Market mix modelling for an energy supplier

New entrants and a battle on price

Regulatory change and price comparison sites have together made it much easier for new energy suppliers to offer services to UK customers. These new suppliers typically don’t have strong brands but are able to offer energy at a competitive price.

In partnership with Annalect OMD London, we helped a big 6 energy supplier to respond to this threat. We designed analysis that established how existing customers and potential new customers respond to price changes and marketing communications.

Acquisition vs retention?

We looked at the costs and benefits of strategies for pursuing new customers vs retaining existing customers. This enabled us to identify which type of customer would be more profitable taking into account the cost of acquiring/keeping a customer and expected revenue.

We were then able to offer advice on the best strategies for each type of customer. We evaluated options like offering discounts to customers whose initial deal was maturing, reducing the standard variable tariff, carrying out brand-led advertising, deal-led advertising, and advertising that featured the rewards programme.

“We can use this”

The client was very pleased with the work and found it easy to understand. They implemented several of our recommendations straight away.

Commenting on the work, our key contact said “It was a really great session with some excellent work and interesting discussion” Client’s Research Project Manager.

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