Virgin online utility firm returns to traditional channels

In an exclusive interview with silicon.com, Jon Kinsey, MD of Virgin Energy, said it allows customers to pay over the phone as only a minority of retail customers will pay bills online.

Virgin Energy was launched in July 2000 with customers being urged to sign up on the web. However, the firm now takes orders over the phone in an attempt to attract more customers.

Kinsey told silicon.com "Offering services over the internet is cheap, it's innovative and it's creative for the market - all things Virgin wants to be. However, we always knew that transacting over the internet for utilities would only appeal to a relatively small group of people."

He added that Virgin wants to differentiate itself from competitors by its level of customer service and has implemented sophisticated CRM systems to manage customer demand. However, Virgin's call centres are not actually run by the company, but by its more traditional utility partner in the venture, London Electricity - itself a subsidiary of French incumbent Electricite de France.

Virgin insists it is on track to meet its target of 200,000 users by the middle of 2001.

However John Evans, marketing director at rival Powergen, said the web will not always be a minority channel for paying utilities bills. He told silicon.com: "At the moment the amount of people paying online is minuscule, but over the years it will become increasingly popular."

Evans added that when integrated billing over the internet arrives - allowing consumers to pay for all their utilities online on one bill - then consumers would really start to see the advantages.

Analyst Bill Swanton, VP of the utilities practice at AMR Research, agreed that the web would grow in popularity for paying bills online. He said: "In five years time I don't think the internet will be a minority channel."

At present, online customers of the Virgin Energy service, which offers both gas and electricity, can set up a direct debit online, but are unable to view the details of their bill. Virgin says this functionality will be added later in the year.

To watch the full interview with Jon Kinsey, click on the above link.