Gone are the days when loyal customers were valued and given extra bonuses for their loyalty. The retreat from this practice began when companies operating in consumer markets and eager to attract new customers believed that offering reduced rates to new customers alone would boost their quest for market share.

The biggest culprits were banks, insurance companies, telecoms and essential utilities. They all offered exceptional introductory rates in the hope that customers, usually tied in with direct debit accounts, and would fail to notice the increases when it came to renewal. And here we had the inception of a new market model which is now today's norm.

The more loyal you became the more you pay.

But for those who dared to question the renewal rates or God forbid, shopped around, there were the infamous 'save tools'. Suddenly there was a reason why the insurance company could match the quotation received from a competitor.

Now it was always believed that companies would never get away with such practices in the business to business sector. Businesses would see through these dubious practices and would use the introductory offers to cut their costs, switching to a new introductory offer the following year.

Well those who thought this were wrong.

First the banks began to offer low or zero cost banking to new customers with no significant exodus after the first year. The rest followed in their wake culminating in deals from the previously 'one price fits all' utilities.

And to their delight they discovered the real benefits of business inertia.

Business electricity suppliers have adopted this worst practice - 'new customer only' pricing polices and the SAVE toolkit.

This has given business electricity suppliers a buffer in which to recruit new customers with even more attractive rates whilst the 'loyal' customer is forced to subsidise this new acquisition.

Customer loyalty counts for nothing.

Customers should be able to trust their business electricity supplier to give them the same price as they offer new customers.

electrity4business, the independent business electricity supplier, said "these new customer only pricing policies are shocking. There isn't any reason why an existing customer should be offered a worse price than new customers. After all it costs the supplier more money to taken on a new customer" ?.

Businesses can have the last laugh!

Business electricity customers should make sure that they don't accept hiked up renewal prices and insist that their current supplier gives their 'new customer' price.

Businesses should vote with their feet by rejecting the renewal prices, cancelling the existing supply contract at the end of term and make the incumbent supplier provide them with new customer prices.

Garham Paul

Sales and Marketing Director - Electricity4Business Ltd.

E4B is Britain's independent electricity retail company specialising in the supply of electricity to small and medium sized businesses.

E4Bs aim is to cut the cost for British business by offering lower prices.

Our business electricity services are for small or medium sized business spending less than £20,000 per year with their current electricity supplier.