Executive Success: Shifting focus to customers

It's day one at Meridian Energy's new offices in the freshly built Quad 5 building at Auckland Airport, and staff are celebrating with cake.

For Meridian's general manager of retail, Alan McCauley, 55, the move from a warehouse in Mt Wellington marks the beginning of a fresh assault on the Auckland market.

The electricity giant, which is New Zealand's biggest generator, has built a brand around "twirly things", he says, focusing on the dams and windfarms it uses for generation.

"It's trying to turn that around and say, 'Well, what does that mean to customers?' It's turning the brand away from being an asset-focused brand towards being a customer-focused brand and we're on that journey." Celebrity frontman Jeremy Wells is coming down off the mountain and into the home, pushing the idea that Meridian doesn't just make electricity but also sells it.

McCauley says Meridian's retail brand, which he admits is "pretty non-existent in Auckland", is being revitalised around messages of sustainability, good customer service and fair prices.

"We're not going to be the cheapest in the market; we don't want to be. We actually want to add value to our customers."

Adding value ranges from energy audits for business customers through to tie-ups with complimentary brands - Ecostore has been a longstanding partner - for home users. He says it's critical that customers appreciate the added extras rather than just the commodity product. "If you look at the market at the moment it's all about discounting."

McCauley says it's an approach that isn't sustainable, taking five to six years to recover the customer acquisition costs. "With the churn in this market [energy retailers] won't recover it. We don't want to be in that game."

Technology will be a feature of the Meridian retail model, borrowing from the IT smarts of Meridian's subsidiary brand Powershop.

McCauley doesn't have any role in running Powershop in New Zealand, but his first job when he came on board at Meridian nearly two years ago was sorting out Powershop's launch in Australia.

"They had the ideas but when I walked in there they wanted to analyse things to death. At some point you can do all the analysis but you've actually got to do the doing and I guess I'm a doing sort of person."

Before joining Meridian, McCauley spent 10 years building Red Energy from the ground up in Victoria as a way for its then New Zealand parent Contact to create a retail customer base for its Australian generation assets.

It was the start of a decade of McCauley commuting from his Kapiti Coast home to work in Australia.

"What I learned from that whole experience was if you're starting a business like that you need to embed yourself in the whole culture."

Red Energy also had a strong vision of where it wanted to be, setting goals to have 400,000 customers and be the No4 retailer in Australia -- something that seemed ambitious in 2004 when it leased 2000sq m of office space to hold just 15 people.

He left when Red hit 400,000 customers -- the company has since reached No4 after buying another energy retailer -- to take on what he sees as a transformational role at Meridian. Compared to the lean, mean challenger environment he'd come from, McCauley says Meridian had a mentality of buying the best of breed systems but never implementing them properly. "A lot of the focus is making our systems work like they're supposed to, getting the systems to talk to each other and then driving efficiencies through that to the front line."

During "12 months of pain" his management line-up came under scrutiny, with only one person remaining from the original team.

McCauley is implementing customer service and digitised operating models he's seen in other industries, particularly telecommunications and banking, because the electricity industry is still stuck in the 20th century, he says.

McCauley reflects on how a kid from Porirua is now heading up Meridian's retail arm. "Going from that environment to the role I'm in now and achieving what I've achieved in Melbourne to me is: you can do anything if you put your mind to it. "It doesn't matter where you start."