Germany has one million Turkish households and about 100,000 Turkish-run small businesses. It is a substantial market that up to now was neglected by energy providers.
Eon, Germany’s largest energy company, hopes to change that with a service aimed at Turks living in Germany. The new brand – Enerji Almanya or “German Energy” – will initially concentrate on Turkish customers and businesses in Berlin and the Ruhr area in North Rhine-Westphalia.
“There is great potential for a German-Turkish market,” said Christian Drepper, the managing director of Enerji Almanya. “By 2020, we want to have up to 150,000 households as customers.”
That would be a 15 percent market share. Mr. Drepper is basing his plans on market analysis and many conversations with Turkish households and businesses.
Enerji Almanya is the first initiative from Eon’s start-up incubator Agile, which launched last year.
In an interview with Handelsblatt, Eon chief executive Johannes Teyssen said Agile is part of the company’s push for ideas that generate new sales and growth. “We need new businesses past our core area and must embark on new paths,” he said, but was realistic about his expectations on how much the company could help Eon’s bottom line.
“We’re under no illusions that we’re inventing a new iPhone,” said Mr. Teyssen. “But we have to give little plants a chance to grow, and some will have really beautiful leaves.”
“We’re going to engage in a real street battle. We will be going from door to door in apartment buildings, and we’ll be at Turkish supermarkets, shopping centers and furniture stores.”
Turkish customers differ from Germans when it comes to electricity. More than 80 percent get their electricity from local public utilities, and Turkish households change providers much less often than German households. They place more importance on dependability and are less concerned with getting the cheapest offer, but they do want to keep their annual costs under control.
In addition to a bilingual, easily-accessed service, the new plans offer a calculation of annual energy consumption at any time — so customers can always keep an eye on their bills.
Eon doesn’t intend to match the prices of low-cost providers on Internet comparison sites. But customers will definitely be able to save some money. The basic plan – Güvenly Enerji or “Trust Energy” – would cost a typical four-person household in Dortmund about €1,140 annually, or $1,420. That’s €90 less than the basic annual cost for 4,000 kilowatt hours from the local provider.
Energy expert Andreas Stender, of the consulting firm A.T. Kearney, definitely sees potential. “The appeal to a special ethnic group can be successful, and the Turks are a particularly large group in Germany,” he said. What is crucial is to find the right sales channels and partners, and “to communicate with Turkish customers in an appropriate manner.”
There is cut-throat competition in Germany between energy companies, public utilities and providers of cheap electricity, with companies under constant pressure to come up with new products to reach customers.
That’s what Mr. Drepper hopes to do with Enerji Almanya. “At the beginning, we’re going to engage in a real street battle,” he said. “We will be going from door to door in apartment buildings, and we’ll be at Turkish supermarkets, shopping centers and furniture stores.”
“I am convinced by the concept of appealing to customers with Turkish roots through their own brand.”
“With Agile it’s easier for employees to do something entirely new, even beyond their departments,” Mr. Teyssen said. “For example, in our underground garage there’s a new system for charging electrical cars. An employee from our commercial company came up with the idea. Without Agile, he might not have known where to bring his idea.”
That’s the way it was with Mr. Drepper, who was working in the communications department at Eon. He came up with the idea for a Turkish-aimed effort when he saw how a telecoms provider had launched a similar project. At the beginning of this year, he decided to develop the idea as a start-up entrepreneur.
“Of course, we could have done this within the existing sales organization,” said Mr. Drepper. “But we have more freedom as an independent company.”
For now, Enerji Almanya is as small as its targeted customer base. It buys electricity through the subsidiary Eon Deutschland, and invoices are sent out by a subsidiary of the Munich-based parent company.
The new brand has the blessing of top management. “I am convinced by the concept of appealing to customers with Turkish roots through their own brand,” said Mr. Teyssen.
But Eon’s chief will be keeping the pressure on his company’s new start-up. “We want to see quickly whether it really works,” he said.
Jürgen Flauger reports on the energy market for Handelsblatt’s companies and markets desk. To contact the author: email@example.com