If you’ve come anywhere close to CRM then the chances are you will have heard of the Leaky Bucket. It’s an analogy frequently rattled off by marketing professionals to describe a business that focuses all its efforts on finding new customers despite having customer retention issues. It works on the premise that if all your existing client base are leaking out the bottom of your bucket, then you are wasting your time acquiring new ones.
Traditionally utility providers appeared to spend a lot of their marketing budget on attracting new customers with shiny incentives, new customer-only offers and juicy carrots dangling on sticks. But no sooner had they reeled you in, you were flung into the net with the rest of ‘em and swiftly forgotten about.
However, energy providers are finally realising that they can no longer rely on tariffs and price cuts to woo new customers if their existing customers are going to leave. Which is why we are seeing more investment in customer retention strategies.
Stepping aside from concerns of pure profitability, customer retention is one of the best ways to measure how reliably your company is providing its service. It demonstrates your ability to successfully satisfy their needs in a way that means that they wouldn’t consider looking elsewhere.
Because of this, last year British Gas announced that it would be pinning it’s push for more personalised campaigns on a strategy based on retention. With so much choice in the market, people need more of a reason to stay with their current supplier, hence why the country’s leading utilities provider is redoubling its efforts to become a service provider in a connected home.
Of course, smart meters that monitor your energy usage are nothing new, but the utility firm sees a future beyond gas and electricity. Their smart devices allow you to control your lights, turn on your speakers, water your plants, and even lock your cat flap remotely. What they’ve established is that to deepen engagement and loyalty with their customers they need go beyond supplying energy. They need to help people run their homes.
The rationale behind this is that people are far more likely to feel brand warmth to a company that lets them feel in control and secure by letting them monitor energy usage or remotely check that they’ve locked their windows, than a utilities firm that only has cheap prices going for it.
Of course, price will always have a part to play when customers choose their products or services. But it’s important to remember you can’t price-tier energy- there’s no better or worse quality gas, no such thing as premium water or high-end electricity, the only thing you can differentiate is your service proposition to help customers understand what they are paying for and the value of staying with you as a provider.
But until you’ve cracked that and learnt to take care of your customers first, you’re going to be stuck with a holey bucket…and wet shoes.
-Anna Melton, Marketing Manager