Get your value proposition sorted

For a long time customer apathy was the electricity retailer’s friend.

Some retailers were not getting the customer backlash they deserved by charging a sizeable premium relative to others for a service that was largely the same. It’s been interesting to see the reaction by retailers and customers to the ‘What’s my number’ campaign driven by the Electricity Authority and Consumer.

I understand the early success of the campaign exceeded expectations by three or four times. Now after four months things have slowed a lot but still there have been around 400,000 calculations made on the web site. That’s pretty phenomenal and there are more opportunities to make a difference too.

But the really cool thing is the response to the campaign from electricity retailers. Defensively Contact increased their prompt payment discount for internet payers by 10%, dropping an estimated additional $200 profit a year for each customer that was already on this plan. That’s a big hit to the bottom line, but then they had to do something as they were losing customers big time.

From a marketing perspective the reaction of Powershop and Mercury was smart. They chose to take advantage of the ‘What’s my number’ campaign by driving traffic looking for the Electricity Authority and Consumer site to their retail sites. Both retailers used key words to create great search results compared with the ‘What’s my number’ site. Powershop used ‘What’s your number’ and Mercury ‘Name my number’!

Powershop’s and Mercury’s pages showed a comparison tool and I’m sure that many people thought this was the site being promoted by the Electricity Authority and Consumer.

Would it have worked for Trustpower and Contact who are at the higher end of the pricing? Probably not, but for those with lower prices such as Powershop and Mercury they stood a good chance of getting customers who compared prices.

The reaction of the electricity retailers and switching by many thousands of customers indicates that the Electricity Authority and Consumer ‘What’s my number’ campaign has been a success. But what’s next? What about:

• More PR around those that have switched
• Crowd sourcing – get associations/industry bodies to leverage their membership bases to tender for the best price
• Target certain regions where there is a majority retailer with a much higher price compared to others and campaign at a more regional level
• Email customers once a year and especially when there has been an increase in prices suggesting they check their plans again.

Go 2 Market principle: first get your value proposition sorted. Then make it work hard even by taking advantage of others campaigns, or be prepared to be taken advantage of.