At the beginning of the 20th century, during the birth of the car industry, Henry Ford said “Any customer can have a car painted any colour that they want… so long as it is black.”
Clearly product differentiation wasn’t high on Henry’s list. And why would it be? Nobody else was selling a $260 car. Scroll forward 100 years; customers’ appetites have expanded to not just expect a variety of products but also how they are packaged. In countries where Smart technology has matured (such as New Zealand) it is possible to see how suppliers can innovate their products and differentiate themselves in the marketplace.
Which got me thinking; how can GB energy suppliers “change the colour” of their products to better serve their customers in a smart world? Three areas come to mind:
New channels of communication
The transition from traditional to Smart has led to a shift from traditional communication channels (Post/email/SMS) to more accessible and engaging channels (In-home displays IHD/Apps/Social Media).
GB suppliers have begun to embrace these channels with progress especially evident with apps - British Gas and First Utility in particular, who achieve high ratings on App store. But more can be done.
Suppliers based in New Zealand (where the smart meter rollout began in 2006) were quick to move. Powershop’s app allows customers to buy electricity, manage consumption and access invoices whilst providing a unique customer experience through likeable marketing. The result? Customers engage with Powershop more frequently and beyond bill checking.
New pricing models, tailored to customers’ usage
In New Zealand, Flick Elec Co provides customers electricity at wholesale cost; 48 different prices per day, every day, at 30 minute intervals. Since starting up in 2014, they have increased from 589 customers (Jan 15) to 7,883 (Jan 16): a staggering 1,338 per cent rise - which suggests that, at least for a niche segment, customers like to link their costs to the actual costs being incurred by suppliers.
In GB, on 10th March, the Competition and Markets Authority (CMA) proposed suppliers exceed the four tariffs limit, allowing for new tariffs which fit customers’ favoured payment method and usage patterns. This change, combined with the emergence of smart home technologies will increase customers’ demand for cheaper energy during low demand periods (late evenings/early morning), something suppliers will need to match.
Use customer data to help save them money
The CMA also outlined plans to strengthen the ability of price comparison sites to help customer find better deals. If suppliers don’t use consumers’ data to help lower costs, third party applications will. To retain customers and keep them loyal, suppliers need to be transparent and proactive about saving money for their customers. After all, in a world post smart meter rollout, customers are only a few clicks away from switching.
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