While the transition to renewable energy (Energiewende) and the liberalisation of the electricity market is reshaping the German electricity market dramatically, some utilities continue to rely on their old business models. But ongoing, destructive competition, rising retail prices and a tendency among consumers to switch mean electricity suppliers must develop new retail strategies. So how should the next evolution of modern retail strategy – ‘sales 3.0’ – look?
To survive and prosper, suppliers in the German electricity market must develop a retail strategy that is targeted, efficient and digital.
At the end of 2013, we conducted an analysis of the 28 largest German power suppliers and their 11 discounters in eight big cities in Germany to understand how different businesses are responding to this challenge.
Our study covered the business models and retail service offerings of each of the 39 companies. We asked:
How are electricity suppliers positioning themselves? What kind of image are they conveying?
In which sales areas are the suppliers and their discounters active? Which products do they offer and at what price?
How modern are their service offerings? What innovations are electricity suppliers using to make themselves more attractive to consumers and to boost future business?
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Developing a targeted offering for the retail market
Clear positioning is one of the most important strategic elements of retail strategy for electricity suppliers seeking to differentiate themselves in the marketplace. All aspects of customer communication must be directed at reinforcing this positioning, encouraging customers to associate certain characteristics with a particular utility and to select their electricity supplier accordingly. The supplier’s image, based on its product and service offerings, must appeal to the selected customer target group. Our study found that 75% of companies analysed are already using web content to strengthen their image in this way.