By Karyn Scherer
Who cared what the power company was called - it was a bill to be paid. Now there's a competing array of unfamiliar names vying for customers.
In the old days, most us flicked on our light switches without even thinking about where the power came from.
We had no
choice about who we bought our power from, and we took it for granted that the same company was responsible for ensuring the power stayed on.
Times have finally changed.
When Max Bradford, the minister responsible for energy, made good on his threat last year to force power companies to choose to be in either the network or retail business, he prompted a flurry of activity up and down the country.
As a result, many customers now enjoy lower prices. But advertising agencies and media companies have also benefited from the $20 million or so estimated to have been spent until now on communicating the changes to the public.
The changes have thrust a raft of new names in the public's face, including Genesis, Orion, United Networks, Contact and First Electric.
However, it is no wonder many customers are still thoroughly confused. When gas company Enerco, for example, sold its retail arm to Wellington-based TransAlta late last year, its network business was renamed Quest. It is now likely to change to Orion, following a take-over bid.
Although many network companies have had to rethink their marketing, their tasks dwarf in comparison to the challenge that has befallen the new retail companies.
One of the highest-profile campaigns so far has come from a Government-owned organisation, First Electric. According to spokesman Mark Thomas, the October launch took more than a year to plan.
Industry insiders estimate First Electric has so far spent more than $7 million targeting customers in Auckland, Hamilton, Rotorua, Tauranga, Wellington and Christchurch.
Its campaign has included television and print advertising, a direct mail drop to 300,000 households, outbound telemarketing, a roadshow, and paid radio interviews.
Thomas won't confirm the budget. "I think we were pretty pleased with what we spent. It wasn't excessive at all, but obviously when you're running a national campaign you're talking about a reasonable amount."
First Electric claims to have signed up 21,000 customers so far, although some in the industry are sceptical.
Thomas notes First Electric faced an "absolute war" from existing companies such as Southpower and TrustPower, and is proud of research which showed the brand had 80 per cent awareness at the end of week two.
"We didn't expect to get that kind of penetration so soon, particularly given that Contact Energy launched its retail brand four weeks before us."
Contact is also Government-owned, although it is expected to be privatised by mid-year. First Electric is believed to have been more successful in Wellington, while Contact was more successful in Auckland.
The Auckland launch, which kicked off in September, was handled by Raynish & Partners and focused on an offer of free power for the month of December. Both television and print were used heavily.
Contact's sales and marketing manager, Graeme Sumner, admits the company "slightly changed tack" in Wellington.
"There were so many retail businesses for sale at the time, we felt we had to hold off until we knew what the landscape looked like."
Sumner won't say how many customers Contact has wooed so far. He says he was "reasonably satisfied" with the launch, but admits the organisation was probably disadvantaged because it was the first to introduce the idea of competition in the residential market.
"I remember talking to groups of people in Auckland at the time and really having to clear up a lot of misconceptions about what their relationship might be with Power New Zealand or Mercury if they were to join Contact.
"There's still a lot of confusion out there as to the relationship between energy and line companies." From the Government's perspective, Contact fulfilled another important role - its launch seemed to shake up an industry which, until then, had been lethargic about competing for customers.
It remains to be seen, however, how grateful taxpayers will be for its efforts, particularly since a question-mark remains over the Contact and First Electric brands.
On April 1 First Electric will be officially handed over to one of the baby ECNZs, now known simply as Waikato SOE Ltd. The same organisation has also bought Mercury Energy's retail business, and speculation is rife as to how long the two brands will last.
Chief executive Doug Heffernan insists decisions have to yet to be made on the issue. But sensible marketing practice points to several reasons they might well be retained.
The first is simply the fact that the state-owned enterprise has paid good money for the brands.
And indeed, the Mercury brand has proven to be incredibly robust. Despite the disastrous publicity of last year's power crisis, it appears to have lost no more than 5 per cent of its customers to rival companies.
Customer inertia might also be a compelling reason to keep the name.
Many Mercury customers probably do not realise they now pay their bills directly to ECNZ, and a change of name could well prompt many of them to look more closely at their options.
Canadian-owned TransAlta has a similar dilemma. As a result of the latest reshuffle, it has customers in three different regions under three brands: Power New Zealand, Trans-Alta and Southpower.
Its communications manager, Nigel Morris, says the company is not planning any changes in the short-term. He is cautious on the subject of what might happen in the long-term.
"We only just completed the deals just before Christmas so it would be premature to comment on how long those brands will last and exactly the form that they might end up in."
Nevertheless, he notes, there is a "huge advantage" in retaining a local identity.
"Electricity is different from a normal product because people assume it's going to be there all the time. When it's not, for various reasons, you need that local contact and knowledge."
* Karyn Scherer has taken over the advertising/marketing column for 1999. She can be contacted at Karyn_Scherer@herald. co.nz
By Karyn Scherer
Who cared what the power company was called - it was a bill to be paid. Now there's a competing array of unfamiliar names vying for customers.
In the old days, most us flicked on our light switches without even thinking about where the power came from.
We had no
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