Archive - Win-backs and saves

By contrast, in the retail electricity market, the incumbent retailer is notified that a customer intends to switch before the process is completed. The incumbent may use this information to seek to ‘save’ the customer.

The competitiveness of the retail market is driven in large part by acquisition activity and the threat of acquisition activity. Saves can make acquisition activity less rewarding, because a proportion of customers cancel their switch before it is complete.

Further, saves may have a disproportionate effect on the profitability of acquisition activity, because they reduce benefits without reducing campaign costs.

Saves may also make it difficult for small and new entrant retailers to have confidence that they are competing on a level playing field with incumbent retailers.

In some other sectors where retailers receive advance notice of impending customer switch decisions (such as New Zealand telephone landlines), saves are disallowed.