Energy suppliers: Differentiate and go-faster-to-market with your campaigns and promotions

A flexible discount function, in conjunction with personalisation and relevancy, will take the utility-customer relationship to the next level.
Published: Fri 29 Apr 2016

As energy markets unbundle and become increasingly competitive, getting the retail strategy right has never been more important for energy suppliers who need to attract as well as retain their customers.

For existing suppliers, the higher level of competitiveness is leading to an escalation in customer churn, a threat which is forcing many to become even more customer-centric.

New market entrants also face tough challenges. While the increased liberalisation of the energy sector offers opportunities for many more specialist energy retailers to enter the market, startups often lack the necessary resources.

Today, all suppliers have to respond rapidly and innovatively to the growing complexity of customer needs. In order to prosper in the future, they have to view threats to their businesses as opportunities and to do this, they require the right technological support. [Engage To Improve The Customer Relationship.]

Discount function - a real market differentiator

We have written in the past about moments that matter most to customers and one of these is the billing moment. Billing can be a critical risk point for utilities and a solution that will enable a satisfactory experience for all concerned will most certainly give them the “edge” they need.

In response to this need, Ferranti Computer Systems has come up with a software package that enables the supplier to tackle the market with a greater confidence. The MECOMS™ customer  management and billing solution, used at energy- and utility companies in 17 countries for two decades now, combines flexibility, efficiency and smart insights which enable the ability to drastically cut cost-to-serve. The system gives overall support to customer management, engagement and billing.

In response to their customers’ request for an extra “edge” in the market, Ferranti Computer Systems has come up with innovations in their Discount Management functionality.

The improved Discount Management Functionality, integrated into contract management and billing, will be launched as part of the new MECOMS R4 on 1 July.  Maarten Claus, solution designer at Ferranti Computer Systems told us that the new functionality will be a “real market differentiator” as it enhances the suppliers ability to offer customers the best deals and price proposals in a highly flexible and efficient manner.

“Suppliers can adapt the function according to their needs. For instance, suppliers can offer a discount on the last invoice of the year – a time when many customers review their rates and tend to switch in search of better deals. The flexible discount framework also allows suppliers to offer set discount deals over a long period of time, such as two to three years, in order to retain them.  With the promise of a long term discount period, the promotion will attract new customers while many may feel reluctant to switch because they won’t want to lose out on their discount,” he explains.

Short term promotions will also have a similar effect but these are more likely used to attract new customers.   

Claus points out that many new entrants in the market use the MECOMS solution because it enables agility in terms of price and discounts.  “Most of these startups are winning customers from utilities that do not have a flexible approach. Today, suppliers need solutions that will enhance competitiveness and help differentiate the business.”

It’s more than just price

While price does play a large part in a customer’s decision to switch, suppliers should keep in mind that customers are also sensitive to personal service and relevancy. It is imperative that suppliers develop a relationship of trust with their customers and this can be done by striking a healthy balance between excellent customer service and competitive pricing.

Energy suppliers should ensure that discounts or promotions are relevant to specific customer segments otherwise the strategy may not work. According to Claus, the enhanced discount management functionality will help suppliers activate modules according to these as well as their overall business strategy.

“The function can leverage various components based on the needs of the supplier and its customers. It is possible to link discounts or promotions to a group of customers. For instance, discounts can be given to those customers who have exceeded a certain level of consumption. Discounts can also be linked to campaigns that promote energy savings.”

Utilities can no longer rely on the role of ultimate commodity provider as they have to now become a trusted energy partner, a full-service provider, to their customers. By being offered relevant promotions and discounts at the most appropriate times, customers are likely to develop a stronger relationship with their energy supplier.

Claus says that Ferranti’s MECOMS customer management and billing solution is helping its customers to differentiate themselves from their competitors. “The solution helps them to offer time-limited discounts on multi-commodity product-combinations, as well as enable them to define their own discounts instead of relying on custom change implementations. Promotions are carried out faster this way, resulting in a faster go-to-market process.”

As Leslie De Cuyper, product manager MECOMS, and Johan Vandekerckhove, director MECOMS International Solutions Advisory Group, both from Ferranti Computer Systems point out in a studio interview with Engerati at the recent European Utility Week, customer engagement should be at the heart of the utility business and their experiences should not be tarnished with frustration. “There should be one voice, and information communicated to the customer should not be conflicting. There should be a holistic view and understanding of all the services on offer to the customer.” They added that old legacy applications should be changed to accommodate the customer’s need for personalized communications.

The energy industry needs flexibility and agility in order to respond successfully to the transformation which is taking place in the sector. By keeping campaigns and promotions “fresh” and relevant, energy suppliers can expect to reap great benefits from their adoption of quality software solutions.

In conclusion, Claus gives energy suppliers the following advice: “Focus on delivering superior customer value in line with one of three value disciplines — operational excellence, customer intimacy, or product leadership. Become a champion in one of these disciplines while meeting industry standards in the other two, and you will take a leadership position in your industry. Discover the different paths towards business leadership and how these options can enable utility success, by attending the webinar, Achieving business leadership in utilities.