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. 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. 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. 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. 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. 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. 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. 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. Direct Mail
Addressing these communication challenges
11Mark Arnold, M-Cubed Consultancy, 2013. markarnold07@gmail.com
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. 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. 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. 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. 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. 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. 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. 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. 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