The views of Fulvio Furbatto on Promotion Magazine

The utilities world is rapidly changing. Businesses are metabolising current changes by organising strategies to manage a market that is quite different from the past. Renewable energies, energy efficiency development, digitalisation of supply and customer centricity are no longer a threat, but rather opportunities to be seized.

Let’s focus on “customer centricity” which, since the liberalisation of the market, has taken on an increasingly strategic role. Over the years, users have acquired the capacity to choose from an ever-expanding and ever-evolving offering. Suffice to say that the average churn rate across Europe varies from 1.5% to 6.3%. Blowing the competition away is Portugal, which has the most volatile market with abandonment rates at 31.1% (Source: CEER Report 2016 – C15-CEM-80-04). In the UK, the switch rate rose by 15% in 2015 alone, involving around 6 million people.

Against such a backdrop, retention is no longer an option. It is becoming increasingly necessary to consider behavioural loyalty schemes in order to gratify and captivate customers in a personalised way, not least with a view to cost optimisation.

The aim? To start up a dialogue with the customer based on activities that are not just related to renewals, but which offer a customer-centric experience, by providing additional or complementary services to make customers’ lives easier, from even the simplest of operations such as viewing and paying bills or communicating counter numbers.

Recent surveys have shown that customer disaffection is not necessarily linked to the costs of a service, as has often been shown by switching over to a new supplier. More commonly, users are looking for a different customer experience that better meets their needs – from timely customer service and transparent communications from the company to the possibility of reaping real benefits. A case in point is E.ON in the UK, which activated a co-marketing scheme with Tesco, whereby customers can pay their bills using the loyalty points earned when shopping.

Utilities brands have to work to change the perception of the market and, above all, of the users: behavioural loyalty schemes help the brand to be perceived not so much as a “service provider” but rather as an active player in the customer’s life, an entity that can personalise the service it provides, offering added value by, for example, giving tips on saving money and encouraging virtuous behaviour.

The increasingly widespread use of digital tools allows user behaviour to be mapped easily. Even from the browsing stage, brands can monitor the behaviour of anonymous users to collect valuable information and implement strategies to attract them with customised offers. For existing customers, however, it becomes important to plan loyalty pathways that are customised according to the needs of the individual, where each new action returns value and virtuous behaviour is rewarded even when it is not linked to service renewal. In a sector where word-of-mouth and the brand-user relationship over the period are of strategic importance, can companies in the utilities world ride the wave?