The electricity market is highly competitive, with deals around price often being the only differentiator between brands. So Mercury Energy decided to try something different. And it paid off.
Anyone who’s noticed the flurry of advertising campaigns from electricity companies come winter has probably guessed how much of a competitive market it is. Particularly when each company is selling the same utility, where usually the only differentiators offered are enormous ‘save’ incentives in an effort to retain customers. Despite the miracle that is electricity – which heats our homes, allows us to charge our devices and allows us to keep the fridge on – it’s a low engagement category, and when the lights are on, customers generally switch off.
And thus, customer churn is high (21 percent) and acquisition is expensive, creating a highly competitive environment.
The industry norm is to reward disloyalty, not loyalty, with doorknockers and telemarketers offering joining bonuses to acquire new customers and money-saving incentives to retain customers who have decided to join a competitor.
So, Mercury needed to change up its game if it wanted to keep its customers, so it decided to reward them to make them feel loved and like their loyalty was valued. It also wanted customers to get excited about using power and think more about the difference it made in their lives, and have a reason to say ‘no’ when competitors came knocking at their doors.
As a response to its challenging target market, Mercury launched free Good Energy Days (GED), a free day of power where residential customers get to use as much electricity as they like with Mercury picking up the tab.
The idea was simple and worked on many levels: it was commercially sustainable – a high perceived value but at a sustainable cost, it promoted engagement and encouraged people to use their imagination about a product they normally take for granted and the offer was easy for customers to understand and redeem.
It also encouraged customers to engage digitally via Mercury’s website and helped Mercury achieve its highest customer satisfaction scores since measurement began in 2007, as well as reduced churn for participating customers.
After a successful launch to a targeted audience in 2015, Mercury decided to rolled out the offer to its entire residential customer base in February 2016 with a multi-channel campaign using FCB, Touchpoint and NZ Post to plan and manage the delivery of the campaign.
Mercury launched TVCs, using cute kids to tell stories about free power, where they came out with phrases like “I’d make dinosaurs” and “I’d make lightning come out of my bike”, making for more interesting viewing than adults talking about doing 12 loads of washing.
Another ad followed Ted, one of the kids who appeared in the first ad, who wanted “a huge remote control car to race all his friends” and the idea was brought to life by bringing a set of dodgems to Ted’s street.
The campaign also included shorter cuts of the TVCs for social media, online banners, direct mail, eDMs, Google promotions, targeted search activity, invoice reminders and more.
Increasing digital engagement also gave customers access to helpful tools like the Good Energy Monitor (GEM) that enabled them to stay in control of their usage and costs.
Key parts of Mercury’s strategy included targeting its least digitally engaged customers with an online offer to drive take-up and using digital elements to deliver a data-driven and performance-optimised campaign to target specifically at a Mercury only audience.
Mercury’s GED campaign turned out to be a great example of using a simple but compelling offer to capture the imagination of customers, delivering hard commercial benefits and softer benefits.
The results exceeded expectations with more than 88,000 customers signing up for a free day, after it was rolled out to its entire residential customer base. Its short-form digital content on social media delivered over 400,000 impressions, over 11,400 clicks and 64,365 engagements with its ten other promoted posts.
The campaign also had high visibility in the country and 20 percent of New Zealand’s adult population claim to have seen the campaign, with 45 percent of Mercury customers having seen it.
Ten percent of those who saw it said they discussed the campaign with friends and family and the number is expected to grow.
After the initiative launched, Facebook exploded with customer comments, photos and tags from the day the offer launched, with customers openly sharing their chosen days.
The campaign also got some media attention, with Paul Henry and Hilary Barry talking about how excited they were about it, resulting in a live mention during breakfast TV and over 53,000 views on a video on Henry’s Facebook page.
While it’s too early to see the full impact on satisfaction, the campaign has generated positive sentiment amongst customers, of 60 percent, and non-customers, 37 percent, a great feat in a low-engagement category.
42 percent of those who saw the campaign (customers and non customers) took action as a result, with 916 non-customers clicking through to the ‘join’ form on Mercury’s landing page, showing the interest generated by the campaign. 98 percent of customers redeemed their GED online and Mercury saw its registrations for its online My Account quadruple in comparison to the previous comparable period.
And on top of all these great results, Mercury can now add two Marketing Awards to its successes.
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