consumer, Churn

It can be argued that the liberalisation of power and gas utilities, coupled with competitive pricing, entices customers to shop around for the best offers. In addition to being motivated by pricing, poor customer experience also leads to customer churn.

As the rate of customer churn increases, affected utilities spend more on introductory offers and price reductions to attract new customers, rather than focusing their attention on retaining customers, thereby adding further pressure on margins. The experts at BCG report that in 2016 about 10% of German consumers, for instance, switched electricity suppliers – compared with less than 6% in 2010.

This article was originally published in Smart Energy International 4-2018.  The full article will be published on 20 September 2018, but you can read the full article via our digital magazine today.