Industry

Energy & Utilities

Company Profile

  • >€50bn annual revenue
  • Leading energy supplier in Europe
  • Company serves more than 20 million electricity customers and 10 million gas customers

Situation and Objectives

  • Segment residential customer base using ERP/CRM data
  • Develop customer value and churn prediction model
  • Increase overall efficiency of marketing spend

Approach

  • Conducted market research study with customers to segment them in an actionable way.
  • Segmentation criteria were finally customer value and churn risk. This led to three distinctive segments: Innovators, traditionalists, and bargain hunters.
  • Identified their needs in terms of product, price, promotion and channel and developed measures accordingly.

Customer Segmentation Concept

Results

  • Developed a customer segmentation concept based on a multi-dimensional scoring model.
  • Developed a customer retention strategy, including target segments, targeted marketing, and the sales channel mix.
  • Efficiently allocated marketing and sales budget resources based on customer value.
  • Designed a strategy for efficient management of marketing and channel partners, and defined a specification sheet for IT system integration.

Impact

  • Churn rate of core segment reduced by ~28%