British Gas’ £100m investment in its new loyalty scheme appears to be too little, too late after shares in brand owner Centrica went into free fall after it admitted over 823,000 customers had defected to rivals in just four months.
Under the loyalty scheme, dubbed British Gas Rewards, the company offers a range of new tariffs, discounted energy and services, such as boiler servicing and insurance, as well as entertainment packages.
At the time, Centrica chief executive Iain Conn was bullish about the programme’s potential, insisting it would reward the loyalty of customers and give them new offers “that I think they are going to want and like”.
But it seems hundreds of thousands of customers liked it “not a lot” as the company said it lost nearly 6% of its customer accounts between July and October, with 150,000 switching provider after British Gas raised prices in September.
Shares in Centrica, which have already suffered from the looming threat of a government price cap hitting profits, fell by 15.5% to 138p.
The exodus has not dented British Gas’ domination of the market, however, it still has 13.1 million accounts. Even if the merger of Npower and SSE is given the go-ahead, the combined operation will still be second in the market with 11.5 million accounts.
One crumb of comfort is the fact that British Gas appears to have avoided a repetition of the 2015 CRM fiasco, when the business division was rocked by a 95% loss in operating profit during the first half of the year following a botched implementation. At the time, the utility giant blamed issues with the switch to SAP software for significant delays in issuing customer bills.
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