Ethical counter competitor strategy fit for a FTSE 100

The brief

For a period of several years, the United Kingdom saw successive year on year increases in the cost of energy, both for gas and electricity.  As the market leader British Gas became particularly vulnerable to competitors taking advantage of rising prices to win customers away from British Gas.

As competition became more effective at winning customers, British Gas suffered increasing numbers of customer losses. Understanding how competitors were succeeding became increasingly important.

Strategy

By studying competitors approaches, tactics and patterns of behaviour we knew that we could understand how they were winning customers away from us, and work out legitimate and ethical ways to reduce the effectiveness of their activity.

Actions

We started with analysis to identify where the losses were at their worst, comparing measurement of customer losses against averages to pick out hotspots by competitor, by channel, by energy region and by market segment.

The next stage was to develop hypotheses which could explain the differences, but were at first unproven.  The key next step was to engage with frontline customer service and field sales staff to test how valid our hypotheses were.

With frontline feedback and insight we found that we could explain the differences in customer losses and what was driving them.  From there it became an exercise in action planning to devise ways to reduce customer losses by responding to the competitive threats we had identified with specific and targeted actions.

The big difference

We started with a focus on the competitor who was winning the most customers away from us, peaking at the loss of over 6000 customers each week.  Within 9 months our strategy and actions had reduced weekly customer losses by a third, annualised at over 125,000 saved customers – worth over £25m in retained value to the business.

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