How Utility Companies Can Build Lasting Customer Loyalty in a Competitive Market

Utility companies - whether in energy, gas, or electricity - operate in a market where it can be difficult to stand out. 

With rising customer expectations, growing competition, and a drive for sustainability, the industry must rethink its approach to customer loyalty.
 

In this article, we’ll dive into practical strategies utility providers can use to build lasting relationships, complete with real-world examples.

The Challenges: Why Customer Loyalty in Utilities Is So Elusive

1. Not Enough Opportunities for Engagement: Most interactions happen during billing or service issues, leaving few chances to create positive impressions. This lack of touchpoints makes it harder for providers to create loyalty.
    
2. Trust Deficit: Only 12% of consumers trust their energy providers. Such uncertainty means that utility companies have a lot of work to do to create a real connection with their end customers.
    
3. Price Wars: With 41% of customers citing cost as their primary decision factor, utility providers face intense price competition. 
    
4. Lack of Personalisation: Many companies struggle to offer tailored solutions, leaving customers feeling undervalued. When a customer feels like just another account number, they won’t feel any loyalty to a business.
    
5. Limited Innovation: Outdated systems and rigid regulations hinder providers from delivering modern, customer-friendly solutions. 

Providing essential services isn’t enough. Utility companies must go beyond the basics to build trust and deliver experiences that truly resonate with customers.

Strategies for Energy Companies to Build Customer Loyalty

Building customer loyalty in the energy sector requires more than providing competitive pricing. It’s about giving customers extra reasons to choose you, even if there are cheaper alternatives. It’s about offering real value. Here’s how: 
 

• Launch Loyalty Programs That Go Beyond Discounts

Successful programs reward customers for different behaviours and activities, not just transactions. With event-based loyalty technology, you can reward any type of action you want to see more of - for example, reward customers for reducing their energy usage during high-demand times. You could offer bonus points, redeemable for lower energy bills or gift cards. Let's explore some more ideas and examples…

Reward Ideas for Utility Loyalty Programs

Reward customers for Installing Smart Meters or Sending Regular Readings

Smart meters provide real-time insights that benefit both customers and providers.

• Reward Idea: Offer a welcome bonus for customers who install smart meters, or ongoing rewards for consistent monthly meter readings.

Reward customers for Switching to Renewable Energy Plans

Motivate customers to choose greener energy options.

• Reward Idea: Introduce exclusive "green badges" for switching to renewable plans, unlocking rewards like eco-friendly product discounts or charity donations.

Reward customers for Setting Up Auto-Payments and Direct Debits

Simplifying billing for customers also improves payment consistency for your company.

• Reward Idea: Provide one-time bill credits or loyalty points for customers who opt into auto-pay or direct debit systems.

Reward customers for Recommending Your Company on Social Media

Encourage word-of-mouth advocacy to grow your customer base.

• Reward Idea: Offer points for interacting with you on social media or posting about your company, in return for being entered into prize draws. Social media engagement tools like Gravitate make this as easy as possible. 

Reward your customer for Referring Friends and Family

Referral programs are a proven way to acquire loyal customers.

• Reward Idea: Reward both referrer and referee with extra points or discounts on their next bill.

Reward customers for Switching from Paper Billing to Digital Bills

Encourage sustainable practices by reducing paper waste.

• Reward Idea: Offer small, immediate bonuses for going paperless, like digital eco-badges for every customer who stays digital.

Reward customers for Creating User-Generated Content

Customers who share their experiences and energy-saving tips become authentic advocates.

• Reward Idea: Run a contest where customers submit creative energy-saving stories or videos for a chance to win significant rewards, like free energy for a month.

• Remember to personalize the customer's experience

Utility companies can use loyalty technology to automate personalization. Platforms collect data from various touchpoints, including smart meters, billing systems, and customer engagement online. This data can then be analyzed to: 
 

• Identify patterns (e.g., who saves energy regularly).
• Trigger customized rewards (e.g., extra points for reducing energy consumption during high-demand times).
• Send targeted offers (e.g., discounts on renewable energy plans for environmentally conscious customers).
   

This data-driven approach ensures every interaction feels relevant and also creates:
 

1. Higher Engagement
   Personalized rewards grab attention because they align with customer values and habits. Engaged customers are more likely to stick around.
2. Increased Customer Retention
   Customers who feel seen and valued are less likely to switch providers. A loyalty program that “gets them” makes your brand irreplaceable.
3. Enhanced Customer Satisfaction
   Tailored experiences create a sense of care and partnership. Customers perceive your company as more than a service provider - you're their partner in utility services.
4. Boosted Program ROI
   Personalization ensures rewards go to the customers most likely to respond positively, maximizing program effectiveness.

Examples of the Best Utility Company Loyalty Programs

Many utility companies have adopted loyalty solutions to increase customer engagement and retention. Here are some popular examples across the globe:
 

Powershop: "Switch Your Mates"

• Overview: Powershop, an Australian energy retailer, offers a referral program where customers can earn tangible rewards by inviting friends and family.
   
• Incentives: Customers receive $100 worth of free power for each successful referral, and the referred friends also get $150 in free power. This program offsets a portion of the average annual power bill, making it financially appealing.
   
• Ease of Use: The referral process is straightforward; customers simply share a link, and bonuses are automatically credited upon sign-up.
   

Octopus Energy: Octoplus

• Overview: Octopus Energy's Octoplus program allows customers to earn "Octopoints" by participating in demand flexibility schemes, such as reducing energy usage during peak times.
   
• Incentives: Customers can redeem Octopoints for account credits, exclusive merchandise, or donations to charity. Additional perks include spins on a "Wheel of Fortune" for discounts, referral bonuses, and free weekly coffee from Greggs.
   
• Eligibility: Customers must have an operational smart meter and pay via Direct Debit.
   

SO Energy: So Rewarding

• Overview: SO Energy's So Rewarding program incentivizes customers to shift their energy usage to off-peak times.
   
• Incentives: Participants are notified of "So Rewarding Moments" where collective energy savings unlock prizes based on the total volume saved.
   
• Eligibility: Open to all SO Energy customers who engage in the program.
   

OVO Energy: OVO Beyond

• Overview: OVO Energy's loyalty program rewards customers for sustainable energy usage through its Power Move scheme.
   
• Incentives: Members receive £10 off their monthly bills, discounts on heating services, and a free boiler service in the first year. They can also access exclusive events at OVO arenas. 
   
• Eligibility: Available to customers with a smart meter who pay by Direct Debit.
   

E.ON Next: Next Plus

• Overview: E.ON Next's Next Plus program offers tiered rewards based on customer loyalty and engagement.
   
• Incentives: Customers can earn money off their bills depending on their tier (Explore, Discover, Pioneer) and gain access to shopping rewards through a browser extension that provides discounts while shopping online.
   
• Eligibility: Requires an online account, a fixed tariff, a smart meter, and payment by Direct Debit.
   

Enel 

• Overview: Enel, Italy’s largest electric utility company, serves 30 million customers. ENELPREMIA WOW! was a free loyalty program for Enel Energia customers, launched in 2019.
   
• Incentives: It quickly gained millions of members, offering rewards like bill bonuses, discounts, and exciting prizes. The program is being redesigned, and a new initiative, "Enel Vibes," is coming soon, bringing exclusive prizes and surprises for Enel customers. We can’t wait to see what they come up with!