Flicking the switch: Consumer NZ follows up power campaign with new telco calculator

After the huge success of Powerswitch, Consumer NZ has waded into the murky waters of the telco industry and set up another price comparison website called Tel Me, which covers internet, landline, mobile, TV and mobile broadband services and hopes to clear up some of the confusion that has long characterised the industry. 

Overseas, price comparison websites for anything from insurance to groceries are big business, but New Zealanders have been slower to jump on that bandwagon. But, as the Powerswitch campaign showed, it can give consumers some teeth.

To make their informed decision, users fill in a questionnaire about their usage of things like text messaging, download and upload speeds and toll calls. It then presents the best options, at which point consumers can initiate a switch directly.

Of course, telcos are always launching new products and offers, and Telme relies on them to update those details, although current specials that last for less than a year will be excluded from the database, so it still pays to shop around and go direct.

Consumer NZ’s chief executive Sue Chetwin says the major difference between the Powerswitch campaign and this, which was more than a year in the making, is that it’s a lot more complex and requires “thousands of different calculations” for the variety of different users.

Also, because Consumer NZ doesn’t have particularly deep pockets and there isn’t industry backing for this, there isn’t the same amount of money or the media or creative firepower of DraftFCB, but they’re “doing the best they can to tell people it’s out there”.

She says some of the telcos weren’t particularly cooperative, which isn’t particularly surprising given some of them will inevitably be outed as the pricey options (from our quick play on the site, 2degrees and Orcon come out well). And it’s more proof, if any were needed, that the classic Gattung quote of confusion being an effective marketing ploy in the telco industry is still alive and well.

As for the Powerswitch campaign, which was funded by the Electricity Industry, it has smashed all expectations and forced many of the big power companies to respond with price reductions or offers.

By the end of July, DraftFCB’s planning director David Thomason says close to 340,000 people had gone to the site and 87,000 had switched power companies in June and July, which was up 49 percent on the same period last year.

Youtube Video“[The reason people weren’t switching] was all about apathy, so we had to make it simple and fun, not rational,” he says. As such, the post-it notes on foreheads was an appropriate platform to get people interested and check out the site (Powershop even used one on Che Geuvara’s head).

The main goal of the campaign wasn’t to keep people switching, because it costs money every time consumers do it. It was about what the Electricity Authority calls price convergence; about getting the market to become more competitive. And Thomason was amazed at how quickly some of them responded (Contact dropped its prompt payment price from 12 to 22 percent and acknowledged the campaign was the main reason for it, while Mercury came up with the Name My Number site).

“I suspect that most of the power companies didn’t think it was going to do anything,” he says.

The next phase of the campaign will focus on getting SMEs to switch, something Powershop won a TVNZ-NZ Marketing Award for last week.

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