Sources affecting electricity supplier switching from a relationship viewpoint - A multiple case study in the Dutch, Flemish, and Finnish markets

Abstract

The deregulation of electricity markets gave customers the right to choose their supplier freely. This has lead to companies’ increasing interest in retaining customers. The main objective of the study was to increase understanding of the sources and triggers affecting customers’ decision to switch electricity supplier. The analysis was done from a relationship viewpoint in a context of a specific national electricity market. The markets chosen for comparison were the Netherlands, Flanders and Finland. The study was conducted as a multiple case study.

The theoretical framework was based on previous research on consumer relationships and switching behavior. Certain characteristics of the electricity market as a relationship environment were examined in their relation to customers’ willingness to maintain relationships. Specific characteristics of the relationships affecting customers’ proneness to switching were also identified. Switching is seen as a process and the role and origin of switching triggers as a part of that process was further analyzed.

The aim of the empirical research was to find out the key triggers that facilitated supplier switching in the three national electricity markets. Phone interviews of the case companies’ lost customers were conducted. The results revealed that customers are not committed to the perceived supplier relationships and that the competitor’s price at the exact moment of switching was the main trigger for supplier switching. Customer awareness of the benefits of switching seems to increase over time, making the subject important for electricity suppliers in the future.