Digital customer-centricity – a requirement for utility companies

Digital customer-centricity – a requirement for utility companies

5 min read

Digital Customer-Centricity - A challenge for energy suppliers

I would like to start with a short personal story about customer experience. A few years ago, there was a fuel company on the German market that trained its employees to say goodbye to every customer personally when they paid with a credit card at the checkout. The employees simply looked at the name on the card and would then be able to say, “Have a nice evening, Mr. Werner”.

When it comes to energy, only the price counts – so why focus on customer loyalty?  

Even before the current situation on the energy market, it was a challenge to retain customers and keep the churn rate as low as possible. In general, a churn rate of 5% should not be exceeded, but it is not uncommon for this limit to be exceeded. In some European countries it is even more than 10%, which often means: We can no longer pay any attention to customers who are leaving.

The failure of some providers on the market, who had relied on price as the sole component, can even be used in this context to argue for the advantages of encouraging customer loyalty. The default suppliers could no longer serve the unforeseen influx of new customers with the procured quotas and, above all, with the associated tariff conditions. As a result, the "forced to switch" customers had to digest much higher tariffs - whether with the default supplier or the ultimately chosen energy supply company. “Greed is good” so perhaps it's not worth it after all.

That's why I personally appreciate the fact that my energy supplier of choice always offers me the fairest possible tariff on the market. Of course, that also means price increases at the moment, but in the past I was also able to benefit from price advantages that were passed on to me as a customer.

Even if the majority of customers are still in the role of energy consumers - now that the fragility of the fossil energy supply has been realised and at least commercially noticeable, the customer must also be seen in the role of a prosumer and user of energy services. 


Customer value models 

In order to be able to make the right individual offers to thousands or even millions of private and commercial customers at any one time, a simple customer evaluation is no longer sufficient - here, only machine learning approaches can achieve optimally usable results based on historical and current information to establish:

  • Profitability and returns
  • Interests and inclinations
  • Age
  • Type and frequency of communication
  • Acquisition and support costs
  • Divisions
  • Gaps in tariff history
  • Trends in billing amounts
  • Trends in consumption
  • Tariff term
  • Payment terms and morals
  • etc…


Customer potential 

Only those who truly know the "value" of their customers can also evaluate the potential and then submit appropriate offers.

  • Who are the customers with the highest added value potential in terms of cross- and upselling?
  • What facts are available in order to be able to submit Next Best Actions and Next Best Offers?
  • What information for my employees in direct customer contact can be derived from this?
  • Which segmentations in the sense of targeted marketing campaigns can be formed from this?

With a good understanding of the customer potential, a much more differentiated picture of the customer emerges. With the right combination of more monetary customer values ​​and demographic and behavioural information, the "understanding" of the customer's needs, desires and goals increases.

These potential analyses can then be used for optimal segment formation in the sense of data-driven marketing, but also at the first point of sale in direct contact with customer service. 


Customer interaction 

It is now common practice to offer customers at least one service portal access so that they can ask questions about bills, tariffs, discounts, relocations, or help themselves online with classic service issues.

However, the requirements in terms of the customer value model described above can only be partially met or not at all.

It takes more to get a differentiated image of the customer. Digital platforms determine the everyday life of customers and due to the pandemic situation, their importance has increased even further. Customers also look at their energy supplier with this expectation and are very conscious and aware of any "service gaps".

An optimal customer interaction has the aspect of maintaining spontaneous customer satisfaction as well as ensuring an optimal service experience by obtaining information from user behaviour.

According to a survey by energy supply companies, around 70% of companies rated the importance of customer-centricity as “high”. 



Changing your perspective is worth it. Focusing on the customer, and endeavouring to know the customer better than the competition will inevitably lead to a higher degree of customer satisfaction, to tie customers more closely to one's own company and to inspire and win over non-customers with improved offers.

A large proportion of energy suppliers assume that non-energy services will account for around 20% of their business in the coming years.

As an experienced service provider in the energy industry, BE-terna offers exactly the right range of tools to achieve a higher level of customer engagement. Feel free to talk to us about it and visit us at E-World 2022 in Essen.


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About the Author

Michael Werner

Sales Account Manager