, combined with the control we have over the Powershop website/application means we can focus on delivering better value and better service to customers.
July 17th, 2009 at 11:48 amHi Ari,
Thanks for your comments.
How come powershop claims it ‘compares electricity suppliers’? (http://tinyurl.com/ns4qdb)
Where on the site can I compare Meridian prices to Contact Energy for example?
Is it im comparing againt Meridian prices, again, makes this bias.
July 17th, 2009 at 10:16 pm@Scott:
I have just realised that you were probably referring to the comment from Kirk.
Kirk is in fact a Powershop customer and has included a link to his website, confirming my earlier response that we have many customer who agree that switching is painless.
July 17th, 2009 at 10:17 pm@Jimmy:
You can compare Powershop pricing (or more correctly cost) with your current provider using our savings calculator (http://www.powershop.co.nz/savings).
As a customer you can also compare prices between the different products and suppliers who sell through Powershop. You can see a shop preview at http://www.powershop.co.nz/products.html
We are still in discussions with the other existing retailers to get them to sell products through Powershop. We are more than happy to have them participate - we have no bias in this regard, and our door is open to them anytime.
July 17th, 2009 at 10:22 pmI’d just like to check in and say that the changeover to Powershop was, indeed, painless. Seamless, even. The whole process was complete within two days. I’ve just gone through all my old bills and I’m currently saving around 20%.
I even had a query to the Powershop team that was dealt with superbly - after my email it took the team a grand total of seven minutes (!) to get back to me. It couldn’t be fixed immediately, but the Powershop staff member kept in daily email contact and the (non-time critical) issue was resolved within two days.
So, between signup, (short-term) prices and support, I’d have to give Powershop two thumbs up.
July 18th, 2009 at 12:17 am@Andrew:
Thanks for the vote of support.
July 18th, 2009 at 6:28 amWhat does it cost to subscribe to P/S?
July 27th, 2009 at 9:56 am@Stan:
There is no charge to switch to Powershop, unless your property has been disconnected and requires reconnection.
July 27th, 2009 at 11:13 amIf there is no line charge (or whatever it is called) if something happens to my cable or the are tree branches around it that requres trimming, who pays for those? I am interested but wonder if I can manage since I don’t know how to read meters and other “electrical” type of stuff. In other words, I am a lay person - completely!
July 28th, 2009 at 11:15 pm@Cassandra:
Powershop has no fixed daily charges for our customers, however we do still pay charges to lines companies. Who pays for lines maintenance will vary from area to area, but customers would normally be required to pay for any tree pruning on their own properties.
You don’t need to be able to read your meter to use Powershop, we will still read it monthy and send you an email each week that estimates how much power you are using. You might be surprised how easy it is to read your meter too.
We have plenty of lay customers that are happily using Powershop.
July 29th, 2009 at 3:42 pmSo will I be suddenly slapped with a big line charge at some point?
July 29th, 2009 at 11:24 pm@ Cassandra:
Here is an FAQ that may help explain it to you:
http://www.powershop.co.nz/faqs.html#powershopProductsAndPrices
Look at question: Why doesn’t Powershop have a fixed daily charge?
July 30th, 2009 at 6:07 amI have dual a/c with my elec provider; probably the biggest ripper-off in the industry. Are any other providers offering the dual discount for gas/electricity usage?
August 10th, 2009 at 3:20 pm@Lorraine:
I believe that Contact Energy offer a dual energy discount, and the Genesis offer loyalty rewards for dual energy.
You might also like to investigate signing up to Powershop for electricity and your gas somewhere else - you may find that you still save money.
August 11th, 2009 at 10:05 pmI’m a new (first time) home owner and doing a bit of power research. Went through the whole story of getting Big 5 prices and plugging them into an excel spreadsheet, then when all was done, somehow wandered into your site and saw your calculator had it all done already! Sigh…. was good to see that at least i had most numbers right tho! Is it possible to sign up the new house directly with you guys, or do I have to get one of em 5 first and then “switch”!
August 15th, 2009 at 1:25 am@Nick:
You can signup with us directly - simply complete the online signup process that takes less than 5 minutes.
August 15th, 2009 at 7:05 amHi Ari,
Just wanted to give an update - have been with PS for around 2 mths now and am loving it…
Here’s a list of my favourite things about PS in no particular order…
+ the graphs and other data
+ the cost savings
+ the control over and visibility of how much power I’m using
+ the CEO answering questions in the public domain, no matter how curly they are…
To anyone reading, who’s thinking of switching but can’t decide I’d say give it a go, you’ve got nothing to lose.
Thanks guys, keep it up. I’m looking fwd to how much I’ll be saving in summer.
August 15th, 2009 at 12:48 pmThanks Ari. Its a good sign to see the depth of feedback here from your customers - and depth of your replies, as Simon points out. I just wanted to ask a last couple qs:
August 15th, 2009 at 8:06 pm- Could I confirm if there will be an EC Levy increase from spring this year?
- Mercury have something called a Price Plan Rebate. Now its probably a gimmick, but do you know how they do this and does it have any ability to reduce potential savings between Mercury/Powershop over the year?
Ta Heaps!
@Simon:
Thanks for your feedback. Pleased to hear you are enjoying your Powershop experience.
August 16th, 2009 at 7:58 am@Nick:
I don’t have the EC Levy information to hand, however, these levies are changed from time to time. I will confirm on Monday when the next change will occur.
In relation to Mercury’s Price Plan Rebate, I suspect you are right - it is probably a gimmick. As far as I am aware there are only two reasons why a customer would be on the ‘wrong’ plan in the first place:
a) Mercury had made a mistake.
b) The customer would have been better off choosing (or not choosing) to be on a ‘Low User’ tariff.
In the first case, we would expect any retailer to put that right. As far as low user options are concerned, if a Powershop customer confirms their property as their primary residence (ie. it is not a holiday home etc) then we will ensure that you will never pay more than the low user price - this is equivalent to always being on the ‘right’ plan with other retailers. Our savings calculator takes all of this into account.
Hope this makes sense and is useful.
August 16th, 2009 at 8:07 amAri thanks for the detailed reply. Have signed up and now waiting to move into the new place so I can check out this simple, yet somehow, radical concept…
August 19th, 2009 at 10:27 pm@Nick:
Excellent. Welcome aboard.
August 19th, 2009 at 10:32 pmI’m very happy to be with Powershop but it has not been a painless switch for me. But it was still well worth the shift.
We’ve changed electricity supplier three times in the last five years. I found it easier changing the previous two times.
1. It took less time as I did it over the phone. Changing on the website took more time. Partly this is because Powershop is a more complicated proposition.
2. The changeover date was consistent the other time - one agreed changeover date. This time there were too many dates. I know that this is a relatively minor point but it introduces unnecessary confusion:
On 3 Oct. Powershop said the changeover would be about 5 Nov. In fact it has really come between 16 & 19 Oct. But my final Meridian bill says it estimates to 30 Oct. Given that Meridian & Powershop are buddies it shouldn’t be this vague!
3. When I signed up with Powershop I read my meter as requested. I then received two bills from Meridian: immediately the first for the meter reading; on 19 Oct. the second for the final estimate. The other times I received one final bill. So now I’ve had to make an extra bill payment as I don’t use direct debit.
4. This “pain” only applies to me as I have a spreadsheet with our electricity usage back to 1993. To cope with Powershop I have modify it. In some ways it will be easier to track most of our usage because I think we will be buying many monthly packs. But I will have a lot more transactions and I will still have to allocate some purchases across months.
October 24th, 2009 at 11:34 amI add that I track electricity usage because I like analysing data. We wanted to see a number of things:
October 24th, 2009 at 11:41 amWhat is the impact of deregulation - has it worked for us? I’d say not really.
What is the impact of us adding insulation, solar water heating, increasing hot water pressure, heat pumps, etc? We can identify specific savings.
@Mark:
Sorry that you didn’t find your changeover as painless as you and we would like. We have put a lot of effort into making our switching process easy, unfortunately it is the losing retailer that has most control over the switch. We are very keen to make this fast and simple and have proposed rule changes to the Electricity Commission to reduce switch to 3 days in most cases. These rules are now being processed, and hopefully will come into effect soon. Once this has happened a lot of the current issues should be resolved.
If you like analysing data you will love Powershop - you can easily see your current usage and all of your historic data is available to you to analyse to your heart’s content
October 24th, 2009 at 6:25 pmIf we were to change, we would need details of your service, particularly how you read meters and how often?
Thank you.
July 19th, 2010 at 11:50 am@Heather:
We read meters monthly in the main centres, and you can read your own meter as often as you like to keep track of your usage.
We also have some quite detailed information throughout our website, and particularly in our FAQ section.
If there are other questions that we have not answered please don’t hesitate to call us on 0800 1000 60.
July 19th, 2010 at 11:56 am