Our Business Model
We have a unique, self-reinforcing and long-term business model. As the UK’s only multi-service utility provider, we offer energy, broadband, mobile and insurance services, as well as a Cashback Card which provides extra savings at a wide range of retailers. The cashback available to our customers increases with the number of services taken. We bundle essential home services together to give UW customers peace of mind, sustainable long-term savings, a simple single monthly bill, and award-winning customer service; these ensure our customers stay with UW for far longer than our competitors. The combination of higher revenues per customer (from taking multiple services) and lower churn generate a significantly higher average customer lifetime value.
By having a single set of central overheads for our multiple revenue streams, we are able to make substantial cost savings due to operating efficiencies. Therefore we have a sustainable, structural cost advantage which enables us to offer the best value across our range of services and offer significant savings year after year.
Our Partner network gives us a unique way of acquiring hard-to-reach multi-service homeowner customers. The perceived effort of switching multiple services can be high amongst consumers, resulting in conventional advertising approaches typically failing to successfully convert customers to a multi-service proposition. In contrast, a conversation with a trusted Partner can provide first-hand reassurance and explanation of the switching process – often based on the Partner’s personal experience – thus helping to overcome the natural inertia associated with switching multiple essential household services simultaneously. As well as being trusted, our Partners benefit from referring their friends and families to UW’s truly compelling customer proposition comprising market leading savings, award-winning customer service and the simplicity of a single bill and app.
This approach enables us to successfully grow our multiservice customer base in a way that other customer acquisition strategies cannot replicate.
Delivering higher profits and double digit customer growth in rising, falling and/or stable energy price environments
When energy prices are rising/higher, we have additional margin available to deploy in acquiring new customers, making our new customer proposition relatively stronger, and our growth rate correspondingly higher - with our competitiveness further helped by the fact that during these periods it is more expensive for other suppliers to offer attractive fixed acquisition tariffs. As a result, we would expect to see faster organic customer growth during such periods (as achieved in FY23). And of course, when energy prices are falling/lower, as has been the case over the last year, the converse is true, but with customer growth in FY24 still comfortably in double digits.
Unique multi-service bundle
We enable customers to choose the essential services they want and bundle them together to create a unique multiservice proposition. These include energy, broadband, mobile and insurance services as well as a pre-paid Cashback Card. These bundles provide:
- Simplicity: a single simple bill for all their home services;
- Savings: compared with the prices they were previously paying; and
- Service: an easy to use customer app backed up by award-winning support teams.
By offering customers the ability to receive all their essential home services on a single monthly bill, and manage them on a single app, we deliver a straightforward and cost effective experience. The more services customers take from us, the more they save. Annual savings average over £300 for customers taking all four services, with additional average savings of over £160 per year available to regular users of the Cashback Card.
A key component of our model is securing high quality and reliable wholesale services from established providers, which we then bundle together for our customers’ benefit. We source our energy from E.ON, access Openreach and CityFibre broadband via PXC, and we utilise the EE network for mobile services. We have also established insurance relationships with major insurers alongside our own insurance company, UWI.
Unique structural cost advantage
Our unique multi-service customer proposition allows customers to bundle many of their essential household services together with us. As a result, we receive up to four revenue streams from each of our customers but have just one single back office supporting all the services we provide to them. This gives us an inbuilt and enduring cost advantage that our competitors have been unable to replicate and which we share with our customers yearon-year through competitive prices.
This long-term, fair pricing approach, enhanced by top-rated customer service and the convenience of having one bill, one account, and one app to manage all their household services, builds loyalty amongst our customers to our brand; as a result, our typical homeowning customers display below-market rates of churn and bad debt, compounding our cost advantage.
A unique word-of-mouth model that creates earning opportunities
The key to acquiring new multi-service customers is our unique and hard-to-replicate word-of-mouth acquisition model. Our network of over 70,000 Partners is motivated by the opportunity to earn additional income in the context of continuing cost of living pressures, the satisfaction of helping people to save money on their essential services, the need to save for retirement, and a long term structural trend towards multiple incomes which now comprises over 20 million individuals in the UK.
Our Partners receive a monthly commission based on the services being used by the customers they have referred, with the opportunity in some cases to choose to receive a prepayment of some of this future commission as a lump sum. As Partners refer more people to UW who then choose to sign-up as customers and as more new Partners are added to their teams, their income stream can continue to grow, creating truly life-changing potential earnings opportunities. As customers benefit from exceptional value, great service, and a more convenient way of buying their essential household services, and Partners can build a valuable residual income stream, there is a genuine alignment of interests between our Partners, customers and UW.
