Energy suppliers’ B2C strategy questions customer’s relationship to energy and to the environment

A few years ago, energy suppliers sometimes enjoyed an image of proximity and professionalism that “protected” them during the opening of the market, in particular to small individual consumers.

It seems to me, through the different customers’ feedbacks to which I have had access, that this image fades away; as if individuals now regarded energy as a commodity that is truly comparable to the telephone or internet access.

This evolution, which can be observed in many countries, reflects both a lack of interest in energy and a trivialization of the electron.

In this context, what strategies can be implemented by energy suppliers? How can they position themselves, either to gain market share (for new entrants) or to limit market share losses for historical suppliers?

There is of course the “low cost” option of positioning with the lowest price possible or at least lower than the price offered by the historical supplier. The possibilities available to the suppliers for such a strategy are scarce : the price differences on the markets are reduced: no comparison with the tariffs observed on the telecoms market. Depending on the country, between 10% and 25% of the customers make the price a direct and main criteria to choose their energy supplier (I exclude from this percentage all consumers who take the price as an alibi to move away from a supplier who disappointed them but who did not particularly seek to reduce their bill). This strategy makes it possible to capture the “low-cost” market shares at great expense.

Differentiating involves giving value to the electron in the eyes of a residential consumer, thus capturing his attention on a subject that makes between 70% and 80% of indifferent consumers.

Two main paths can be explored to create this value:

  • Combine the delivery of electrons with services, services related to the subscription’s management, accompanying the consumer in his/her movement of uberization (even if losing revenue in the short term) or guiding him/her in its energy savings.
  • Differentiate these electrons by their environmental impact and therefore value more environmentally friendly processes of production, distribution and why not storage. Swiss and Scandinavian energy companies have built such strategies for more than 10 years and are paying off.

In this market more than any other, the most difficult is not to build a strategy but to implement it successfully. The first obstacle facing the supplier seeking to differentiate itself is to make energy less commonplace, more worthy of attention more often than once every 15 to 20 years, when purchasing a new boiler. It is a matter of questioning individuals in their relation to energy. It is not enough to communicate and talk to them about energy;  all techniques are necessary, individual but mostly collective.

The relationship between consumers and the environment must then be shaped. There is a resonance between the consideration of a country for the environment and the consideration given by every citizen of that country. The national or territorial vision on the subject influences citizens over time and, conversely, citizens influence the national or territorial vision. It is easy to understand that such changes can only succeed over long periods. But recognize that the movement is started.

Perhaps the economic constraints given to energy companies do not allow them to have the patience to wait for the results of such strategies … and force them to opt for a reduction in their margins. But do they really have a choice? Is the stake of the energy supplier, when drafting its B2C strategy, not to find, to invent the path that allows him to maintain his margins while nourishing an inevitable evolution?

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