My individual seminar paper is written on EDF Energy. This is one of UK’s largest energy companies and its large producer of low carbon electricity. They generate around one fifth of the UK’s electricity. They supply electricity and gas to around 5.5 million residential and business customers, making them the biggest supplier of electricity by volume.
The market segments they target; 1. They target individual home owners through SME. 2. They also target business organisations like Heathrow and major businesses like Tesco.
Before i go further let me touch on a brief introduction on customer value, customer value can be defined as the difference between what a customer gets from a product and what he or she has to give in order to get it.
For EDF Energy the nature of the customer value are based on the fact that customers are understandably most interested in cheap energy as said by Chris Lodge, Head data and customer insight, EDF Energy. He went on and stated that “it can be challenging to engage customers and get them interested”. So the key factor they looked at was segmenting customers in ways that enable EDF Energy to target customers most likely to respond to an offer as well as help reduce debt. So they adopted the use of SAS; a business analytics software and services, this helps them with their goal to increase the value of profitable customers while maintaining their green credentials and promoting energy efficiency.
So in predicting customer value, he went on to explain that “energy prices are fluctuating” which means that the profit made on gas for example can vary, and so identifying the most valuable customers in terms of the income they bring can be difficult. So they try to move away from the value amount to look at the energy they are usually using.
Lodge also notes that this industry like the mobile communications is prone to high churns, with customers switching suppliers based on more attractive offers,
References: 1. http://www.edfenergy.com/about-us/about-edf-energy/index.shtml 2. http://www.edfenergy.com/about-us/about-edf-energy/our-structure/index.shtml 3. http://www.edfenergy.com/about-us/our-mission.shtml 4. http://www.britishgas-savings.co.uk/gas-and-electricity-offers/uk-energy-market/edf-energy/ 5. http://reference.findtarget.com/search/EDF%20Energy/ 6. http://www.sas.com/offices/europe/uk/solutions/customer_successes/EDFEnergy.html 7. http://www.referenceforbusiness.com/management/Ob-Or/Order-Winning-and-Order-Qualifying-Criteria.html 8. http://www.edfenergy.com/products-services/index.shtml 9. http://www.pwc.co.uk/eng/industries/electricity_and_gas_industry_issues.html