E.ON Customer Engagement: The Business Case

By changing its customer strategy and taking advantage of digital technologies, E.ON UK redesigned its entire customer experience.
Published: Mon 14 Dec 2015

With energy markets becoming increasingly competitive, energy retailers find themselves dedicating more time and money on improving customer trust and satisfaction levels. This is especially important as they venture into unknown territory in search for new revenue streams.

Pleasing the new energy customer

However, gaining customers’ trust today involves a lot more than reducing tariffs or sending out the odd promotional pamphlet. The energy customer has changed over the last decade. Their demands have become a lot more complex and if these needs are not met, they can respond by switching suppliers. In the UK, this process is being made quicker and easier for the customer.

And it’s not only about offering the most competitive tariffs - it’s also about higher service expectations. Customers are experiencing a higher level of engagement in other industries such as banking and retail. With the help of digitalisation, these industries are reaching their customers more regularly with relevant and helpful information. Personalisation is what’s catching the customer’s attention and reducing churn levels. In addition to this, customers are wanting more control over their energy experience. They want to generate their own clean energy, take part in the energy market and improve their energy efficiency to reduce bills and environmental footprint.  

The new customer can no longer be perceived as a customer only - they should now be viewed as partners to energy retailers.

Digital tools redesigning the customer experience

One such energy retailer, E.ON UK, one of the UK's leading power and gas companies, took the step towards radically changing its strategy and market approach in 2012 to improve trust and satisfaction, reduce churn and ultimately improve the company’s performance as a whole.

The company went about changing its relationship with customers and did this by digitally transforming the customer experience.

By harnessing Big Data analytics and behavioural science, Opower’s platform has enabled E.ON UK to provide personalised advice and products to help customers control energy use and reduce their energy bill.

The online tool, The Saving Energy Toolkit, is built on Opower's platform and software-as-a-service solutions. The core features of the Toolkit include energy consumption tracking, social benchmarking, a ‘What Uses Most’ energy audit, energy saving tips and energy saving plans/goals.  

The Toolkit enables customers to monitor their energy usage and costs and compare their usage to that of nearby households in similar homes. Each household's energy use is compared anonymously to around 100 homes of similar size so they can compare their consumption to average peer households. The comparison feature encourages positive behaviour changes and nudges users to adopt recommended tailored energy-saving tips.

The Toolkit helps customers understand how they use energy and when they use it the most. It provides easy to read charts that detail how energy use changes on a month-by-month basis and how energy is currently used in the home, divided between heating, lighting, hot water, appliances and other uses. Since it was launched in October 2013, more than one million E.ON UK residential customers have visited the Saving Energy Toolkit.

Customers prefer digital

The overall benefits derived from the Toolkit have surpassed those originally anticipated. One of the key performance indicators for customer satisfaction and loyalty monitored by E.ON UK is the net promoter score (NPS). It measures customers' willingness to recommend the company to their friends.

E.ON UK's NPS has improved and it now leads among the major energy suppliers. Also, brand metrics and churn demonstrate consistent improvement by E.ON UK. On the customer side, E.ON UK collected signs of consumption reduction from engaged customers who use the Toolkit, with average savings of around 1.4%.

High NPS scores are associated with higher customer loyalty, acquisition and cross-sell and lower cost to serve, according to Bain’s leading research in Net Promoter Score. Bain’s research finds that  digital activity is closely tied to customer advocacy and revenue due to the fact that customers today prefer to interact with their service providers digitally, thereby building brand loyalty.

Making digital transformation a strategic priority

The entire digital transformation programme was very successful and the numbers certainly reflect this: In 2014, E.ON’s website had 30 million unique visitors (double that of the previous year), over 10 million visits were via mobile devices, iFAQ help pages received over 1 million visits, double the number of customers were managing their accounts online, and there was a significant increase in online product switches. Over 30,000 customers received help via social media. Over 1 million customers signed up for E.ON Rewards which helps customers understand and control their own energy use. This is core in E.ON UK's strategy and will continue to be important as the rollout of smart meters progresses.

Reduce churn by building digital trust

The idea of giving the customer more control over their energy has been adopted by other utilities. One such utility is New Zealand’s Mercury Energy which has reduced customer churn and gained more customers thanks to the Good Energy Monitor programme (GEM) which was powered by Opower. [Reducing Churn by Engaging More with the Customer.]

The business case for building a relationship with your customer using digital technology is strong but building digital trust is equally as important. To gain this trust, Nadeem Sheikh, senior vice president for Opower's International business, points out that utilities should provide the right information at the right time and through the right channel, in a personalized way.

“If utilities can move quickly to gain digital trust, they are well-placed to be the primary provider of home energy management tools and services to their customers. But, utilities must be able to demonstrate the clear benefits of ongoing engagement to their customers. Customer value should be at the very centre of every customer communication and touchpoint.”

Further reading

IDC-E.ON UK Rebuilds Trust with Customer Engagement and Digital Transformation [PDF]

Opower-The Value of the Engaged Energy Consumer [pdf]

Accenture: The New Energy Consumer: Unleashing Business Value in a Digital World