3 challenges we pose to the utilities industry to drive power in loyalty
1. Lead with purpose
Research shows that crafting an authentic brand story that people can resonate with is a powerful tool in activating loyalty as “63% of consumers prefer to do business with brands that share their personal values and beliefs”.
Nike’s “award-winning Dream Crazy ad campaign, featuring NFL star Colin Kaepernick is arguably no better proof of that”, as a brand they have always leveraged powerful storytelling to transcend being merely a sport goods company (Bynder). Nike has become a “mindset, a way of life” and you will notice that consequently, price is irrelevant and rarely mentioned in their messaging. By “leading with purpose”, they have successfully “driven positive change on some of society’s most pressing issues, while attracting a loyal fanbase” that has and pretty much will, last a lifetime (Bynder). COVID-19 only increased purpose led brand messaging, as under the world’s watchful eye, brands were forced to back up their purposeful words with action.
Retail arguably took lead on this, as we saw the likes of Kurt Geiger inadvertently boost sales, after warming the hearts of customers when its CEO sacrificed his salary and they generously donated shoes to key workers and Brewdog, adopting a public service role by adapting its operations, to meet hand sanitiser demand.
Like retailers, energy brands need to build a strong and consistent brand story that transcends price, to stand out in this increasingly competitive market. Some energy players are already correctly leveraging purpose-filled stories, by moulding the green energy conversation into their identity.
However, price still seems to be the motivating factor embedded within the fibres of these stories and with everyone beginning to talk about being green…soon nobody will stand out. For energy brands, communicating a more distinct and unique “why” of their brand wouldn’t go amiss.
Apart from the green conversation, trust is a potentially underutilised angle for energy brands. Following allegations around overpricing after the last economic downturn, the energy industry was amongst the least trusted in the UK, but during the current pandemic, the industry has been front and centre in the national fight against COVID-19 and in turn, is slowly rebuilding public trust in the industry (OFGEM). Could bringing to life an identity centred around trustworthiness, through strategies like price guarantees for example, be a different way for energy brands to stand out and resonate with consumers?
2. Empathetic personalisation
Brand loyalty is also built through the consistent delivery of a brand promise and experience and there’s no better way to create a better customer experience than to personalise offerings. This strategy relies heavily on having a deep understanding of customers and it all starts with data and there is no better example right now than Gousto.
In response to COVID-19, Gousto completely abandoned conversion for retention strategies, by going as far as completely “stopping all new sign-ups to focus on delivering boxes to existing subscribers, putting prospective customers on a waiting list and sending them the brand’s weekly newsletter to keep them engaged” (Marketing Week). They have also put all hands-on deck to develop an “empathetic” data strategy, shifting from “A/B testing and growth hacking for purely conversion means, towards empathy, insight” to create more meaningful engagement and a better experience for their customers (Marketing Week).
Energy have the advantage over retail when it comes to personalisation, in that, “suppliers have a more complete picture of their customers than retailers do, with years of contractual relationships and behavioural data on energy consumption to draw upon” (McKinsey). However, the key challenge is knowing how to capture the right bits of the data and generate valuable insights from it, that can influence communication strategies to create the best customer experience and consequently drive loyalty (McKinsey).
Utility brands could use existing data to identify and test specific events or “triggers” that can be allocated to specific customers. For example, we know that by tracking homes rather than individuals, energy brands typically lose a lot of quality customers when they decide to move house.
If your data happens to reveal customers browsing through FAQ questions around home moves on your site, could you automate messages promoting home moving service and a new tariff, encouraging that customer to stick around as they move home (McKinsey)? Energy companies should also commit to refining their data systems and structures to get the most out of their data and start delivering retention-based personalisation. For example, in the past, it took Gousto 16 recipe suggestions before they could get an idea of new customers’ tastes, their investment in data science and machine learning means that they now gain faster insights, and can get a picture within only 8 suggestions (Econsultancy).
Incorporating real-time data and automated algorithms could help energy brands accurately predict the behaviour of particular customers, enabling them to then quickly and proactively respond to those insights. For example, identifying customers with a higher chance of cancelling their contracts, means brands could intervene with a personalised offering, before they make the jump (McKinsey).
3. Tailor your treats
When it comes to reward systems, we have seen retailers emphasising experiential benefits, as traditional points-based loyalty schemes are no longer enough to maintain “true customer loyalty” (Retail Week). For example, as the pandemic drove customers to online shopping, Tesco began providing free delivery to its Clubcard Plus loyalty scheme, whilst all other supermarkets were still charging for delivery at the time (Retail Gazette). Tesco went beyond merely gifting points for purchase and built loyalty by tailoring their program to insight, delivering what customers needed most at the time.
Some energy brands are already succeeding in deploying loyalty and advocacy strategies e.g. cuddly toys and refer a friend rewards, but personalisation of the loyalty strategies and customer experience is an underutilised opportunity in the sector. By using data to tailor messaging and incentives to individual customers, energy brands could improve “upselling, cross selling and retention”.
From bespoke energy products at contract renewal, based on previous usage e.g. “bundling the electricity contract with a smart-home device or heating system” (McKinsey), to free holidays/savings advice for those facing financial challenges due to the recession and job uncertainty (USwitch), utility brands can do more to demonstrate the non-financial benefits of staying loyal to a supplier.