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Why Octopus Energy's Business Model is so successful?

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Octopus Energy’s Company Overview


Octopus Energy is a UK-based retail electricity and gas supplier specializing in sustainable energy. Established in 2016, it is part of the Octopus Group, a British asset management company. Octopus Energy is renowned for its customer-centric approach, offering affordable green energy solutions to over 1.5 million customers across the UK. The company's mission is to drive the green energy revolution by using technology to unleash the potential of renewable energy sources. They are committed to transparent pricing and have a reputation for excellent customer service, which has led to a high customer satisfaction rating. The business model of Octopus Energy is centered around providing renewable energy solutions to both domestic and business customers. They purchase green energy from a variety of sources, including wind farms, solar power installations, and anaerobic digestion plants. They also have a unique 'Agile' tariff that changes the price of energy throughout the day in response to supply and demand, encouraging customers to use energy when it's most abundant and cheapest. The revenue model of Octopus Energy is primarily based on the sale of electricity and gas to its customers. They earn revenue by charging customers for the energy they use, with the price determined by the tariff the customer is on. Additional revenue streams include the sale of smart home technology and electric vehicle charging solutions. Octopus Energy also benefits from government schemes designed to encourage the use of renewable energy, such as the Feed-in Tariff scheme, which provides payments to those who generate and export their own electricity.

https://octopus.energy/

Country: England

Foundations date: 2015

Type: Private

Sector: Energy & Utilities

Categories: Energy


Octopus Energy’s Customer Needs


Social impact:

Life changing: motivation, affiliation/belonging

Emotional: provides access

Functional: reduces cost, quality, informs


Octopus Energy’s Related Competitors



Octopus Energy’s Business Operations


Customer relationship:

Due to the high cost of client acquisition, acquiring a sizable wallet share, economies of scale are crucial. Customer relationship management (CRM) is a technique for dealing with a business's interactions with current and prospective customers that aims to analyze data about customers' interactions with a company to improve business relationships with customers, with a particular emphasis on retention, and ultimately to drive sales growth.

Customer loyalty:

Customer loyalty is a very successful business strategy. It entails giving consumers value that extends beyond the product or service itself. It is often provided through incentive-based programs such as member discounts, coupons, birthday discounts, and points. Today, most businesses have some kind of incentive-based programs, such as American Airlines, which rewards customers with points for each trip they take with them.

Digital:

A digital strategy is a strategic management and a business reaction or solution to a digital issue, which is often best handled as part of a broader company plan. A digital strategy is frequently defined by the application of new technologies to existing business activities and a focus on enabling new digital skills for their company (such as those formed by the Information Age and frequently as a result of advances in digital technologies such as computers, data, telecommunication services, and the World wide web, to name a few).

Digital transformation:

Digitalization is the systematic and accelerated transformation of company operations, processes, skills, and models to fully exploit the changes and possibilities brought about by digital technology and its effect on society. Digital transformation is a journey with many interconnected intermediate objectives, with the ultimate aim of continuous enhancement of processes, divisions, and the business ecosystem in a hyperconnected age. Therefore, establishing the appropriate bridges for the trip is critical to success.

Data as a Service (DaaS):

Data as a Service (DaaS) is a relative of Software as a Service in computing (SaaS). As with other members of the as a service (aaS) family, DaaS is based on the idea that the product (in this instance, data) may be delivered to the user on-demand independent of the provider's geographic or organizational isolation from the customer. Additionally, with the advent[when?] of service-oriented architecture (SOA), the platform on which the data sits has become unimportant. This progression paved the way for the relatively recent new idea of DaaS to arise.

Sustainability-focused:

Companies that manufacture fast-moving consumer goods and services and are committed to sustainability do ecological impact assessments on their products and services. While research-based green marketing needs facts, green storytelling requires imagination and location. Employees responsible for the brand definition and green marketers collaborate with product and service designers, environmental groups, and government agencies.

Disruptive trends:

A disruptive technology supplants an existing technology and fundamentally alters an industry or a game-changing innovation that establishes an altogether new industry. Disruptive innovation is defined as an invention that shows a new market and value network and ultimately disrupts an established market and value network, replacing incumbent market-leading companies, products, and alliances.

Energy:

Energy development is an area of study concerned with adequate primary and secondary energy sources to satisfy society's requirements. These activities include those that promote the development of conventional, alternative, and renewable energy sources and the recovery and recycling of energy that otherwise would have been squandered.

Subscription:

Subscription business models are built on the concept of providing a product or service in exchange for recurring subscription income on a monthly or annual basis. As a result, they place a higher premium on client retention than on customer acquisition. Subscription business models, in essence, concentrate on revenue generation in such a manner that a single client makes repeated payments for extended access to a product or service. Cable television, internet providers, software suppliers, websites (e.g., blogs), business solutions providers, and financial services companies utilize this approach, as do conventional newspapers, periodicals, and academic publications.

Pay as you go:

Pay as you go (PAYG) business models charge based on actual consumption or use of a product or service. Specific mobile phone contracts work on this principle, in which the user may purchase a phone card that provides credit. However, each call is billed separately, and the credit balance is depleted as the minutes are used (in contrast to subscription models where you pay a monthly fee for calls). Pay as you go is another term for pay & go, pay per use, pay per use, or pay-as-you-go.

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