Tyers, R.Cheaper market offers letter trial – Research results


Roger Tyers 

November 2017

Behavioral Insights Unit, ofgem

This paper reports the results of the Cheaper Market Offers Letter (CMOL) trial, which Ofgem carried out between June and August 2017. This was the first in a programme of trials using our new licence powers and was conducted in collaboration with two domestic energy suppliers. The trial tested a prompt to encourage engagement in the energy market, specifically among dual fuel customers who had been on standard variable tariffs (SVTs) for over a year. The trial was informed by the Competition and Markets Authority’s 2016 package of remedies to address weak customer involvement in the energy market.

The design used was a three-arm randomised controlled trial (RCT), with a sample of 137,876 customers. The RCT was followed by qualitative telephone interviews with 91 customers who had received letters in the trial. The prompt tested was the CMOL: a single, standalone letter, designed to encourage SVT energy customers to switch to a cheaper tariff. The letter displayed three cheaper tariffs offered by rival suppliers. The tariffs on each letter were personalised to customers, based on their consumption in the previous year and their existing payment and account management methods. The two suppliers involved in the trial posted the letters and provided customer-level data to us. The three arms in the trial were: a letter branded by Ofgem (Ofgem arm), a letter branded by their own supplier (Supplier arm), or no letter (control group). The primary outcome measure was whether customers switched (supplier or tariff) within 30 days after letters were sent.

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