"INDUSTRY FOCUS MARKETING GETTING THE MES Traditional marketing strategies are"
INDUSTRY FOCUS MARKETING GETTING THE MES Traditional marketing strategies are undergoing a root and branch rethink. Report by AMANDA LING, director of Data Intelligence, Response One Group T he recent liberalisation of the methods. While utilities marketers are still to the all too easy assumption that if more utilities market and consequent reaping rewards from their use of traditional consumers are transacting online, then the growth in competition has media such as TV, the general mood is one web must be the best environment to since generated an aggressive of transition: increasing media fragmentation target them within. On these grounds many advertising and marketing scenario. With has rightly been met with the formulation of marketers are preparing to make a almost one in five UK consumers (17%) strategies of channel alignment. fundamental shift from offline to online defecting from their utilities provider, it is The 100% increase in 2007 in the advertising media. To shed some light on easy to see that aggressive acquisition has number of accounts managed online is a the matter Response One commissioned quickly become the norm. paradigm of channel development: it is research into the relative effectiveness of Current hype and the rapidity with which currently estimated that there are currently different advertising media for inspiring communication tools and channels have 2.5m existing online accounts with the six consumers to visit a utility provider’s changed over the past decade have had an biggest providers.1 This impressive boom website and make a committed enormous impact on traditional marketing has led numerous marketers in the sector consideration to purchase a service. REFERENCE OFGEM 70 energy-profile.com ENERGY PROFILE UTILITIES SSAGE PICTURE CAPTION The received wisdom of effective media driving sales both to existing customers and new prospects has been greatly complicated by the role of the internet Although it would not be unreasonable to consideration than average) require further While on the one hand consumers are presume that web visits and purchases are development in personalisation to reach happy to receive communications from best inspired by some sort of web or email similar appreciation levels. Understandably, providers they already have a relationship advertising, statistics to prove that this since existing suppliers are the firms with, it is important to acknowledge that really is the best option have yet to be consumers have already chosen to do those prospective clients have also willingly collected. Response One commissioned business with, communications from them chosen to opt-in to receiving research into the most effective media at that are appropriate will not be unwelcome. communications, hence they cannot be driving web visits and purchase How UK consumers spend their time totally averse to the receipt of relevant consideration and found that while online and what kind of contact is offers from providers they do not already customer emails are highly effective, perceived as an intrusion when immersed have a relationship with. topping the list at 52%, their ‘cold’ in the web environment impact Interestingly the channels that UK equivalent, prospect e-mails (31% less appreciation levels greatly but are as yet consumers indicated as very effective at likely to drive online sales or purchase murky waters. driving online sales were among the least 2008 issue one 71 INDUSTRY FOCUS MARKETING Customer email 52 TV/newspaper advert 34 Targeted/personalised direct mail 16 Sponsored search engine link 8 Advert on/with a bill or statement/third part inserts 8 Loose insert – magazine 0 Mobile text – customer -3 Untargeted DM -21 Social networking advert -26 Unsolicited email -31 Mobile text – unsolicited -38 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 Index (average = 0) INTERESTINGLY THE CHANNELS THAT UK CONSUMERS INDICATED AS VERY EFFECTIVE AT DRIVING ONLINE SALES WERE AMONG THE LEAST INTRUSIVE OF ALL intrusive of all, the ones we believe they have built up the most indifference to: television/newspaper display advertising (32% above average) and direct mail – coming in at 16% more effective at encouraging web response and purchase than average. Generally it seems that for mass market targeting the continued use of traditional above-the-line advertising techniques offering a prominent landing page may still prove a successful strategy. Direct mail, however, is a very profitable alternative as it allows an organisation to fully segment its total audience and target more efficiently whilst reducing waste. The same can of course be said of email, which benefits from the perception of being a ‘green’ option, and with a similar focus on targeting, even in prospecting activity, can deliver messages that are finely tuned to individual consumer sensibilities. Of course untargeted and intrusive marketing techniques whether carried out by email or mobile phone are always unlikely to elicit a positive response from consumers. Poor performance on the targeting of prospect email is largely due to the misuse of unsolicited email to date. Utilities need to work with specialists in the field to provide better targeted cold email messaging and achieve consumer satisfaction and better response rates. Harnessing the information contained within commercially available lists, of prospects that have declared they are open to receipt of offers from third parties, to create communications that are more 72 energy-profile.com ENERGY PROFILE UTILITIES relevant is the only viable option available to Consumers are pleased to receive emails help to curb the ‘spam’ image of cold email. from the organisations they already have Social networking sites advertising is contact with, particularly so as an element another online advertising phenomenon of relevance and time-sensitivity is likely to currently sending media and marketing have been taken into account. There is commentators into a frenzy of excitement. no reason to presume that if the same level UK consumers however, are not as of personalisation and expertise are impressed. They felt that such advertising, employed in prospect mailings, levels of far from being effective in driving web visits interest and responsiveness may rise and transactions, was as unappealing (at considerably. Currently, however, for 26% below average) as unsolicited email discovering new suppliers, TV and (31% below average). Predictably the 18- newspaper advertising, and targeted 24-year-old age group are a major direct mail remain the most inspiring exception to this observation and rated medium according to British consumers. social network adverts and customer Sponsored search engine links and adverts mobile texts both on 22% above average enclosed with bills and statements also are for encouraging web visits and purchase suitably successful options in driving consideration. Even though it is likely consumers to visit a website and consider that the habits of this age group will a purchase through that website. perpetuate into their forties and fifties, the Any hasty assumption that consumers in marketing industry cannot afford to channel general favour online advertising as the current resource on such a cash-poor lead into visiting a company’s website is, audience today. finally, largely inaccurate. Utilities marketers An interesting result for the industry need to continue leveraging a combination relates to transpromotional advertising, the of direct mail, above-the-line advertising, practice of accompanying someone’s bill or email and sponsored links to entice new statement with inserts from an affinity customers, as well as using existing partner. This cost-effective advertising communications such as bills and medium is considered just as effective (8% statements. The key to making these above the average) as sponsored search channels work is by understanding what engine links at inspiring company web works for the individual customer or page visits and purchase consideration. prospect, ie, what their preferences Pitney Bowes Group 1 Software research are. This can be achieved by analysing in 2007 found in fact that people spend the data on the customer/prospect and more time looking at their statements than using the insight to create relevant they do their tax correspondence, communications. ep highlighting that a niche in customer ABOUT THE AUTHOR Amanda Ling holds a key attention and physical space are available About Response One role on Response One’s executive board, and waiting to be successfully monetised. The Response One Group is a new breed of overseeing the Data Intelligence, Direct Solutions As the utilities industry is bound by law to data solution providers with a unique and strategic marketing. She constantly evaluates issue a certain amount of regulatory integrated full service offering including: list their propositions to ensure that they continue to communication such as bills and statements and media planning, data intelligence, direct offer market-leading services that meet and exceed the evolving needs of their clients in the areas of it is the industry most likely to benefit from solutions and media sales. Our premise is Database Management, Analysis, Reporting, Data this finding. Monetising this space with simple really; excellence in all data Management and Print & Production. With over a relevant third party advertising can help disciplines balanced with a passion for what decade of specialist experience in marketing and increase revenues. Many utilities have we do and an almost unhealthy dedication sales, Amanda honed her skills with market leading delved into ‘brand stretch’ in the past few not just to get the job done but to take our organisations including RAC, Mail Marketing and years and developed a range of products clients further. Our knowledge, expertise EHS Brann. During her time as client services director at The Database Group, she successfully and services grouped under the trusted and our people set us apart from any other revitalised their marketing activities and pioneered brand ‘umbrella’ that can be successfully data solutions specialist. We consistently the kind of sophisticated, innovative and successful and inexpensively introduced to customers deliver on our promise: to maximise the initiatives one normally associates with much via this ‘piggy-back’ marketing. potential of your marketing. larger businesses CONTACT DETAILS Amanda Ling, Director of Data Intelligence, Response One, The Old Dairy, Melcombe Road, Bath BA2 3LR | +44 (0)1225 480480 | email@example.com | www.responseone.co.uk 2008 issue one 73