How a Cooperative Approach to Utility Offerings Pays Off in Customer Retention and Brand Trust
The retail energy industry faces many complex challenges, including increasing demand, the move from centralized to decentralized energy generation, emerging customer preferences, and more. While all of these obstacles will take considerable time and effort to resolve, there is one turnkey strategy that every company should be taking advantage of immediately – leveraging the right partnerships to differentiate their brand and increase choice and convenience, in turn leading to increased customer retention.
Partnering with home-focused companies that provide the ancillary services end-users need and want creates a mutually beneficial relationship for an energy provider, and enables all partners to extend their reach and improve their relevance to homeowners and renters alike.
The efficacy of this approach is brought into stark focus when we look at data on consumers’ saving habits. According to a May 2022 report from the US Federal Reserve Bank, nearly one-third of American adults would be unable to cover a small emergency expense of $400. Yet these types of emergencies are inevitable, with the same study reporting that 20% of adults have experienced a major, unexpected expense in the last year at a typically higher price tag between $1,000 and $1,999.
Retail energy providers can recognize these common financial challenges and offset them by pursuing partnerships with companies like a home warranty provider, to encourage financial stability and give added peace of mind to their customers.
This expansion beyond just utility offerings adds value for customers among other benefits for companies, including:
- Increased Customer Retention
With value-added services, customers are more likely to think twice about switching providers due to additional benefits. Additionally, offering ancillary products and services that have a high usage rate helps customers remain engaged – and therefore loyal – to your brand.
- Additional Brand Trust
Building trust in the effectiveness and value proposition of your brand is of the utmost importance; therefore, choosing a partner that aligns with your company’s values— while also acting as a natural extension of your products and services — is essential for a successful partnership. The right partner will demonstrate an understanding of what your customers need and prefer and then will develop successful, personalized solutions in response that will resonate with that existing trust.
- New Recurring Revenue Stream
The shared recurring revenue model of these partnerships increases a company’s valuation and can offset additional and/or unexpected costs. For example, a recent utility partner chose to add a home services protection program to their product in hopes of increased retention. The result far exceeded those expectations, with programs that not only yielded high attachment rates and increased retention but provided a new reoccurring revenue stream of commission.
Overall, the right partnership for your company will help it stand out, and ultimately meet the wants and needs of the homeowners you serve better than ever before.
To find out more on not only the benefits of these partnerships but how to choose and vet the right partner, click here to read a white paper about it.
By: Dwight Scruggs Vice President of Business Development at Cinch Home Services,
