When the winds of change blow, some build walls and others build windmills.

The energy industry is still facing windy times. The most expensive year for electricity ever (2017) for consumers will continue to increase customers’ willingness to switch. Private households have never had to pay as much for electricity as they have this year. Things are not looking any better for 2018. Although purchasing has become a little cheaper (the price on the electricity exchange fell by 3% between January and October this year compared to the same period last year) and network charges will largely fall slightly, some households will even have to pay more. The major suppliers are keeping prices largely stable, while their competitors are reducing them by up to 2% or increasing them by an average of 2.4%. From the customer’s perspective, the price has doubled since 2000 to today to an average of 28.18 cents per kilowatt hour (source: Verivox). Current studies show that the amount of the bill is crucial for customer loyalty. The source of the electricity and the quality of customer communication or service are also decisive factors. It shows once again how important price is at the end of the day for the decision. Customers’ willingness to switch is increasing due to the many new suppliers, on the one hand, and due to individual, specialized and target group-oriented best price, bundle and flat rate offers, on the other. Electricity and gas are classic comparison products – innovative and individualized communication is now even more important here.

New providers

Although alternative energy suppliers are enjoying increasing popularity, they are also struggling with a lack of awareness and the associated trust. Nevertheless, many established suppliers dream of the kind of new customer growth rates that alternative energy suppliers are achieving. But in addition to security of supply and trust, the most important factors are price, ecology and service. And it is precisely this interplay of “price, story and approach” that makes the suppliers so sexy for households.

“Eco” as a purchasing decision

Electricity that comes 100% from renewable sources and increased sensitivity to the environment are further motives for choosing or changing a provider. It is well known that bad electricity, i.e. energy from nuclear and coal power, is largely rejected. Furthermore, there is currently an increased awareness of storage technologies, e-mobility, smart homes and a tendency towards more demand-oriented and individualized offers.

Innovation for customer communication

Industry experts are emphasizing digitalization as a means of innovation and technological development in the areas of big data, tenant electricity models, new partners, communities and platforms, and see it as a key factor in the survival of energy suppliers. Those who now manage to convey their affinity for innovation in their communications will have a clear competitive advantage in the battle for customers. Because providers can no longer win anything in terms of price and ecology. According to customer surveys, the weak points today are “inertia” and “price”; there is room for improvement in customer service, innovation and the quality of advice. The current developments give rise to the following questions:

How do we create trust with our customers?
How do we achieve loyalty?
How do we communicate innovation to the outside world?

Get rid of obstacles – think new, and above all think from the customer’s perspective. The product portfolio, the digital corporate DNA and the appropriate IT tools are the important windmills in times of change. With Stadtwerk365 you get the modern end-to-end solution for your daily business. It was developed to provide energy suppliers with a suitable tool to make the best possible use of the digital revolution and to adequately respond to changing customer demands. With ITVT Consulting, you also get an extremely competent partner. Thanks to the immense experience that ITVT Consulting has built up over the last two decades – especially in the energy industry – it knows very well the challenges, but also the potential that digital change brings with it. Sources: Verivox, Federal Network Agency, eex.com, TSP Image, Performance and Standing Study Q4 2017)