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UK: British Gas to invest GBP 100 million in new reward program

British Gas loyalty programThe energy market in the United Kingdom is tightly regulated, with Her Majesty's government keeping a close eye on how well the country's Big Six energy companies are protecting the rights of their customers. To demonstrate their commitment to customer-centricity, British Gas owner Centrica plans to invest US $125 million in a new reward program - but will the investment be enough to stave off the watchful eyes of government regulators?
 
By Rick Ferguson
 
According to multiple sources, British Gas, the UK's top energy suppier, will direct the investment in a new loyalty program that offers customers reduced bills on a range of energy services as well as entertainment rewards delivered through their partner Sky TV. Rewards will include discounts on energy, boiler servicing, insurance and other services. The company also remains an earn partner in the Nectar loyalty coalition.
 
According to a report from Nasdaq, the move comes on the heels of warnings from goverment regulators that the Big Six energy suppliers may face caps on energy prices if they don't better self-regulate. While other companies have announced spring price hikes, British Gas has announced a freeze on tarrifs until at least August. The company further hopes that its investment in loyalty will convince regulators that it is offering value to its long-term customers. Some analysts, however, wonder if the move will pay off. Money quote:
 
"Analysts at Barclays said the loyalty programme could help retain customers which would lower Centrica's costs over time. However, it was questionable whether it would help persuade regulators and the government that the firm and the industry as a whole is doing enough to protect loyal customers, they said. '(We) doubt the government would distinguish between Big Six suppliers based on the introduction of a loyalty plan; especially when many materially cheaper fixed price tariffs remain available,' they said in a note."
Those British regulators are a tough crowd. Whether or not the move is due to government pressure, it's always gratifying to watch a company become more customer-centric. We're guessing that British Gas customers will respond favorably to the rewards.
 
Rick Ferguson is CEO and Editor in Chief of the Wise Marketer Group.