Traditionally, customer loyalty has never been high on the agenda for the industry, with price often taking precedence. Competing on price alone, however, can be a risky premise. Not only does it restrict margins, but it also incentivises consumers to keep switching providers again and again while brands end up losing sight of the value of a loyal customer.
It is important to understand that customer loyalty in the utilities industry differs from other sectors, with energy and water purchases considered by the majority of consumers as a basic and essential commodity, often purchased annually, with few opportunities for one-to-one communication.
In fact, a recent Accenture report revealed that consumers give utility companies just ten minutes of their time per year on average. This comes in sharp contrast to sectors such as retail, where providers have opportunities to use multiple customer touchpoints relating to purchases, new offers and product launches, to push their brand to the forefront of their minds and obtain mass customer engagement data, often within a single day.
With it now costing on average five times more to attract a new customer than it does to retain an existing one, it is in utility brands’ best interests to come up with new and innovative methods to feature more prominently in the daily lives of their customers, to both raise brand awareness and inform future engagement strategies through capturing customer data.
Perhaps the most effective way of achieving this is by integrating everyday relevant, value-added extras and rewards into customer engagement strategies, such as dining memberships, cinema tickets and experiences – reminding customers of your brand while saving money doing the things they love.
Through these rewards, behavioural data can be gathered by providers, identifying trends and habits to refine services and communications further, ensuring customers are targeted with relevant content, in the right place, at the right time, developing trust and building brand loyalty.
Brands can not only capture engagement data but also combat concerns surrounding the infrequent nature of utility communications by slotting seamlessly into the wider, day-to-day lives of their customers, reinforcing positive brand association through enjoyable experiences.
Despite the necessity of utilities, liberalisation of the industry has created an increasingly saturated and competitive market, meaning customers will not stick around unless they receive true value for their loyalty.
In light of climate change and deregulation, the utility sector has proven to be highly adaptable time and time again, and it is vital the industry is just as reactive to ever-evolving consumer habits and demands.
Using rewards as mutually beneficial customer brand touchpoints not only positions and positively reinforces your brand in the daily lives of your customers and those around them, but also unlocks access to previously unattainable data to understand exactly how your customers behave. And ultimately this is by far the most effective way of retaining them.