Energy retail competition in Germany intensifies
Recent regulatory changes in the German energy market lead to intensified retail competition not only for electricity but also for gas customers. German industry experts discussed the new challenges and corporate responses at the ibc eurforum conference on "Renaissance of energy retailing" in Berlin on 25/27 September 2007.
Christoph Riechmann, Director in the Frontier Energy Practice, presented on the UK and Dutch experience with energy retail competition and the success factors of corporate strategies. He described how distinct strategies are applied to target incumbent and prospective customers. Companies need to understand the role of their brand for customer retention. They also need to understand the different roles that prices play when selling to either existing or new customers. Successful companies have embraced new product designs such as bundling of electricity and gas ("dual fuel"), online tariffs, alternative payment schemes or price guarantees. Companies are also learning to understand how customers gained through alternative marketing channels such as direct marketing, advertising campaigns or the internet add to the value of the retail business in different ways.
Peter Reese from the online broker Verivox through his presentation confirmed that many of the developments observed in the UK were now also starting to emerge in Germany.
Frontier (Europe) has advised market players and regulators in the central and North-West European energy markets on retail market issues. For example, Frontier analysed the drivers of customer switching behaviour in the UK residential electricity and gas markets on behalf of the UK regulator Ofgem. Frontier has also advised on regulatory and strategic issues of energy retail competition in Germany, Austria, the Netherlands, Belgium, Portugal and Ireland.
The conference slides of Christoph Riechmann's presentation are available on request.
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