OVO Energy Refer -a- Friend Case Study

Learn how OVO Energy used referral to shake up the energy market

In its first five years of business, OVO energy developed a large and happy customer base. It wanted to use referral marketing to convert this into an effective acquisition channel so, in 2017, partnered with Mention Me. 

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Advantages of referral marketing for energy suppliers

Among various effective means, referral programs help the energy supplier for the acquisition and retention of new customers, therefore driving customer acquisition through word-of-mouth. This will be a concern in highly competitive markets like the UK, where firms such as OVO Energy continuously seek ways to make themselves different and increase their base. Here is how referral programs can help an energy supplier:

1. Customer Acquisition and Growth

Referral programs can enable energy suppliers to attract new consumers by encouraging their existing customers to recommend the services to their friends, relatives, or colleagues. By referring more customers, users are recommending the company and creating a level of trust in them. In this highly competitive energy sector, when consumers are often looking for better deals, a personal recommendation from a friend can be a great influence.

2. Cost-Effective Marketing

Traditionally, energy suppliers have spent money on expensive marketing channels, such as TV advertising, online campaigns, or direct marketing. Referral programs are very cost-effective. On one hand, a company doesn't need to spend much money on advertising; it pays only when it really realises successful referrals—meaning when the referred customer has signed up. That performance-based approach ensures that marketing expenditure directly relates to customer acquisition, hence making referral programs a better channel.

3. Building Trust and Social Proof

For industries such as energy supply, trust is one of the key factors on which the customer bases their decisions. The customer needs to be certain that they receive a good price with trustworthy service. If an existing customer refers a friend, there is social proof because the new customer will more than likely have more trust in a recommendation from someone they know. This is something that the company can use by offering incentives to clients who refer their friends. 

4. Customer Retention and Loyalty

Referral programs help not only in bringing in new customers but also in retaining the loyalty of existing ones. Such programs provide bill credits or discounts for referrals, thus engaging customers and always giving them a reason to stay with the service. In the case of OVO Energy, happy customers, due either to very good rates or excellent service, feel more inclined to recommend others, knowing there is a reward awaiting them in turn. This reward-based infrastructure ensures loyalty and reduces churn because customers will want to stick with a company that truly appreciates continued support.

5. Encouraging Word-of-Mouth Marketing

Referral programs transform happy customers into loyal brand advocates. The process of referrals brings in newer customers when people spread the word about their interactions with energy providers.