Blog Post

How Can Energy Suppliers Increase Customer Engagement?

Paul Fox • Feb 14, 2019

Energy suppliers are having a tough time right now. Not only is the market a highly competitive place to be, customer loyalty is more or less non-existent.

 

It’s clear to see why. The digital nature of our modern lifestyles means our customers can compare deals for energy supply and switch suppliers in ten minutes or less. While this is great for the consumer, it’s not so good for the suppliers who don’t always fall to the bottom of the comparison tables.

 

Recognising the importance of loyalty is key to driving better customer retention. An engaged and happy customer base is likely to see the value in staying with their supplier, even if another competitor is a few pounds a year cheaper.

 

Let’s take a look at what the problem in the energy supply industry is, and how to set up an energy supply company that rewards, retains and drives loyalty among its customers.

Why don’t energy suppliers reward loyalty?

Staying loyal to independent energy suppliers has never been particularly rewarding. While big stores and brands offer a multitude of perks to customers who return for repeat business, the energy industry seems to have missed a trick.

 

Traditionally, customers who outstay the length of their contract will be placed on punishingly high standard variable tariffs (SVTs). Even those with the sense to attempt to renegotiate a new fixed deal will often fail to secure the same attractive offers as a new customer.

 

Consequently, the exodus of otherwise happy customers continues. Last year’s record levels of switching activity, with one in five customers changing supplier, will only continue to increase unless we can find a way to keep those customers coming back for more.

 

British Gas have gone someway to demonstrating how to engage and reward their happy customers. British Gas Rewards launched in April 2017, and by the following January over 700,000customers had signed up. Despite this, the company lost an average of 90,000customer accounts over the course of 2018, and they’re not the only one.

 
SSE posted a profit warning at the start of February, amid losses of 160,000 accounts in the last quarter of 2018. Npower lost half a million in 2018, and with the
price cap beginning to bite, this trend will only continue.

 

The reality is that this has never been an industry of rewarding loyalty. It’s been a ‘race to the bottom’ of the comparison tables, funded by higher tariffs paid for by those who stay for the longer term. For energy supply businesses to stay profitable and competitive in an evolving marketplace, something has to change.

 

Increasing engagement – top tips for success

Utility companies need to switch their focus from new acquisitions to better retention if they are to survive the ongoing cull of independent energy suppliers. Here are some top tips to help boost the engagement you’re getting from your customers:

1. Get personal

 

Approaching new customers and engaging with existing ones in a personal, tailored way is a proven strategy that’s had great success in other industries. Think about how brands you’ve shopped with in the past send you birthday offers, or notify you of new products that you’re genuinely interested in.

 

Being more personal in the way you communicate with your customer base will help you tailor offers and promotions to them. Modern energy supplier CRM systems have the ability to let you profile your customers much more deeply, letting you really get to know who they are and what they need from you.

2. Deliver a flawless service

Customers don’t spend a lot of time thinking about their energy supply, at least not until something goes wrong. Use these rare opportunities of engagement to really exceed expectations in order to foster loyalty and goodwill between your brand and your customers.

 

Think about the times they need to contact you. Are you responsive? Is it easy to get in touch with you in the way they prefer? And if there’s an issue, are you quick to respond and puta satisfactory resolution in place? Ironing out the creases in your customer service will ensure every interaction is a positive one.

3. Make your brand an intrinsic part of their life

Finding more opportunities to engage with your customers and become part of their daily routine is crucial. If you’re just the faceless company who keeps taking direct debits, why should they feel any loyalty to you?

 

Step up to modern needs and be the brand they turn to for advice and support on all aspects of their energy use. Proactively suggest smart home improvements (perhaps even offering a discount to your loyal customers) or provide personalised information on how they could save energy. Be more valuable to them, and the goodwill will flow.

4. Reward loyalty

 

It’s a bit of an ‘out there’ idea, but what if you didn’t force your loyal customers to fund the super low tariffs you use for acquisition? What if, instead, they actually got to drive down their rates by staying with you longer? Offering competitive prices to your existing customers makes sense, as its always cheaper to keep an old customer than it is to set up and administer a new one.

 

Loyalty programmes are everywhere. From our Tesco Clubcard to our Amazon Prime rewards, we expect companies to treat us well if we continually do business with them. A handful of independent energy suppliers already offer perks to long standing customers; it’s a strategy that’s worked wonders in other industries and a route worth exploring.

 

Boosting customer engagement is no small task, and not something which is going to be achieved overnight. Using a capable energy supplier CRM system will help you gather valuable insight into who your customers are, and what their pain points are likely to be.

 

Tackling these pain points to give them a smoother, happier experience overall will help to make your business stand out from the crowd. Then, you’ll be able to enjoy better retention of your existing customers and an audience more engaged with your brand.


Dyball Associates are proud to help new supply businesses successfully launch in the UK market.

 

Through our energy market consultancy services, and the software we've developed, we're supporting new UK electricity and gas suppliers get set up and start supplying.

 

Follow us on LinkedIn to keep up to date with the latest news and updates in the energy industry.

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