What even are they?
Win-backs refer to when you decide to switch for a better deal, but then suddenly your old electricity retailer decides they love you after all and whip out an amazing deal to convince you not to leave. Sneaky aye? Why didn’t they love you before?
See, we think you should get the opportunity to choose between all the available plans, and that there shouldn’t be any secret plans that magically appear only when you decide to leave.
Imagine if your landlord charged you too much for years then when you go to move, they offered you a rent decrease to stay? You’d be gutted right? Why was I paying more before you would think? It’s the same house!
At Electric Kiwi, we believe in a fair deal for everyone, that’s why we publish all of our prices so our customers can see all the deals we offer. We have different plans, but they have different benefits, that’s fair, we don’t charge some people more and some less for exactly the same thing!
We are all for competition and innovation, and we totally understand that some people prefer different options, some might prefer different price plans, like paying in advance for a discount, committing to staying for an agreed term for a better rate or some might prefer the flexibility to leave the moment service doesn’t meet their expectations.
We think every price should have quid pro quo and should be published so that customers know their options all the time.
Transparency sucks said no one, ever right?
In the long term, there is an impact that we think is really unfair. You see, the losing retailer knows all about the customer that’s leaving, and they use that information to decide who gets what deal. This means that people who struggle to pay or have low usage might not ever get a winback, instead, their retailer will keep them on the highest rate they can until they leave.
As a result, according to EMI, there is a gap of $371 million dollars per year between the price kiwis pay and the best price in the market. We call this number a “loyalty tax” where loyal (or in reality less mobile consumers) pay more and subsidise those that switch or get offered better rates when they try.
We actually care about fairness, and we think that stinks.
Another impact in the long term is that it makes it really hard for competition – yeah like us – to thrive, because we end up competing and winning only the customers that the big guys let us have.
In NZ our market relies on the competition that retailers like us bring to the market, in order to keep the big guys honest. Without competition, there would be no win-back offers, and in fact, everyone would just get the rack rate the big guys advertise.
There are a few proof points we reckon are quite interesting. In telecommunications, winbacks do not occur because of the regulations. As a result, you will notice that for example prices for broadband are advertised in the media, because there are no secret prices, and there isn’t a big gap between the best rate and the rate most people are on. In general, if you pay less, it is because you use less, and that is much more fair.
Our advice?
If you switch to us or any other retailer and you receive a counter offer, only accept it if they agree to back date it to when you signed up with them because if they are offering you a better rate now, for the exact same plan, they have been ripping you off for ages.
