Movers and Shakers
Too often suppliers are the last to know if a good customer is planning to move home and take their business elsewhere, and by the time they are aware of their customer's intentions, it is often too late to retain them.
The two major sources of attrition for utility companies are aggregators/comparison sites and homemovers. While aggregators really understand the value of their data and push brands hard for deals on the comparison sites and downstream data/leads, the issue of homemovers is a very different proposition, as historically there has been no clear view as to when this is likely to happen.
The 'Big 6' energy utilities have highlighted to Callcredit that this is a significant issue and explained how they are only able to retain on average 15-20% of all customers, with this generally happening when the customer contacts their supplier to inform them that they are leaving the property and not because the supplier has contacted the customer. This leaves a huge 80-85% of customers being lost through churn which costs the industry an estimated £126m a year and therefore clearly affects the bottom line of energy companies.
With such high levels of customer turnover, significant time and financial investment is required to recruit new customers just to maintain the status quo, at the expense of focusing on nurturing existing customers to keep them longer, grow their value and gain referrals to friends and family.
The challenge of course is identifying exactly when the customer is looking to move home and any insight to identify these triggers is becoming vitally important for energy suppliers in order for them to create an effective customer retention/acquisition strategy.
External data can help here. Many businesses who offer moving services collect data on consumers, fully consented for third party marketing, as they flow through the moving process.
For example, internet property portals capture consumers whose houses are advertised for sale on their website and postal companies with mail re-direction services capture customers just before they move and for periods specified afterwards.
A number of companies have now established specific Homemove Databases where utility providers can match this data to their own customer database to identify which customers are in the process of moving home and whereabouts in the process they are.
By utilising new technologies and the vast amount of data captured in today's society suppliers can create a complete 360 view of their existing customers which makes the analysis of their specific needs much easier. By using data in this way throughout the whole customer lifecycle suppliers can identify and respond to different customers' needs, creating a tailored strategy for each customer type.
For marketers, moving home represents a great and actionable communication trigger; the perfect chance to suggest relevant support in a considered and timely manner, offering their customers alleviation from some of the worries and decisions that they inevitably have to make.
Armed with the knowledge that customers are most likely to switch supplier when they move home, energy suppliers can use this as a key trigger in marketing campaigns to hold on to their customers. For example, once aware of a customer's moving plans, the supplier can make it easy to take them to their new property, offer incentives to stay with them when the customer moves, advise on the most cost effective tariff and recommend energy efficiency solutions such as insulation for the new property that they are about to move in to.
Marketers out there who use their initiative should be exploiting these opportunities by adding a home move element in to their existing marketing strategies, from retention and acquisition through to cross-sell and up sell, the timing of which needs to be executed carefully to ensure maximum success and return on marketing investment. By creating a comprehensive strategy for all new and existing customers, providers can benefit from reduced churn, improved retention rates and increased customer satisfaction and loyalty
It's therefore important to not overlook home movers as a key marketing opportunity. Organisations should look to embed these major life event triggers into marketing strategies in order to reap the rewards.
Remember, the price for acting may be significant; the penalty for inaction will be significantly higher!
Strategic Account Director
Callcredit Information Group