Churn Management: Empower Customers to Power Sales


Why should customers choose your ESCO? And, once they have chosen your business, how do you keep them?

If your marketing team cannot answer these questions quickly and concisely, you may need to review your churn management strategies. Churn management involves lowering customer attrition rates by identifying valuable customers, understanding those who are likely to churn (or defect) from your company, and taking proactive steps to retain them.

The retail energy market is highly competitive – the average customer churn rate is around 35 percent. Further, the number of energy choice price comparison websites is growing, making it easier for customers to review prices and services offered. Smaller, independent suppliers are budding in numbers, too, increasing competition for customers. To maintain and expand your customer base it is important to keep your customers’ best interests in mind.

The primary driver of your competitive advantage and churn reduction may come out of learning about and improving the customer experience. McKinsey found that organizations are able to reduce costs by up to 25 percent and increase revenues by as much as 35 percent by using Voice of the Customer information to guide the structure and performance indicators of contact center operations.


Churn management success will be demonstrated by improved financial performance, a reduction in customer complaints and market-beating growth. Here are a few steps to get ahead of the curve and reduce churn.

1) Be Proactive

Remember that customers have options, which makes it imperative to differentiate your business from the pack. You can improve the reach and efficacy of marketing efforts by:

  • Surveying customers to learn what they expect and how they view your business (e.g., Voice of the Customer research and analysis can capture customer feedback about experiences with and expectations of your products or services to establish a path for delivering customer satisfaction).
  • Employing a data management platform to evaluate the propensity for customers to leave the company.
  • Understanding what competitors offer (i.e., prices and services offered) and ensuring your products and services exceed their offerings.
  • Bundling new products – by bundling services, customers are encouraged to select one energy company for several solutions while benefitting from a single, value-oriented purchase of complementary offerings. This in turn drives more competitive pricing and market opportunities to enhance profits.

2) Build Credibility

By developing customer relationship skills, your company will stand out above the competition. Focus on the skills below to positively impact the bottom line.

  • Work to find a solution that fully delivers upon the outcome the customer is seeking.
  • Draw attention to the good numbers. Demonstrate the savings available with your products and services. List reliability percentages and exemplary outage response times.
  • Do not misrepresent the features or advantages of your services. Give customers the complete truth, and let them decide if the proposed solution will work for them.
  • Review terms that may cover special fees, deposits, renewals, switching procedures and cancellation rights.
  • Become accessible by establishing customer service features, including complaint handling, hours of operation and toll-free numbers. Consider a company blog and using social media to build esteem and rapport with your customers.
  • Fix problems. If problems develop after the customer has purchased your service, don’t make excuses; fix them.
  • Keep promises (consistently). Keeping promises is crucial to the customer journey because it establishes a basis of trust and increases customer loyalty. The aforementioned McKinsey study highlights the financial impact consistent, courteous customer service can have on customer churn and revenues.

3) Follow Up

What practices does your company have in place to reduce churn? Do representatives follow up with customers quarterly, bi-annually… Or, do they wait until the contract is expiring to reach out?

By following up regularly – and, a simple online survey could help delineate how much contact is the right amount – your company can reduce customer churn and increase its average customer profitability and growth margins. Check in with your customers, give them updates about upcoming promotions and ways to save on costs through bundling or best practices for energy use reduction during extreme weather months.

Why is strategic communication like this important? Here are some customer satisfaction statistics to note:

  • 44% of US consumers switched to a competitor following a poor customer service experience. (NewVoice)
  • 82% felt their service provider could have done something to prevent them from switching. (Accenture)
  • 84% said their expectations had not been exceeded in their last customer service interaction. (Harvard Business Review)
  • 56% had to re-explain an issue when speaking to customer service. (Harvard Business Review)
  • 52% made more purchases from a company after having a good customer service experience. (Zendesk)
  • 86% are willing to pay up to 25% more for a better customer experience. (RightNow)

By getting ahead of customer satisfaction issues, proactive ESCOs can differentiate themselves from competitors, reduce customer churn and escalate profitability. Ultimately, the three churn management strategies outlined here can make the difference between slow, intermittent growth and rapid, sustainable success within the retail energy market.