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Is the UK low carbon heat market ready? A case study of a customer who CAN’T buy a heat pump

As part of its on-going research program the Microgen Insight Service team carried out in-depth phone interviews with owner-occupiers. This included interviews with on-gas and off-gas owner occupiers, and specifically with a small number of owner-occupiers who are planning to install, or have just installed a microgeneration technology.
 
While the results again reiterated issues around cost and fear (see previous post Growing Awareness of Microgeneration is Stifled by Fear) they also revealed some new insight into how customers think about purchasing microgeneration - in particular around controls, interaction with their system, and how they move beyond general interest to what, where and how to buy.   
 
Is the industry ready to deliver?
 
One critical question the interviews raise is whether the industry is consistently ready to deliver microgeneration technologies to customers. In particular the low carbon heat technologies which are a much more complex sale than PV, for example. Undoubtedly RHI delays and uncertainty have reduced investment along the supply chain to build slick sales processes for the future -  but is the industry maximising its current sales opportunities – and effectively capturing those customers who are ready to buy today?
 
The interviews reveal that the purchase process today for low carbon heating is not always straightforward and effective. The customer sales journey can be long, complex and overly onerous – often heavily reliant on the quality and reliability of individual installers.  Critically there is a lack of a reliable trusted source of information, and in some cases customers have to spend a lot of time and effort in the purchase and installation process, which results in frustration and ultimately apathy.
 
Consider respondent X below – this respondent is a textbook “perfect” customer for microgeneration:
 
RESPONDENT X – Planning to Install an ASHP
 
Profile:
  • Off-gas – currently uses LPG
  • Financially secure – with approx. £8,000 - £10,000 to spend on a renewable heating system,
  • An investor -  thinks of installing a renewable heating system as an investment for the future, considers payback
  • A non-mover – settled, no plans to move house
  • A researcher – has done considerable research into different technology options, has already decided they would like an air source heat pump
  • A “green” customer – already has solar PV installed
Customer journey:
 
Phase 1: Research – an interested customer who goes out of their way to find out relevant information, research via the internet and by contacting the relevant associations. Decision to look into new technology following a recommendation from an insulation installer
 
“I’ve done a lot of internet research…I even went as far as finding a ground source heat pump association who gave me some names”
 
Phase 2: Decision point – customer decides ground source heat pumps are too costly for them, but decides they would like to install an air source heat pump, they are looking to cut their gas bill and have worked out the rough payback on a system based on online information
 
Phase 3: Quotation – getting a quotation was surprisingly difficult. Onus is on customer to follow up and after 6 months only 2 quotes have been delivered, neither of these installers have actively tried to follow up on the potential sale
 
“I’ve contacted 12 companies [about ASHP] - only four responded, two of those said they would call to set up a visit then didn’t, one came to see me and quoted but I never heard from him again after I go in touch and the fourth didn’t come to see me in the end but gave me a quote”
 
Phase 4: Outcome – customer apathy, why should I be chasing them? Unless the installer gets back in touch the customer is likely to abandon plans to install
 
“I’m standing here with £8K and saying somebody please come and give me one of these things and the industry is saying no”
 
“It’s been a great frustration. I’ve got to the stage now where I’ve just lost interest”

 
So what?
 
So what does this tell us? It’s only one customer – an anomaly or representative of the market? We believe somewhere in between. In a separate “mystery shopping” exercise we had some excellent experiences, but several where we really had to chase and push to get a response to our sales inquiry.
 
This highlights that there are key challenges in the market today:
  • The installer – who can be the ‘face’ of a brand - is a critical link in the sales journey, and is not always effective in facilitating a smooth customer journey.
  • Other ‘larger’ vendors offer a mixed experience – some excellent – in particular ‘renewable energy specialists’, but some very poor
  • Customers desire for a single point of contact in their sales and installation journey is not always being met
  • There is a lack of a trusted advisor in the market – an opportunity for companies to ‘claim’ this ground?
  • There are some customers ready to buy today, but some are being frustrated by unresponsive installers and vendors.
 
Subscribing to our Microgen Insight Service will help your business to make the best decisions today and develop the right propositions for the right customers. For more information email me at [email protected] or call me on +44 (0) 131 625 1009.
 

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Sunday, 20 October 2019

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