This report explains the utilisation of sales channels in the UK residential retail market. Its overall aim is to explain the balance retailers have to strike between sales volume and cost in the channels that they choose to deploy. It will provide insight into how suppliers have gained or lost accounts in managing their sales channels and will explain what accounts suppliers will have gained.

• Three case studies highlighting the dynamics that control the type of sales strategies pursued by suppliers depending on their long-term aims.
• An overview of the generic cost and performance metrics of each major acquisition channel.
• An explanation of the circumstances in which a supplier will retaliate when it loses accounts to a rival.


Highlights



56% of Tier 1 accounts lost by the Gas Incumbent are replaced with Tier 2 accounts, and 860,000 lost Tier 2 accounts are not replaced at all. A net loss of 860,000 accounts costs £46m per year to maintain, effectively paying £53 to lose each account.





The aggressive acquisitor overcomes the loss of 1.2m accounts to achieve a net gain of 685,000 accounts, but only 40% of lost Tier 1 accounts are replaced by more Tier 1 accounts - the rest are Tier 2.





Over the long-run, suppliers are trying to reach their optimum size, which may require increasing market share. In the short-run, suppliers will seek growth for as long as the returns exceed the costs and then may be locked into a mutually destructive sales war.



Reasons to Purchase


• This report will allow the reader to investigate the affect of adopting different sales channels within the context of the UK energy retail market.
• The reader can understand the sales dynamic between energy retailers by reading through three case studies that replicate sales activity during 2005.