Challenging perceptions, changing behaviours
DM acquisition in the energy supply market
1Mark Arnold, M-Cubed Consultancy,...
Energy supply market
Marketing communication challenges
2Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
Awareness is not the issue with switching
Consumers are well aware of the ability to switch…
…and aware of enough of the s...
Challenge – right audience, right time, relevant message
A complexity to the audience(s) that requires a high degree of ta...
Challenge – getting sales messages across directly
5
60%
Used a price
comparison site to
switch
24%
Used suppliers
website...
0%	
  
5%	
  
10%	
  
15%	
  
20%	
  
25%	
  
30%	
  
35%	
  
0%	
   5%	
   10%	
   15%	
   20%	
   25%	
   30%	
  
Bri+sh...
Challenge – how to make an invisible force, such as energy, real
7
With current meters hidden from view,
there’s no connec...
Challenge - overcoming rational fears and beliefs
8
Agree 39%There are no real differences
Agree 57%Savings only last a sh...
Challenge – turning customers into loyal advocates
9
“Power and utility suppliers have an impersonal and transactional rel...
The issue - engaging, winning and keeping customers
10
Awareness
Interest
Evaluation
Adoption
Loyalty
Direct, relevant and...
Direct Mail
Addressing these communication challenges
11Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
Connect data with messaging for targeted, personal & relevant content
Customer segments Propensity models based on value, ...
If it’s relevant people will keep it and refer to it
13
Do you keep your direct mail for reference? Yes 66%
DM is the most...
Direct mail can engage on an emotional and rational level
14
Emotional
Decision
TRUSTWORTHY
Rational
Decision
RELEVANT
Con...
Building trust – O2 Bill Analyser case study
15
Audience: Business customers.
Product: Bill Analyser - quick, easy, free w...
Connecting emotionally and relevantly – Sainsbury’s Plate case study
16
Audience: Existing online shoppers.
Goal: An emoti...
Changing perceptions – Welsh Tourist Board case study
17
Audience: Non-welsh water sports enthusiasts.
Goal: Encourage mor...
In a digital world, consumers remain connected with direct mail
18
51%% who would miss postal advertising from utilities
8...
Engage with rich digital experiences that get shared & talked about
19
And we know 44% of direct mail recipients will visi...
Why you should include direct mail in your media mix
20
Engage Flexible, exciting and modern creative solutions - tangible...
Mark Arnold, M-Cubed Consultancy
markarnold07@gmail.com
21Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
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DM acquisition in the energy supply market

  1. 1. Challenging perceptions, changing behaviours DM acquisition in the energy supply market 1Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  2. 2. Energy supply market Marketing communication challenges 2Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  3. 3. Awareness is not the issue with switching Consumers are well aware of the ability to switch… …and aware of enough of the suppliers to make a comparison. 3 Yes. 97% “Were you aware before today that it is possible for domestic customers to switch to different gas or electricity suppliers?” “Can you please tell me what companies or suppliers you are aware of that can currently sell you electricity or gas?” Mean no of companies 3 Source: Customer Engagement Survey, Ofgem 2008 Second highest mention after British Gas NPower 39% Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  4. 4. Challenge – right audience, right time, relevant message A complexity to the audience(s) that requires a high degree of targeting at household level 4 Triggers. E.g. moving house/length of residency Tenure. Renting or home owner Switching history & future intention AttitudesDemographics New build homes Environmental/ energy efficient connection Credit history/ financial risk Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  5. 5. Challenge – getting sales messages across directly 5 60% Used a price comparison site to switch 24% Used suppliers website 53%Had some contact with salesperson 46% 52% 63% 47% 53% 62% Source: Customer Engagement Survey, Ofgem 2008 2.5 times as many people may visit a price comparison site as opposed to your website. Despite the bad publicity, the demise of this channel leaves a hole for direct sales, especially for lower/older demographics. AB C1C2 DE 16-34 35-64 65+ Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  6. 6. 0%   5%   10%   15%   20%   25%   30%   35%   0%   5%   10%   15%   20%   25%   30%   Bri+sh  Gas   Npower   E.ON   EDF   Sco<sh  Power   Sco<sh  Electric   Challenge – making an emotional connection with consumers 6 Differentiation Trust Source: Home Utility Suppliers Report, Mintel 2009Brand Elements Map 6% Agree that brands are engaging A  dis+nct  lack  of  differen+a+on  and  trust,  even  around  smart  meter  installa+on.   Agree a brand has a distinctive image A brand I can trust “Consumers failed to understand why power and utility firms would want to provide them with tools to reduce their energy bills.” Ernst & Young 2011 Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  7. 7. Challenge – how to make an invisible force, such as energy, real 7 With current meters hidden from view, there’s no connection with usage and the implications on efficiency. Smart meters will alleviate this but another 7 years until full rollout Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  8. 8. Challenge - overcoming rational fears and beliefs 8 Agree 39%There are no real differences Agree 57%Savings only last a short while so not worth it Agree 70%Tariffs are too confusing Agree 52%Service will be worse Agree 68%You can’t believe what their sales people tell you Agree 58%Things will go wrong when switching Source: Customer Engagement Survey, Ofgem 2008 Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  9. 9. Challenge – turning customers into loyal advocates 9 “Power and utility suppliers have an impersonal and transactional relationship with their consumers. Consumers categorised their relationship with their energy suppliers at best distant and at worst negative.” Ernst & Young report on Smart Metering 2011 Disagree 46%It pays to stay loyal to a particular supplier 45%% of consumers who have switched 2+ times 34%% of recent switchers who intend to switch again in the next 12 months Source: Customer Engagement Survey, Ofgem 2008 Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  10. 10. The issue - engaging, winning and keeping customers 10 Awareness Interest Evaluation Adoption Loyalty Direct, relevant and personal engagement Overcoming rational fears and beliefs Real, emotional connection/ change perceptions Personal, relevant and valued experience As part of your media mix, direct mail can address all of these challenges Conversion funnel Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  11. 11. Direct Mail Addressing these communication challenges 11Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  12. 12. Connect data with messaging for targeted, personal & relevant content Customer segments Propensity models based on value, risk, upsell/cross sell potential History/intention Switching frequency, future value/risk, likelihood to switch soon New movers At end of first 3 months when first bill received. Or end of first year. Wealth indicators Propensity to default, payment options Lifestyles/interests Overlay customer data to match loyalty rewards – e.g. National Trust Household tenure Renters/home owners (level of risk) Composition Number of people, house size – potential usage levels and value 12 Connections that stimulate real interest and motivation Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  13. 13. If it’s relevant people will keep it and refer to it 13 Do you keep your direct mail for reference? Yes 66% DM is the most authoritive marketing channel Agree 55% A great information carrier to help make a rational decision Source: From Letterbox to Inbox, DMA 2012 Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  14. 14. Direct mail can engage on an emotional and rational level 14 Emotional Decision TRUSTWORTHY Rational Decision RELEVANT Consumers see trust and relevance as the most important attributes in marketing information and direct mail one of the best channels to convey them. Most important attributes in marketing Agree 82% Agree 79% Direct mail conveys these attributes Agree 56% Agree 47% Source: From Letterbox to Inbox, DMA 2012 Addresses the issue of trust and reassures rational fears and beliefs Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  15. 15. Building trust – O2 Bill Analyser case study 15 Audience: Business customers. Product: Bill Analyser - quick, easy, free way to break down bills and work out expenditure.       Creative: Demonstrated the benefit of the service by literally breaking apart in perforated sections, reflecting how the tool 'breaks down’ bills e.g. 'by person', 'by call type'. Result: 2.2% response rate (target 1%). Knowing what’s on customers minds can be used to build trust Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  16. 16. Connecting emotionally and relevantly – Sainsbury’s Plate case study 16 Audience: Existing online shoppers. Goal: An emotional connection with the new brand thought “try something new today.” Strategy: Nectar data to analyse and segment audience by shopping/purchase behaviour. Creative: Sequence of 5 postcards, tailored with enticing recipes and inspiring ways to shop, money-off coupons and a reminder to shop online. Result: Response rates as high as 49.25% – 400% above target. Turn something functional into something interesting Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  17. 17. Changing perceptions – Welsh Tourist Board case study 17 Audience: Non-welsh water sports enthusiasts. Goal: Encourage more visits during the autumn months – the quiet season – when the sea is warmer than the summer. Creative: Dramatised this message by delivering it on an actual piece of wetsuit neoprene – the exact thickness of an autumn wetsuit. Result: Response rate of 9% requestng further information. Tell customers something they don’t know and make it real Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  18. 18. In a digital world, consumers remain connected with direct mail 18 51%% who would miss postal advertising from utilities 80%% of consumers who open their direct mail 20% 36% Email equivalent Web equivalent Consumers are 4 times as likely to open post than email Source: Marketing Gap Tracker, Fast.map 2012 42% more utility customers would miss DM than web advertising if the channels disappeared. 79%% of consumers who open DM, then act immediately They also take it seriously Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  19. 19. Engage with rich digital experiences that get shared & talked about 19 And we know 44% of direct mail recipients will visit a brand website Digital watermarks Augmented reality Video mail Image and sound Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  20. 20. Why you should include direct mail in your media mix 20 Engage Flexible, exciting and modern creative solutions - tangible/real Win Sophisticated targeting, relevant & personal, information carrier Keep Personal dialog – change brand perceptions Direct mail places the power of your brand directly into consumers hands Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
  21. 21. Mark Arnold, M-Cubed Consultancy markarnold07@gmail.com 21Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
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