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2009 Prague Energy Meeting

Eneco Retail 2009 v0.9

The Netherlands

Marketing RetailJorg VerweijManager Marketing & Sales

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Contents

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Eneco Company Profile

Market analysis & the effect of the crisis

Ways to optimize sales channels

Creating different propositions and channels

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1 Company profile• About Eneco

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Eneco stands for energy continuity in a sustainable

manner

Two million customers, >20% Market share

Eneco Company ProfileReliable, entrepreneurial, professional

Greenpeace states: Eneco thecleanest energy company in NL

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2 • Market Developments• Impact of crisis

Market Analysis

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Market trends/ facts in the Netherlands

• Growing number of customers switch.

• Market churn in 2009 10% -15%. • But Dutch Government claims switch intentation goes down!

1.Switches increase ! 2.intention goes down

Push channels under pressure

• Existing push channels are more regulated, release call me not register oktober 2009 ->protect themselves

• High cancellation rates in cooling period

Push market• Switching is in approximately 70% of cases “forced” • Large numbers of acquisition means less “customer quality” at a

higher price

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4Media

spendings are increasing

• Media attention, competitors rising budgets (2009 expenditure, 200% higher as in 2008!)

Acquisition power ‘green’

is marginal5• Acquisition sustainibility in mind customer limited• Customers are environmentally conscious, • but don’t want to act or pay.• Price perception is primary reason for switching

The result of the above

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........................................................................the consumer

THE CONSUMERThe dutch consumer is annoyed

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• Energy providers call in chorus that they are the cheapest, is this so?

• This market approach is growing distrust of suppliers.• Name recognition, service and distinctive crucial for recruitment ambitions

Competitive irrelevance

Is this because energy is a commodity?

Or

is this caused by the way we all approach the market?

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Market trends/ facts in the Netherlands

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… differentation is tough but crucial

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Typical supplier (not good not bad)

Low High

Market average

Zone of competitiveirrelevance

Value Curve

The consumer doesn’t see the difference

“Ideal”ValueCurve we

have a winner!

!

- Price- environment- Complaints- Betrouwbaarheid- safety- Speed- Brand- expertise- appearance- Knowledgeable- empatie- etc

Zone of competitiveirrelevance

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… differentation is tough but crucial

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Impact of economic crisis to the overall energy market…

Increase Price sensitivity with regard to big spendingsThis increases switching intention

• Investment in energy decrease are being postponed ( new solar power, CV kettle)•Instead of buying a house they buy a new tv set!•Increase in bad debt

Description of trendsDescription of trends

•Total energy consumption has decreased by 5%. Mainly through a decrease in industry production•No changing consumer behaviour related to consumption

Customers are increasingly aware of their spending. • A financial crisis is a typical period when consumers re-evaluate their regular

buying process. Their preferences change.

•Due to decrease demand the overall oil price went down the first part of 2009, results in consumer price decrease of 25%

Drop of oil prices

Decrease in energy

consumption

Increased awareness

Increased price sensitivity

Postpone large spendings

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………

3 • Ways to optimize sales channels

Sales channels

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The basic principles remain KEY1 + 1 = 3

Nett Result

•Conversion• Gross Margin

• Profit

Brand Preference

• Branding, Share of Voice• Differentiation

• Image• Sponsoring

• Partnerships

Marketing & Sales Effectiveness

• Listen to customers and market trends

• Effective use of spend• Efficient sales channels• Operational excellence

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PullPull

PushPushOutboundOutbound

Promo Teams

Promo Teams

Direct Mail

Direct Mail

D2DD2D

OnlineOnline

InboundInbound

Sales

Sales Channel improvements have been identified - through-the-line campaigns are key

• Improve quality of records• Training staff• Campaign information

• New web site• Dedicated marketing team• Improve funnels – improve experience

Joint Promotions

Joint Promotions

• Improve quality of records• Training staff• Campaign information

• Clothing• Commissions• Efficient routing

• Based on leads• Benchmark• Dedicated channel manager

• Local presence - visibility• Event marketing• Supporting overall campaign

• Partnering with large companies• Retailers, banks etc• Leverageing strong image Eneco

OnlineOnline

InboundInbound

Direct Mail

Direct Mail

OnlineOnline

InboundInbound

D2DD2D

Direct Mail

Direct Mail

OnlineOnline

InboundInbound

OutboundOutbound

D2DD2D

Direct Mail

Direct Mail

OnlineOnline

InboundInbound

OutboundOutbound

D2DD2D

Direct Mail

Direct Mail

OnlineOnline

InboundInbound

Promo Teams

Promo Teams

D2DD2D

Direct Mail

Direct Mail

OnlineOnline

InboundInbound

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Eneco is optimizing the entire sales/ proposition funnel (examples)

Target Attract Convert Retain

1) Warm campaign through leads/ endorsement

2) Target segmented response (L A L )

3) Combined customer databases

4) Event Marketing (new construction)

5) Combine channels & tactics

6) Manage on marketing costs per channel/ product/ combination

1) Awareness & consideration: review current position Eneco

2) Life Time Value

3) Cost per Order deals

4) Propositions based on customer insights

5) Use of sponsoring

6) Combine total portfolio in offering

1) Decrease drop-out by keeping promise and improve data quality

2) Combine sales channels in offering 3) Measure channel performance

4) Measure individual sales agent performance

5) Improve online funnels

6) Convince doubting potential ( I doubt brochure)

1) Actively reduce churn

2) Comparison of churn levels with benchmarks

3) Immediate win-back attempt

4) Save desk

5) Churn prediction

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Lose Switch – Eneco is reliable

Case Insights Process improvements• Former Eneco

customers, recently switched

• >70% Pushed

• price perception (price advantage?)

• Right thing?• mistakes during switch

• On the ball (shorter on switch moment)

• Increased data quality• Agent incentives• Measure results

Proposition Results• Reliable, we know each

other longer than today• We fix the switch for

you• Off course we match

the price!

• ….of the former customers we reach by phone 50% becomes Eneco again

• Especially high return on new entrants

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Proposition example: Welcome back

Case Insights Process improvements• Former Eneco

customers, that switched a year ago

• Switched for offer (mostly price)

• Disappointed about new energy supplier

• They want to switch back

• They still recall us• They still think

positive about us

• Direct mail:– First Letter– 1st reminder– 2nd reminder (to those we can’t

call)• TM:

– 1 week after the 2nd reminder– TM shorter on first reminder– Strengthening of feeling

through postcard

Proposition Results• We didn’t forget you!• We want you back!• That’s why we have this

special offer for you.

• Latest results Q2 2009 (response):

> 10% response

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Proposition example: Welcome Back

Case Insights Process improvements• Former Eneco

customers, that switched a year ago

• >70% pushed

• Switched on Price perception

• Disappointed about new energy supplier

• Want to switch back, but don’t take action

• Still recall us• Still think positive

about us

• Direct mail– First letter– 1st reminder– 2nd reminder (to those we can’t

call)• TM

– 1week after 2nd reminder– TM shorter on 1st reminder– Strengthening feeling trough

postcard with mailpack

Proposition Results• We didn’t forget you!• We want you back!• That’s why we have this

special offer for you.

• …latest results Q2 2009

• >10% response• Check your data

selection!

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Proposition example: Optimizing Push

Case Insights Process improvements• Decreasing

name recognition

• Decreasing conversion

• Support sales channels

• Distrust the energy companies, switching proces

• Switching intention is still there

• Price and reliability

• Trough the line support• Magazine send to 1,1 milion

households, with general market information and offer, send in small batches

• D2D; immediate follow up in areas where the magazines are distributed

• Efficient routing (look a likes)• Dedicated Channel Manager• TM:

– 1 week after the magazine

Impact

• Improvement cancellations by 25%• Cost of Sale dropped 18%• TM doubled conversion• D2D slightly higher• Inbound sales!

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Proposition example: Change to wind power and get a free bicycle

Information Improvement/details Impact

• Endorsement: 4 times olympic gold medal winner•Pull trough ATL & Online

• Combination of Brand & green product• Evidence for Sponsoring “Eneco tour” & New bike- ATL & BTL through the line- High Margin Product

• New and existing customers!• Running as we speak

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Eneco Maintenance Suppliers; combined databases!

Case Insights Process

improvements• Customers of

Tempus and GSU (maintenance

• “I’d like to be serviced by one supplier for all my energy related products and services”

• Direct mail:– Tailormade

proposition for different customers

– Followed by a reminder

• TM:– 1 week after the

reminder– TM shorter on first

reminder

Proposition Results• “One stop

shopping for energy and related services!”

• Latest results Q2 2009 (response): > 5% response

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Proposition example : Electronics retailer BCC

Improvement

• No learning yet, start October 1st.

Impact

• No learning yet, start October 1st,

• Target at least 1000 new customers • Increase brand preference (positive brand association)

Case

• A-brand electronics retailer • Ordering in retail channel• retailer endorses Eneco as ‘Green’• Offer: discounts up to 25% on all energy saving electronics• Full blown ATL and BTL campaign (print, TV, shopfloor, internet)•Action period 3 months•Sales incentive program on floor

Start October 1st

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Partnership BCC en EnecoHoe gaan we dit communiceren?

Tag-on TV

•12 t/m 31 oktober

•(Optioneel)

BCC H-A-H blad/folder:

•Folder: week 42, 43 en 45

•Magazine: week 44 redactioneel stuk

•Week 42: actieflyer

Vermelding op eneco.nl

•Gedurende de gehele actieperiode

•Verwijzing winkelvloer

Vermelding op

groenestekker.nl:

•Gedurende de gehele actieperiode

•Verwijzing winkelvloer

Winkelvloer:

•Posters A0/A1

•Placemats

•FAQ’s

•Inlogpagina: www.eneco.nl/bcc

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Homepage takeover

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Ebay/Marktplaats

Case Insights Process improvements• Targeted

campaign in non-eneco area’s (zipp code) with exclusive eBay offer

• Multichannel approach most succesful (email, home page takeover, retargetting, nabellen clicks)

• Call me back- follow up TM high potential

• Single shot EM poor

• Follow up TM should be implemented permenantly

• Reminder EM’s necessary for success

Proposition Results• Save eur

300,- per year• High Impact, visibility

campaign– Impressions 11mln– Average CTR 0.66%– Call me back banner

CTR 3.44% • Positive impact on price

perception!

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Retargetting

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Expandable leaderboard

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Call-me-back

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Proposition Example: ASN Bank

Improvement

•Customer base of bank is small (500k)•Acquisition via telephone marketing on customer base bank

Impact

• Increased loyalty by confirming sustainability (on brand)• High conversion• Low Cost of Sale

Case: partnering with bank

•Dedicated Dutch Bank•Focused on sustainability•During the banking crisis•Offer: wind energy/ecogas and membership Zeekracht + save box

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We want to do this!

Instead of acting like this…

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3 • Creating different propositions and channels to acquire new customers

Propositions

EIB, WELKOM TERUGFIETSEN

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bijlage

We want to do this!We want to act like this!

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1.Escape the commodity trap,

differentiate!

2.Endorsement, leads, fact based

marketing

3.Execute well

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Eneco strategy: truly focused towards customer partnership

Leads to price fight, decreasing margins etcTraditional,

one way utility companyTraditional,

one way utility company

Differentiator through open relation ship with

customer---> Customer becomes

energy supplier and invests in green energy

Differentiator through open relation ship with

customer---> Customer becomes

energy supplier and invests in green energy

Moment of directional change

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More and more people are willing to switch, different insights

Switch aversie blijft

Market trendsMarket trends Implicaties voor EnecoImplicaties voor Eneco

15% van de markt 85% van de markt

innovatorsEarly adopters/ early majority late majority laggards

Early adopters tot early majority, insights might chance

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Eneco is optimizing the entire sales funnel

Target Attract Convert Retain

Action Effects• Warm campaign through leads and

endorsementGives up to 12 times higher conversion

than ‘cold calling

• Continuous reviews of campaigns; target segmented response (look-a-likes)

Gives up to 2 times higher response

• Combined customer database and combine total portfolio offering (energy product and kettle lease)

Gives up to 10 times higher response

• Event marketing (new construction, moving, use of sponsorship) gives up to

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• Leads can be expensive, conversion is king (focus on total cost of sale

?

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Eneco is optimizing the entire sales funnelTarget Attract Convert Retain

Action Effects• Decrease drop out by keeping promises and raising data

qualityIncreases conversion

by 30%• Support sales channels with trough the line or local support

(insert / invliegen Huis aan Huis folder)?

• combine channels in offering (e.g email and telemarketing) ?

• Dedicated Channels Managers result in increase in conversion

– optimize sales scripts – measure channel performance – review individual sales agent performance

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• Finish “unfinished weborders ?

• Create own leads database (Build your prospects history!) ?

• Convince Doubters (I doubt Brochure) ?• Immediate win-back attempt, keeps up to 30% happy

customers?

• Improve online funnels ?