The Outlook For The Residential Utility Business: Snare, Care And Share
Scripp Business Insights, October 2003, Pages: 191
Utilities are facing a testing time, the traditional monoliths of the industrialised world are now having to face up to the pressures and opportunities provided by de-regulated markets. Whilst some markets such as the UK have been de-regulated for some time other markets are still relatively new. Companies who are currently within or who are looking to move into these new markets would do well to learn from the successes and failures of organisations from within the established markets. Not only can utility organisations learn from other utilities, they can learn from the advanced techniques used by other B2C companies operating in other industries. The report The Outlook for the Residential Utility: Snare, care and share provides a detailed outlook of the European utility market, uniquely this report concentrates on the issues of customer targeting, branding strategies, loyalty schemes and affinity marketing techniques.
This new report provides you with:
- High impact sales and marketing strategies - the report provides consumer profiles and techniques for effectively targeting specific segments
- Research into customer awareness and perceptions of Utility companies - develop a brand personality which meets the emotive needs of your customers
- An assessment of customer needs - how can you profitably provide your customers with a high level of service - are there savings to be made?
- A blueprint for loyalty building techniques - using case studies, the report assesses how you can effectively introduce loyalty schemes
- An examination of affinity marketing techniques - understand the strategies needed to differentiate your organisation from your competitors
Based upon unique market research and analysis this report will enable you to:
- Reduce customer churn by developing profitable customer relationships: lowering costs-to-serve and drive changes in customer behaviour
- Build customer loyalty, learn from the techniques used by organisations in other industries and implement loyalty schemes which provide tangible returns
- Dramatically increase brand awareness and improve brand perception by using the reports’ exclusive customer profiles to develop a brand personality which encapsulates your customers’ emotive and basic needs
- Increase the return on your marketing campaigns by understanding your customers intimately and segmenting your customer base effectively
Chapter 1 Sales and marketing strategies
Process-based
Characteristic-based
Customer acquisition
Customer development
- 1. Entrenched customers 1
- 2. Up-sell 1
- 3. Cross-sell
Acquisition profile
Optimum acquisition segments
- Forming families
- Prosperous pensioners
Customer development profile
Optimum development segments
- Moneyed metropolitans
Optimum development examples
- Earning executives
Chapter 2 Building the utility brand
What do customers want from their utility?
Scarcities of time and attention
Customer awareness just one step in the right direction
- Raising customer awareness
- Brand communication and the customer
Customer requirements low emotional attachment
- The foundations of brand rational expectations
- Social identity - perceived value
- Emotive needs and the brand personality
Pseudo and actual brand loyalty
Customer development
Brand bottlenecks and pro-activity
Chapter 3 Developing the affinity relationship
Gaining critical mass
- Key aims and objectives
- Optimum affinity relationship for: multi-service retailer looking to gain critical mass
- TXU Energi
- Tesco Clubcard
- Impact upon acquisition rates
Developing brand identity
- Key aims and objectives
- Optimum Affinity relationships for: leveraging brand
- npower
Developing the multi service portfolio
- Key strategic aims and objectives
- Optimum affinity relationship for: developing the multi-service
- portfolio
- HemEL
- Consumer perception
Utility service provider
Creating the emotional link between utility and customer
- Key aims and objectives
- Optimum affinity relationship for: the reduction of churn
- Scottish & Southern
Developing customer loyalty
- Key aims and objectives
- Optimum affinity relationship for: loyalty card development
- HEW
Chapter 4 Serving customer needs
Frequency of meter reading
- Actual meter reading and customer satisfaction
- Low metering frequency tariffs
One-stop metering
Bill cycle alignment
Touchtone metering
Online metering
Access to properties
- Meter location
- Training needs
- Visiting times
- Outsourcing
Automatic Meter Reading (AMR)
- AMR and tariffs
- Fault and leakage detection
- Theft and system losses
Added-value services
Introduction
Re-billing
Bill layout
- The bill as an information tool
Online billing
- Getting customers online the customer-centric proposition
- Online banking: Barclays Bank case study
- Added-value services
- Address changes on the Internet
Consolidated online billing
- Build versus buy the e-billing debate
Internet payment summary
One-bill
One-Bill case study - Powergen
- Implementation
- The customers response
- Swift payment
Direct debit uptake
Online payment
- Airline case studies
- Incentives
- An online service for an online tariff
- Credit card payment
One-and-your-done customer service
- Customer Support Representatives (CSRs)
- Information silos
- CSR training
- Web training
- CSR staff retention
Automation in the call centre
- Call routing
- Call waiting
- Call back buttons
Self-service & technology
Chapter 5 Building customer loyalty the role of loyalty cards
Price leadership vs. premium service
Database marketing
Customer base segmentation is a key driver of loyalty schemes
Loyalty schemes can add to brand perception and differentiation
Brand the focal point of a loyalty based scheme
ROI - too small a return to invest more
Strategy
Customer contact
Operations
Economic benefit
Lessons for utilities
Probability for adoption
Strategy
Customer detail
Economic benefits
Lessons for utilities
Probability for adoption
Appendix
List of Figures
Figure 2.1: Customer wants are commonly contradictory
Figure 2.2: Demand and supply side factors are retarding brand awareness and consequently brand value
Figure 2.3: Consumer needs can be broken down into three levels that must be mapped onto the utilitys brand image
Figure 2.4: Brand values such as environmental concern may resonate with the customers own values, but also with how the customer wishes to be perceived by others
Figure 2.5: Authentic loyalty leads to long-term profit and potential for word of mouth gains
Figure 2.6: Channels have varying abilities to drive brand loyalty due to content restrictions and interactivity
Figure 3.7: Stages of development in the multi-service retail business model
Figure 3.8: Residential dynamics for customer growth and development
Figure 3.9: Expanding brand recognition into the multi service retail market through affinity development
Figure 3.10: Aggregated affinity take-up against total customer acquisition for npower
Figure 3.11: Perception of utility-offered bundles services by the European residential customer
Figure 3.12: Customer gains and losses per quarter
Figure 3.13: HEW Card customer take-up
Figure 4.14: A comparison of actual uptake and customer preference for direct debit payment
Figure 4.15: Would free Internet access encourage customers to deal with the supplier over the Internet?
Figure 4.16: The cross-departmental nature of customer queries requires all business units to
contribute to the development of a unified and cost effective customer service solution
Figure 5.17: Operational schematic of a loyalty scheme
Figure 5.18: The basic tools of value segmentation form the starting point for a customer loyalty strategy
List of Tables
Table 2.1: Brand awareness is highest in the regulated markets, and requires heavy expenditure to maintain under competition 41
Table 2.2: Low awareness of gas and electricity suppliers in the UK market 42
Table 3.3: Estimated proportion of Clubcard related gains against the total acquisition effort 76
Table 4.4: Cost of metering, 2001 99
Table 4.5: As customers and regulators demand more frequent meter readings, AMR comes into its element 112
Table 4.6: Billing costs across Europe, 2001 117
Table 4.7: The additional cost of re-billing customers for a typical utility 118
Table 4.8: Bill related queries to the call center 119
Table 4.9: What factors would encourage you to deal with your supplier over the Internet? 125
Table 4.10: Percentage of customers who call the utility call center to register a change in address 127
Table 4.11: Online utilities can offer cheaper tariffs to gain customers 145
Table 4.12: Cost of minimal online access packages with AOL 148
Table 4.13: Towards ‘one and done’ in major European markets 153
Table 4.14: % of customer queries solved in a single contact across Europe 156
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