Energy providers are having a tough time at the moment – not only are they facing a super-competitive market, but customer loyalty has more or less vanished. It’s easy to see why: today’s consumers can shop around for the best deals and swap suppliers in less than 10 minutes. And that’s the good news. The Government’s plan to cap standard variable tariffs is only going to make customer retention even harder for suppliers.
Data from Ofgem showed that a staggering 7.7 million energy customers switched suppliers last year -that’s a 28% increase from the previous year, making this an astonishing six-year high. The problem is that today’s consumers are much less loyal to specific energy suppliers than they used to be. What does that mean? Utility providers need to get moving if they have any hope of holding onto their customers.
Recognising the value in loyalty is the place to start. No matter how good a service is, consumers are always looking for more, so suppliers need to up their game. Luckily, there are some simple tactics that companies can use to stand out from the competition.
Show loyal customers some love
Lots of companies make the mistake of spending all their time on attracting new customers – but what about showing some love to those people already on the books? It actually costs much less to keep hold of existing customers than it does to get new ones – so this should be a no-brainer. Energy suppliers can start by giving loyal customers access to exclusive services that add value rather than just offering competitive prices. This will not only improve the sentiment a customer has towards the supplier, but could also encourage them to shout about the added extras too.
Choose a partner
It’s every supplier’s dream to convert passive consumers into brand advocates – but how can they do it? By becoming more than just an energy supplier. Loyalty programmes should include offers and discounts that customers will really want – by working with partners like supermarkets, cinemas, restaurants and more.
British Gas launched a £100m customer reward programme earlier this year which included special deals on boiler servicing and insurance – but also looked beyond its own services by partnering with companies like Sky to offer discounted Sky TV packages. Octopus Energy did something similar. They partnered with Arsenal FC to offer a special ‘branded tariff’ that allowed customers to join in monthly prize draws to win loads of football gear and tours of the Emirates Stadium. For customers, they will have enjoyed an experience or won a prize all thanks to their energy supplier, introducing a positive sentiment that really reinforces brand loyalty. The key is to build a strong bond between the brand and positive emotions.
Think digital first and consumer convenience
Customers hate to waste money – but they also hate to waste time – so suppliers really need to think about convenience when they’re planning a loyalty programme. After all, even if suppliers are offering the greatest rewards in the world, no one will ever redeem them if it’s a hassle to do.
Instead, energy providers should be looking at stuff like mobile apps and website portals – it’s nearly 2018! This will give suppliers more opportunities to interact with their customers than ever before – whenever and wherever the customer wants to get in touch.
This is huge, because customers are way more likely to use an app on a frequent basis if they have a good experience with it, so suppliers need to make that happen if they want to build customer relationships that last.
Personalise your offering
When it comes to rewarding customers, suppliers should forget about finding a ‘one-size fits all approach’ – there is no such thing. Technology makes it very easy for energy providers to get tons of useful information about their individual customers these days – so why not use it? This insight can help companies create targeted promotions, inspire loyalty and make the brand more appealing.
Today’s customers are better informed and more empowered than ever before – so suppliers need to get them on-side fast. The best and easiest way to do this is by giving customers the rewards they really want, again and again, so that they’ll keep coming back for more.
Chris Baldwin is the director of Consumer Promotions and Loyalty at Sodexo Engage, specialists in employee and consumer engagement.