British Gas to step up marketing after losing almost 400,000 customers in a year
British Gas is readying a raft of new products and digital marketing initiatives to try and reverse quickening customer churn after it revealed around 362,000 have left the business since the start of 2013.
The country’s biggest energy provider by market share is targeting a return to account growth in UK residential energy and services, following a 2 per cent year-on-year decline in customer numbers in 2013 to 15.3 million. The account losses have continued in early 2014 with around 100,000 switching to rival companies, the company says.
It is a contrast to the same period a year ago when British Gas said its “churn” – the number of customers leaving the provider – was the lowest it has ever been.
British Gas has come under fire from politicians and consumers following price hikes. The criticisms have sparked an upswing in customers switching to cheaper tariffs in recent months as challenger brands such as Ovo have stepped up marketing to exploit the backlash.
In response, British Gas says it will innovate across its retail portfolio and increase returns through efficiency in 2014.
It added “innovative products” and “enhanced digital capability” would be key to future expansion and retaining existing customers. A new billing system will launch in the coming months and the company expects growth to come from “the development of new offerings tailored to the most valuable customer segments”. The utilities firm is also looking to carve a point of differentiation around connected homes through its Hive service, which launched last September, claiming it is “core to our customer proposition”.
Sam Laidlaw, chief executive of British Gas owner Centrica said, the group has made “good strategic progress” after completing a review for the energy provider. The move has led to the introduction of new management structures across the business that will help drive consistent, “high quality customer service, reduce costs and drive growth through innovation”, he added.
“In British Gas, we have simplified our energy product range to just four residential tariffs, we have made further improvements to the transparency of our reporting, and we were the first energy company to reduce retail tariffs following proposed changes to the ECO programme”, said Laidlaw.
”Levels of trust between energy companies and wider society have come under severe pressure. I therefore believe that it will be essential to establish common ground between the participants in the debate, to enable us to meet the energy challenges which the country faces.”
A cost reduction initiative is also underway, which is expected to generate £100m of annual savings by the end of 2015. It is not yet known whether the changes will affect the company’s marketing division. Calls to British Gas for clarification were not returned before this article was published.
The announcements come as Centrica revealed residential profit for 2013 was £571m, a 6 per cent drop on the £606m posted a year earlier.
British Gas’ changes to its customer services offering comes just weeks after Ofgem’s reforms (2 Janaury) that force suppliers to offer just four tariffs and as well as simplify how prices are communicated.
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