Building trust in a low-trust, high-commodity category

# Building trust in a low-trust, high-commodity category

In April 2013 Ofgem fined SSE £10.5 million for mis-selling, after finding failures at every stage of its doorstep and telephone sales process, from the opening approach to the savings estimates given to households. It was the largest penalty imposed on a supplier for sales conduct at that point. Nothing was wrong with the electricity. The tariffs worked, the lights stayed on. What was defective was the promise wrapped around a product the customer had no way to inspect.

That case is the whole problem in miniature. When the commodity is identical and the price is bounded (Ofgem's default tariff cap has set the ceiling on standard variable tariffs since January 2019), the only thing left that varies between suppliers is whether people believe what you tell them. A price is a claim about one number this year. Trust is a claim about every future interaction, and it is the scarcer asset because it takes years to accumulate and a single quarter to spend. SSE left household supply altogether, selling its retail arm to OVO in January 2020.

This lesson assumes the switching profile the foundations lesson describes, and works on what happens in the long stretches between switches. That inertia cuts both ways: it shelters a bad supplier for longer than it deserves, and it means the trust you lose is not bought back with a cheaper tariff next spring.

Trust here gets built in three places: billing transparency, reliability signals, and complaint recovery. None of them is advertising.

What Bulb's collapse cost everyone else

Bulb grew to roughly 1.7 million customers on a pitch that read like a trust proposition: one simple tariff, no exit fees, green supply, plain language. Beneath it sat a thin hedging book. When wholesale gas prices climbed through 2021, there was no cushion, and Bulb entered special administration that November, the largest supplier failure the UK market has seen. It was one of around thirty suppliers to fail in that period. Its customer book was eventually sold to Octopus Energy, completing at the end of 2022.

The second-order consequence is the part marketers miss. Failure costs do not vanish with the brand. Under Ofgem's supplier of last resort process, the acquiring supplier can reclaim honoured credit balances through an industry levy that lands on everybody's bill. Households who had never heard of the failed brand paid for its pricing. The total cost of the 2021 failures ran into billions of pounds, and the reputational damage was category-wide rather than brand-specific: consumers came out of that winter warier of every small supplier, including the well-run ones.

So a low headline price is a promise about a future you may not be able to keep, and in this sector the failure mode is not a bad review. It is administration, a forced migration, and a levy on your competitors' customers. A growth claim in energy is underwritten by a hedging book that no customer ever sees.

Lever 1: billing transparency

The bill is the most-read document your company produces, and for most customers the only one. Treat it as a marketing asset, not a legal formality.

The classic trust-killer is bill shock: an unexpectedly high charge with no explanation attached. It drives complaints, churn, and regulatory attention, in that order.

• Show the "why" behind changes. If a bill rose, say whether it was usage, weather, or a rate change. "Your usage was 30 percent higher during the cold snap" defuses anger far better than a raw figure.
• Explain estimated versus actual reads. An estimated bill (projected usage, not a real meter reading) confuses people. Label it and tell them how to submit their own reading.
• Break out the standing charge. That fixed daily fee, payable regardless of usage, ambushes low-usage customers and generates the "why am I paying when I was away?" call.
• Define your own jargon on the document. kWh, tariff, standing charge.

Smart meters make transparency cheaper but do not deliver it. Raw half-hourly data means nothing to a household. A comparison against similar homes does the work.

For how a regulator frames fair treatment, see Ofgem's consumer guidance at ofgem.gov.uk. The principles apply across deregulated markets.

Lever 2: reliability signals

Reliability is what customers actually buy, though they never think about it until it fails. The problem: how do you get credit for something invisible that works 99.9 percent of the time? You make it visible at the moment it matters.

Proactive outage communication. During a storm, the network that texts "we know your power is out, crews are on site, estimated restoration 6pm" earns goodwill before the lights return. Silence breeds rage. The information is often worth more than the speed.

Restoration transparency. A live outage mapmapUsing software to automate repetitive marketing tasks and campaigns, enabling personalisation at scale across channels like email, web, and social.View full definition → that updates honestly beats "we are working on it." Customers forgive a slow fix more readily than being kept in the dark.

Publish the metrics. The industry uses SAIDI (average outage minutes per customer per year) and SAIFI (average number of interruptions). Publishing them, with year-on-year movement, turns an operational statistic into a trust signal.

Frame investment as service. Grid upgrades show up on the bill. Connect the cost to fewer outages and faster storm recovery, or it reads as a rate rise with a press release attached.

🎬 [VIDEO: "How the Power Grid Works" - youtube.com - a clear, non-technical explainer of electricity delivery from generation to your home, useful for grounding reliability messaging]

Lever 3: complaint recovery

A customer whose complaint is resolved well can end up more loyal than one who never had a problem. That is the service recovery paradox. It does not always hold, and engineering problems to exploit it is idiotic, but it tells you where trust is genuinely won.

Billing errors, outages, connection delays and failed transfers are unavoidable. Each is a fork. What good recovery looks like:

• First-contact resolution. Every transfer compounds the frustration. Give frontline agents the authority to fix things.
• Acknowledge before you solve. "We see the error, we are fixing it, here is your reference."
• Credit proactively. If you billed wrong, refund without a fight. The goodwill outweighs the cost.
• Close the loop. Say what happened and what changed.

Octopus Energy built its reputation here rather than on price, repeatedly topping Citizens Advice's quarterly supplier ratings while running its own billing and service platform, Kraken, which it also licenses to rival suppliers and so has a commercial interest in the argument that systems drive service. The point stands regardless: its scores came from response times and agent authority, not campaigns. Inheriting Bulb's book then tested it, because a service reputation earned on your own customers has to be earned again on someone else's, mid-migration, with those customers already angry at a brand that no longer exists.

Pair NPSNPSNet Promoter Score (NPS) measures customer loyalty by asking how likely customers are to recommend a brand, then subtracting detractors from promoters.View full definition → with complaint resolution rate and repeat-contact rate. Those two reveal whether recovery is real or theatre.

Putting the three levers together

In a commodity category, trust is built operationally and then communicated. Your most productive marketing line item may be the outage notification system or the bill redesign rather than media spend.

A working model: every negative-attention moment is a brand deposit or a brand withdrawal. There is no neutral. It also settles an internal argument. Marketing in energy cannot sit apart from billing, operations and the contact centre, because those functions are the brand experience.

When the claim outruns the evidence

Mis-selling is rarely a rogue agent. It is an incentive design: commission paid on sign-ups, against a saving the customer cannot verify until the third bill arrives. SSE's £10.5 million penalty was for a system, not a person, and Ofgem has since fined suppliers over billing and complaint handling too, npower's £26 million package in 2015 among them. Regulators have also pushed into the business side, requiring more transparency about broker commissions on microbusiness contracts, where the buyer is small, unprotected by the domestic cap, and rarely reads the terms.

The test to apply before any claim ships: can the customer check it, and what happens to them if it turns out to be wrong? A saving estimate that assumes usage the household does not have will be discovered. Renewable claims carry their own version of this risk, which the green tariff lesson handles.

The edge case worth holding on to: silence is a valid option. In a category where the customer's prior is that you spin, an unverifiable claim is worse than no claim, because it confirms what they already suspected.

Key Takeaways

• Trust is the scarce asset, not price. With a cap on the tariff and no difference in the product, credibility is the only variable left, and the SSE fine shows how a sales incentive can destroy it faster than any campaign builds it.
• Cheap growth is a promise you may not be able to keep. Bulb's collapse moved 1.7 million customers, cost billions, and put the bill for one company's pricing on everybody else's account.
• The bill is the brand. Explain the "why" behind every change, define your own jargon on the document, and kill bill shock with context before the customer calls.
• Make reliability visible when it fails. Proactive updates and an honest restoration mapmapUsing software to automate repetitive marketing tasks and campaigns, enabling personalisation at scale across channels like email, web, and social.View full definition → buy more goodwill than the speed of the fix. Publish SAIDI and SAIFI.
• Win the complaint. Recovery done well beats a frictionless experience, and a reputation for it does not transfer automatically to an acquired customer book.