Loyalty may depend more on age group than anything else.
Utilities may want to start asking their customers some personal questions.
Such as: "How old are you?"
Why? Because customer behavior may have more to do with age and other demographics than anything. For instance, younger customers compose the highest-switching segment. However, older customers tend to have more loyalty. But so too, these loyal customers are the hardest to woo from another supplier.
Four distinct consumer clusters have emerged in the utility markets to show switching behavior is linked in part to the age of the consumer. The first group, which comprises those under 35, appears very responsive to switching providers and almost seems to enjoy doing so. The second group, consumers in their 40s and 50s, is amenable to switching, primarily for price. The third group, of 55- to 60-year olds, is very loyal to their existing providers and unlikely to switch. The fourth cluster, over age 65, is amenable to switching providers, primarily for features. %n1%n
By definition, retail competition means more choice for customers. Customer switching behavior and willingness to consider and switch service providers must be carefully studied by any utility facing competition. Why customers switch, how they can be retained or attracted and what that will cost are critical considerations. The answers may lie in understanding and identifying specific customer profiles.
"10 Cents a Dance"