Energy Customer Engagement: 8 Lessons Learned in 2019

What’s Working?  What’s Not?  What’s Next?

By Dan Seaman

As we race through November, crash into the holidays, and close out the fourth quarter, 2020 is now clearly in our sights.  As I write this, strategic plans and priorities for the year ahead are being carefully mapped out and reviewed in conference rooms across the country.  But, in these closing weeks of 2019, how many of us are taking stock of how our plans and priorities for this year actually worked out?

For our team, one of the most valuable parts of year-end is our “lessons learned” review.  Because the focus of our work is the customer journey, and because customer expectations and behaviors are constantly changing, we do a lot of experimenting over the course of the year to find the best and most compelling ways to impact customers and drive results.  An annual “lessons learned” assessment is really all about what worked, what didn’t, and what’s next.  It’s the foundation of a strategic planning process and a key tool in measuring the progress, impact, and momentum of our agenda …where to double down and where to adjust.

When it comes to customer engagement and the customer journey, we learned 8 lessons this year.

1. Customers Want to Feel Special.

The most effective customer engagement campaigns this year were ones that (1) were personalized to the customer, (2) were appreciative of the customer, (3) used language like “VIP”, “elite”, “upgraded”, and “exclusive”, and (4) gave the customer more than they were expecting.  These types of campaigns regularly had extremely high email open rates as well as email click rates.

2. Customers Like a Little Fun.

Any company focused on customer journey should be constantly measuring customer behavior and innovating new rewards and benefits, all in an attempt to find the best ways to engage the customer over the long term.  For example, one of our goals this year was to promote repeat customer logins to their reward accounts as a way to maximize reward impact CLTV.  Customers love games, so we designed a “Daily Gift Card Giveaway”, which customers could only enter by logging in to their reward account every day.  That new game saw the repeat customer login rate more than double, thanks in large part to another lesson we learned this year…

3. Gift Cards Get Attention.

While customers like a little fun, they like gift cards even more.  But gift cards are an area where energy partners often over-spend.  It’s very costly to give gift cards to every customer, but reward program benefits like a Daily Gift Card Giveaway allow our partners to get a big gift card impact with no actual cost.  The customer response to the Daily Gift Card Giveaway has been so positive that it’s inspired more gift card-powered games and rewards, like a $500 Epic Gift Card Giveaway, to build on its success.  Gift cards can’t be the foundation of a loyalty program, or the driver of a customer journey without breaking the bank, but used tactically as part of a broader strategy, they’re great attention-getting value-adds.

4. Timing Makes a Big Difference in Customer Engagement.

One of the key pieces of a customer journey’s success is the timing.  You can have excellent content, excellent rewards, excellent intentions, but if they don’t get in front of the customer when the customer wants/expects them, you’re not going to see the best results.  For retail energy companies, there are really two options for when to deliver rewards to the customer: (1) At the time of sale; or (2) After the customer gets on flow.  The rationale for delaying rewards until after a customer gets on flow is logical enough…why give rewards to someone who’s not going to become a customer?  But, lesson learned this year, it turns out that giving rewards to customers as close to the point of sale as possible can actually reduce churn rates by nearly 10%.  Being welcomed into a reward program immediately reinforces the customer’s choice, creates a positive, engaging, welcoming tone, and immediately shows them that you’re on the ball and follow through, all while they’re spooling up as a new customer and you’re making your first impression.

5. Customers Like Surprises.

Several of the most successful customer communications this year involved surprising the customer with unexpected, unpromised extras.  These surprises range from “just because” bonuses, “VIP upgrades”, holiday add-ons, renewal surprises, and event-driven perks.  These surprises demonstrate to customers that you’re thinking about them, and that you’re going above and beyond for them.  They often have the highest email open rates, highest click rates, and most frequent mentions on both social media and satisfaction reviews/ratings.

6. Certain Customers Really Respond to Social/Community Impact.

Many energy partners wrestle with the topic of social, community, or charity impact and how to incorporate it into their business model.  Abstractly, many of us believe that customers respond positively to these types of campaigns and messages, but what should those charity campaigns look like?  How far do you need to go?  How much do you need to spend?  This year we added a charity module to our reward programs, giving our energy partners the ability to offer customers a “charity choice” to plant a tree, provide meals to hungry families, send a soldier care package, etc. either tied to a special event like a Thanksgiving campaign, or as part of new customer onboarding.  Our data shows that, for about 10% of customers, the inclusion of a charity or social/community impact campaign is a key motivator and driver of engagement.  That suggests that charity and social/community impact campaigns can be an important part of a customer engagement or satisfaction plan, but in a targeted way that limits the related spend/investment and maximizes impact (i.e. added to green campaigns, used to engage influencers, promoted in social media).

7. Customers Like to be Engaged in Different Ways.

If maximizing customer engagement is the goal, the best way to do that is to engage with them across multiple channels: Email, SMS, and print.  The most successful programs this year (with 80%+ customer engagement) all featured multi-channel messaging. 

8. Less is Sometimes More.

When creating a customer reward program, retail energy companies have to decide what type of rewards to give to the customer, how much, and how often?  The goal always is to find the sweet spot…the greatest impact on results (sales, churn, retention, renewals), for the least amount of money.  With reward options at $25, $50 and $100, many partners automatically assume that the higher reward amounts will perform the best, i.e. a customer will be more motivated by $100 than $25.  This year the data shows that’s actually not true.  This year the best sales conversion, churn, retention, and renewal rates were all from campaigns where the $25 monthly rewards are in place.  While we’ve never surveyed customers on this specific reward amount question, we believe that customers find the $25 reward level more realistic and believable, and are setting their expectations accordingly…and it costs less.  Win win.

You’ve still got some time left before we officially close the book on 2019.  Consider running your own “lessons learned” process.  A brief look back is often a great way to find out what’s ahead.

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Dan Seaman is the President and Founder of Optimus