Saturday, July 21, 2018

Sick of Moneysupermarket’s He Man and Skeleton ad campaign? Bad luck. They’re not going anywhere and it could be there’s worse to come.

Imagine a horrible hybrid featuring the much complained about twerking man gambolling around with them. There’s something to make you shudder.

If that horror appears, and I wouldn’t put it past the company’s ad agency, you can blame Theresa May’s government for making it necessary.

You see the PM’s energy price cap potentially creates a big problem for the company that may take all of its considerable marketing skills to overcome. 

The cap is designed to protect 12m customers on standard variable energy tariffs, which are vastly more expensive than the best deals listed on Moneysupermarket’s site, and those of its  competitors. Hundreds of pounds in some cases. 

These tariffs are a rip off, but they are very easily avoided now, months before the cap will arrive. Just head on down to the web cafe at Castle Greyskull (as any Generation X kid should know, that’s where He Man hangs out). Alternatively you could just use your smartphone. 

The cap brings with it a risk that people will stop doing that, which will hit businesses like Moneysupermarket that draw their revenues from switching.  

The latter’s Home Services division, which includes energy, showed a 1 per cent fall in those doing the third quarter of 2017, against a 6 per cent rise for the group overall (driven by insurance switching). 

However, the previous couple of quarters showed much steeper declines, and the company says the unit has started to pick up. 

Part of the reason for that might very well be the debate over energy prices driven by the Government’s reheated interest in the cap, which has raised consumers’ awareness that they could very easily save money without  it. 

However, it may not last. Chief executive Mark Lewis sees the danger the cap poses when it eventually arrives. 

“Our message to customers is clear – don’t kid yourself that the energy price cap will be the answer, if you haven’t switched recently you can quickly and easily save £250 today, by switching to a competitive fixed rate,” he said, as the company updated the market on trading for the third quarter of 2017. 

But how to get that point home? There are still millions of people who could switch, but don’t. If the cap does increase their number, it could make the UK’s domestic energy market less competitive, and, ironically, serve the interest of the big six suppliers that made it a political hot potato in the first place with their aggressive pricing and shabby service. 

In policy terms it would have been far better to focus a cap on vulnerable people (which is what regulator OfGem has been doing, if slowly), while leaving the rest of us to sort ourselves out.

But we have a pitifully weak, and widely disliked, Government  in need of some positive PR.

Unfortunately for Mr Lewis, the cap ticks that box. He’ll just have to encourage his admen and women to do their worst.