Power struggle for market set to sizzle

By DITA DE BONI

It seems there are two types of electricity consumers - the apathetic and the confused.

Confusion has come from the different names adopted by electricity retailers and lines businesses in the aftermath of the industry's fracture 18 months ago. If the lack of self-motivated provider-changing is anything to go by, apathy is affecting the remainder of energy consumers, who still think they are paying their power bill to the big Government agency that handles those types of things.

But the game of creating market share in electricity is set to sizzle. One retailer that has decided to overhaul its entire branding and marketing strategy for the fight is Auckland stalwart Mercury Energy.

The former Mercury Energy was divided into two companies in the great electricity schism of 1998. The lines business was sold to Vector, while Mercury Energy retained the retail side of the business under the new ownership of Waikato's Mighty River Power.

Thankfully, one of the first things Mercury has decided to do in its branding overhaul has been to simplify the bills sent to consumers. They will now carry only the name Mercury Energy which, research has shown, has loyalty with the residential customer base.

The Greek God Mercury with the lightning bolt has been retained as a logo. It has been around since 1922 when the company was part of the former Auckland Electric Power Board (AEPB).

"We had to think long and hard about keeping that name, considering the baggage that Auckland's power crisis gave to the name Mercury," said Mighty River marketing and sales manager Angela Armstrong.

But, she said, "research strongly supported sticking with the name."

The company only now feels ready to justify claims from a new ad campaign after a year of no advertising. By appropriately named Auckland agency Generator, the ads outline five different "value-added" services the retailer provides.

Andrew Stone, managing director of Generator, said many consumers of commodity products like electricity did not think deeply about the services they used every day, and had to be made to see utilities like any other product.

"The key to success in this type of marketing is, among other things, to ensure the organisation delivers or exceeds customer expectation."


Mercury's competitors have turned up the heat in the past year, soliciting Mercury clients through schools and other community organisations. It has been whispered that some salespeople are claiming certain companies, including Mercury, no longer exist. Naturally, all retailers emphatically deny doing so, but there is no doubt the gloves are off and it is a "scramble to get the high-end consumer," said retail general manager John Foote.

The company did not want to advertise its services until it fixed long customer call waiting times and problems with the new billing system, he said.

He agreed the company's 270,000 customers were often waiting long spells to be answered at the call centre, but "we are now answering calls in under one minute on average, and our call centre is operating at full capacity."

Both Mr Foote and Ms Armstrong agreed that the real race between the energy retailers like TransAlta, Contact, Genesis and Trustpower was not the actual base price to customers but the added services each provided.