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Case Study

Revitalizing a utility's market position with customer loyalty

One of Europe’s largest utilities was steadily losing customers as consumers gained the right to select their energy supplier. To boost customer loyalty, Bain helped UtilityCo transform itself into a customer-focused culture with an innovative loyalty strategy designed to better meet consumers’ needs while creating significant financial benefits for the future.

  • min read

The Full Story

The Situation

UtilityCo* faced erosion of its long-established leadership due to regulatory changes that redefined marketplace competition. With more suppliers pursuing them, customers raised their expectations and took advantage of attractive offers, including improved pricing and more flexible energy products.

To curb the high customer churn rate in its retail business, Bain worked with the utility's CEO to improve customer loyalty through a comprehensive program, including cultural change.

Our Approach

In the utility sector, UtilityCo's decision to cultivate a customer-centric culture was a novel pursuit. Our team collaborated with senior managers on the development and implementation of a customer loyalty program, deployed across eight countries. The multi-year transformation was framed around Bain's Net Promoter System®.

A Net Promoter System goes far beyond measuring customer loyalty with a reliable metric. 

A Net Promoter System creates a comprehensive transformation program by combining solid analytics with:
  • Establishing a broad-base frontline mobilization
  • Building a robust operational infrastructure with processes and IT that support loyalty initiatives
  • Creating effective communication strategies for inside and outside the organization

A Net Promoter System also establishes timely high-velocity feedback loops between customers and employees that help promote behavioral change, allowing the company to better respond to custom

Net Promoter Score® implementation across Europe:

 

Our Recommendations

Bain advised UtilityCo to implement a Net Promoter System, e.g. via the following steps.

  • Benchmark performance against competitors in each country.
  • Address individual transaction performance by using "closed-loop feedback" processes to learn and improve customer loyalty in near-real time.
  • Quantify the economic benefits of customer loyalty.

The Net Promoter System earned substantial senior executive attention and top management followed through by strategically embedding it in the organization:

  • It established a customer-centric vision by business unit and implemented corresponding strategic change plans;
  • Management developed segmented offerings that better served customers and helped adapt local retail strategies;
  • The Net Promoter System was broadened to also drive "internal customer orientation": internal pilots were implemented with major support functions

Results Delivery capabilities of UtilityCo were strengthened to effectively implement internal and external priorities and to make program achievements stick.

The Results

With a customer loyalty-focused culture, the European utility is repositioning itself as an innovative competitor, offering more flexible pricing, products and services.

Customer loyalty is now embedded across the organization, from top managers to frontline workers—over half routinely receive Net Promoter Scores and customer feedback. For UtilityCo, increased loyalty is delivering significant financial benefits, with a 10-year program net present value of several hundred million Euro.

 

* We take our clients' confidentiality seriously. While we've changed their names, the results are real. 

 

Net Promoter®, Net Promoter System®, Net Promoter Score® and NPS® are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc

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