Utilita Energy is Britain’s leading supplier of pre-paid gas and electricity. Over the past 8 years, they have grown from 25,000 to over 800,000 customers! So how did they do it?
Meet Louise Walsh, Director of Sales Operations
Louise has seen it all. She joined Utilita in 2011, as one of 6 customer service agents at the time, fresh from a background in retail and rock climbing. She’s been part of Utilita’s meteoric growth to over 1300 employees.
In her current role as Director of Sales Operations, she looks after the operational teams driving both the commercial and domestic sales teams, including training, reporting, and processes.
They are currently growing at a rate of 100,000 customers a year. Acquiring up to 12,000 customers a week at peak times!
Utilita’s Niche – Prepaid Energy
Utilita has a laser-sharp focus on the prepaid customer segment. They recognized that prepaid customers were underserved, and on average were paying a ~20% premium compared to billing customers. So how did they get their foot in the door?
- Smart Meters: They targeted customers who didn’t have smart meters. This was a huge upgrade for prepaid customers who weren’t being offered smart meters by larger suppliers at the time. It also helped with their commercial value proposition.
“The cheapest energy is the energy you don’t use” – Bill Bullen, Utilita CEO
- Digital Experience: This allowed customers to top-up online or on the My Utilita app – so no more trips to the shop. They could now top-up from the comfort of their home.
- Prompt Service: Prepaid customers have much higher call volumes (which results in higher service costs) compared to billing customers. Utilita recognized this unique need and created the infrastructure to support customers.
Having a strong value proposition is only part of the puzzle. Now, with the introduction of Ofgem price cap regulation, financial differences aren’t minor. Energy suppliers need to find new ways to incentivize reticent customers to make the switch.
Acquisition Channels: Diversification is key
Diversification has been key for Utilita over the last few years.
- In 2012, 90% of Utilita’s customers came from face-to-face interactions.
- In 2019, 50% of Utilita’s customers came from face-to-face interactions
- <5% acquisition comes from comparison websites
- Refer-a-friend campaigns have been a successful channel
- Dedicated incentive marketing campaigns to win back customers who have left.
There has been a big move from physical incentives to digital incentives, as these incentives are easy to implement and boost conversions across all channels
Post COVID – Digital incentives are being pushed more because face-to-face interaction has been limited, and may continue to be at least in the short term.
Cut through the noise with Incentive Marketing
The problem with customer service (as a unique value proposition) is that if a customer hasn’t been with you, they won’t know that you can offer them a superior level of service – so at the point of sale (especially for new customers) it is hard to differentiate yourself.
Customers will always be reticent about changing providers – the first challenge is to engage them with an exciting proposition.
Customers are instant results driven – they are willing to take a smaller reward upfront rather than a ‘time with supply benefit’ that would only come to fruition after 4 months or so.
The Do’s and Don’ts of Incentive Marketing
- Don’t assume everyone wants the same thing – Test out different incentives (different brands), and see what connects with your target audience. Double down on incentives that are most popular.
- Big is not always better – It is tempting to think that a £50 incentive will do twice as well as a £25 incentive. That’s not always the case. Focus on the relevance of your incentive – and consider your messaging.
- If you’re using physical incentives, think it through – Utilita once sent out energy-efficient light bulbs as incentives but then had a lot of reports of them turning up broken. There is also the added shipping cost and logistics with physical incentives that must be considered.
- Operations need to be automated – Growing at 100,000 customers a year – at peak, you can do 11-12K customers a week so you need to have a platform to manage all of that. You don’t want to get bogged down in manually sending out your incentives.
- Make sure you have robust reporting – You need to have a way to clearly see the CPA and ROI of your incentive marketing campaigns. That way you can judge which campaigns are working better.
- Use incentive marketing to retain customers – customer retention is a huge part of the equation, especially in the energy sector. Think about how you could create a competition/ rewards program to engage existing customers.