The current energy crisis has created a challenging terrain for both energy suppliers and customers to navigate. With rising prices pinching the pockets of customers who are already struggling, many customers are looking for new suppliers and better rates to save as much money as possible.
May 15, 2023
The current energy crisis has created a challenging terrain for both energy suppliers and customers to navigate. With rising prices pinching the pockets of customers who are already struggling, many customers are looking for new suppliers and better rates to save as much money as possible. Thus, it becomes imperative that energy suppliers consider their benefits and incentives to be best placed to attract new customers and retain their current customers.
To implement effective incentives and rewards, it is important first to understand the context of the current energy crisis.
One of the main reasons for the large price hike is due to the UK's heavy reliance on gas, which makes us particularly vulnerable to fluctuations in market prices. One of the contributors to rising gas prices is the war between Russia and Ukraine, a political and humanitarian crisis.
As Russia is such a large supplier of gas, the world's second-largest in fact, the war has caused a shortage in gas with many countries banning imports of Russian oil, coal and gas, the UK included. This has been a political move to ensure Russia does not feel vindicated in its part in the war and to ensure that UK households are not funding a war overseas simply by turning on their heating.
This restriction of gas, oil and coal imports naturally causes all other suppliers to raise their prices as the demand is the same, but supply has dropped dramatically. And the common people of each nation have been left to bear the brunt of this crisis.
So, considering that prices, for the foreseeable future at least, can’t drop back to their old levels, and putting aside the devastating emotional effect this crisis has had, what can energy companies do to help retain customers or prevent them from switching to other suppliers in the search for cheaper tariffs?
Generally, in the past, suppliers would rely on discounts for customers to switch over to them as a provider; these discounts may last six months, and then once the contract was up, customers would move to a new supplier searching for another discount. This allowed customers to move around the market, and most energy suppliers could keep their fair share.
As simple discounts may not be possible at this point, with the price of wholesale gas being so high, then considering reward-based incentives will be a better method of attracting new customers, but more importantly, rewarding current customers for staying. The rewards can be translated into commodities that are not as affected by the energy price rises, and thus energy companies can help lessen the effect of rising energy prices by helping customers offset the costs elsewhere.
This can include:
To truly give back to customers and create a lasting connection to outshine your competitors, energy companies can try offering personalised incentives. Tailored rewards take into account an individual's needs, preferences and consumption habits and create a more engaging and meaningful experience of your company.
Examples of personalised incentives can be as follows:
So, energy suppliers will need to think beyond simply one-size-fits-all discounts or promotions and take time to understand their customers and their needs. The prevalence of smart home devices should provide all the data required for tailoring these kinds of personalised incentives. A complimentary incentive would be to use environmental incentives.
Environmental incentives are incentives that have a direct benefit on the environment. By reducing reliance on fossil fuels, ensuring houses are powered by green energy from renewable sources, or simply using profits to plant trees, it tells customers you’re aware of the importance and growing desire to preserve the environment and are doing your bit to offset the damage caused by reliance on fossil fuels.
Examples of environmental incentives are as follows:
Referral incentives are simply incentives based on referring customers to your company. Your current customers have to be happy first, so employing some of the above incentives can help in this regard, but there are other ways that referral incentives can benefit you and your customers all by themselves:
The energy crisis in the UK has touched every household in some way, shape or form, and every customer is looking for a way for things to return to normal. Whilst neither energy companies nor customers have a particularly large say in when this will be, between now and then, the energy companies that offer the best deals, the most incentives and the greatest rewards are going to be the ones who retain and attract the most customers.
At Loyalty Works, we are experts in creating bespoke incentive programmes tailored directly to your business and customers' needs. With our simple walkthrough today, we hope you have found some inspiration you can use to begin planning your next incentive scheme, rewards programme and loyalty bonuses.
To get expert help every step of the way, with years of expertise on hand, reach out to Loyalty Works and see how we can help you attract new customers whilst retaining your old customers too! We know you won't regret it!
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