14th Feb 2020



It’s common for the first couple of months of a new year to bring about resolutions, new opportunities and a fresh outlook for many. But, worryingly for companies in the utilities sector, it’s also a time when customers are much more likely to consider switching. Whether it’s because of a big blow out over Christmas or there’s a new deal popping up, consumers see this time of the year as a good time to reassess their options.

In this blog, our MD, Michael Kalli, gives an overview of our latest research outlining the reasons why people swap and how utilities companies can avoid the dreaded switch this year. Here goes…


New year, new utilit-me

In aims to get ever closer to our customers, last year, ELLO Media spoke to 1000 of them to ask about their switching habits. Over one in five stated they’d switched utilities provider in the last 12 months, for various reasons we’ll discuss later.

But, we’ve not just looked at our data to form conclusions, wider research showed in January 2019 alone, a record-breaking 400,000 customers switched their utility provider, up five per cent on the previous January. We know money is tight at this time of the year, so, it’s understandable consumers start to look at where they can make savings. But, how can utility providers secure customer loyalty not only in the first few months of the year, but throughout the year as well?

Before I jump the gun and give some of my thoughts on how you can do this, I’ll provide you with an explanation for why customers end up switching. To make sense of these habits, instead of spending time guessing what people wanted, I asked them instead. Inevitably, a poor customer experience was a key reason for switching. A customer isn’t going to stay with a brand that makes them feel undervalued, nor should they have to.

Also, if the customer doesn’t feel engaged with you they’ll soon switch to someone who’ll provide more value for money – whether it’s with cheaper prices or better rewards. But many feel current loyalty schemes from utility providers are disingenuous, or don’t focus on their needs and preferences. A shame, considering 54 per cent of UK consumers said they felt more loyal to a company that understood their preferences and priorities. So it’s simple, you’ve got to be genuine and honest – if you don’t give customers real value, they’ll see right through you.


Curb the utilities switch

Now I’ve told you key drivers for switching, we can begin to think about solutions to keep customers coming back to you.

It’s essential for you to provide an overall better customer experience to keep customers loyal to your utility company. If you’re relying on competing on price alone, it’s not going to work, no matter how low you go. It simply results in a race to the bottom with no focus on the service the customer receives, which is not the foundation for a good business model. Yes, your price might be the best on the market, but it’s still not going to stop a customer paying slightly more to receive a significantly better experience when using your service.

When picking a provider you’re going to be rated on whether you’re hitting all the bases when it comes to customer service – online and on the phone, are you being accurate and clear on your bills?, are you excellent at handling complaints?, do you provide any added value for money?, or are you giving customers the added bonus of helping them understand how to reduce their energy bill? – showing your business isn’t just in it for the profit. If not, forget about winning their custom.

A utility brand I think is doing particularly well is Octopus Energy. The company received the highest customer rating, of 80 per cent, and a five-star rating across the board when it comes providing an excellent customer service. Also, just like in the finance industry, we’re seeing challenger organisations, like Bulb, rise through the ranks and pip traditional providers to the post by simply providing a clearer, friendlier, and cost-effective customer service.


Tailor your loyalty and engagement strategies

Something else I want to flag is that 30 per cent of us engage with brands which are an extension of our personality. Therefore, rewarding consumers with services which are bespoke to them shows you understand their preferences and keeps them coming back. So, utilise data as much as possible to understand your customers’ preferences and tailor loyalty and engagement strategies accordingly. I found 56 per cent prefer cashback as a reward, 35 per cent prefer to be given discount cards, and 27 per cent said they prefer regular smaller rewards. Although these were the overall preferences, I know not every business has the ability to offer these solutions. So, you need to identify what a customer wants and what you can reasonably integrate into your offering. Then, you can build a programme which is fit for purpose and meaningful to the end-user.


Key ways to keep your customers loyal

So, those are my thoughts but how do you implement them? Well, here are my five simple steps to developing a loyalty scheme which keeps your customers coming back.


  • Variety is the spice of life: Reward a variety of interactions in several ways – did your customer switch to online statements? Have they reduced their bill quarter on quarter? These don’t need to be large gestures and huge discounts but showing you actually care about their loyalty will keep them surprised.

  • Offer value: Loyalty schemes require a level of effort from the consumer – ensure you make it worth their time. There’s nothing more annoying than spending loads of time signing up for something and then soon realising it’s a waste of time. I don’t have the time for that so I doubt anyone else does! If they’ve taken the time to join your loyalty programme, the least you can do is give them something they actually want by taking into consideration their preferences.

  • Make joining easy: Make it is easy to join a scheme across all platforms and touch points. Do they have to go online to register to then call your call centre to be verified to then be sent an email with a link to click to register? That’s a lot of reading, let alone actions, so chances are they won’t be signing up anytime soon.

  • Be compelling: Say hello to partnerships! Join forces with other companies to offer rewards your customers will keep coming back for. When building a loyalty scheme, it’s best to join forces with another organisation that your customer values, whether it’s dining out or regular cinema trips, if they get a free meal for buying gas then it’s a sure-fire way to keep them coming back.

  • Give the customer a greater meaning: Customers engage more if they feel aligned to your business values. As I mentioned before, if a consumer thinks your brand is an extension of their personality, they’re more likely to stay. So, keep up to date with what they want and address any issues head on.


So, there you go, just a few of my top tips on how you can keep your customer loyal at the start of the year and beyond. I’ve only scratched the surface here when it comes to customers loyalty. To get the full scoop you’ll have to download the ELLO Media loyalty report.


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