Switched on

By Siàƒ¢n Green

No matter how much money they can save, many domestic electricity consumers think that switching suppliers is more trouble than it’s worth. So for the lazy consumer there is now interactive TV – all they need do is press a button on their remote control and the switch is started.

With interactive TV, it takes little effort to switch ࢀ¦
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Capturing new customers in a competitive retail market is one of the toughest challenges utilities face. Much time and energy is put into growing market share, but with competition fierce and margins tight, the payback is often poor.

Utilities the world over use tried and tested methods – door-to-door sales, telemarketing, direct marketing, advertising and more – to promote their products and convince consumers that they could save money by switching supplier. Yet the psychology of consumers – especially in the domestic sector – is complex, and many will easily find an excuse to avoid making the switch.

So utility companies, especially in the USA and Europe where competition in retail markets is high, have become quite innovative in their marketing and comprehensive in their understanding of consumers. The need to stand out from their competitors and hook the consumer has seen utilities make tie-in deals with supermarkets, motoring organizations and financial products, and allow customers to interact fully with their supplier on-line.

Getting the message across: ScottishPower’s interactive advert boosted switching rates by around 200 per cent
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But the onus is often on the consumer to pick up the telephone or log on to a website to make the switch. What if all they had to do was reach out for the television remote control, press a button, and wait for the telephone to ring…

It may sound like a consumer’s dream, but it became reality in the UK this year when ScottishPower launched its interactive television advertising campaign – the first of its kind by a UK energy company. By simply pressing the red ‘interactive’ button on their remote control during ScottishPower’s interactive television advert, viewers could register their interest in switching their gas and electricity supplies to ScottishPower, and wait for the company to call back.

A new platform

Unlike most energy utilities in the UK, ScottishPower is not new to digital television and its use as a medium to capture new customers. The company has for some time had a presence on Sky Active – a shopping and information platform available to customers of Sky, the UK’s largest digital television service provider.

Chris Salveta, ScottishPower’s e-business marketing manager, explains: “We have been involved with Sky Active for a couple of years now. We have a microsite within Sky Active where people can get a quote to see how much they can save by switching to ScottishPower, and if they want to switch then there is a call-back request which sends their details to us so we can call them back.”

The ‘microsite’ on Sky Active has been fairly successful for ScottishPower in terms of capturing new customers. Although ScottishPower cannot measure the total number of ‘hits’ that its microsite receives, it can obviously keep track of how many call back requests are made at the site. According to Salveta, the site generates around 1000 call back requests per month, and about 40 per cent of these are converted into new customers.

“We have a very good conversion rate of between 40 and 50 per cent,” says Salveta. “That’s because when people request a call back, they have already done a quote and have seen how much they can save, and because our activity on Sky Active is incentivised … we offer what is called TV Link, a device which is plugged into the Sky box and allows the viewer to watch Sky in other rooms of their house.”

ScottishPower therefore wanted to find a way of maximizing traffic to the microsite. An interactive television advert seemed the logical answer. “We wanted to look at new ways to maximize the amount of people coming through that channel,” says Salveta. “Most of the activity we had done in the past was focussing on promoting it within Sky Active, but then you rely on Sky viewers going into the Sky Active platform and choosing to visit our microsite … we were limiting ourselves.”

The focus behind the advertising campaign was therefore to drive more people to the microsite. An interactive television advert was key to this, but was also supported by marketing in Sky’s customer magazine and banners on the Sky Active platform. “The campaign also generated a lot of positive interest which also drove people to the site,” notes Salveta.

Switching on

The television advert in itself was ground-breaking for ScottishPower as it was the first time that the company had used digital animation in an interactive television advert. The 30-second commercial was broadcast on Sky’s prime channels, including Sky Sports, Sky Movies and Sky One, for a six week period over February and March 2002.

The key message of the advert was that if the consumer switched to ScottishPower for their electricity and gas supplies, they would receive a free TV Link.

“We were using the digital characters to try and convey what the offer was – the fact that you can watch Sky from a second room in the house [with the TV Link],” says Salveta. “The advert consists of two characters sitting on a couch watching TV; the wife says to the husband, ‘Put the kettle on’, and instead of him leaving the room, his arm stretches all the way into the kitchen .. it was quite quirky!”

As the advert was aired, a red button icon was displayed in the top corner of the screen to indicate to viewers that the advert is interactive. If the viewer then pressed the red interactive button on their remote control, they were taken straight to a landing page in ScottishPower’s microsite that contained full details of the offer. If they wanted to take up the offer, they pressed the yellow button on their remote control. This brought up a screen containing all their details – name, address, telephone number and so on (which is stored on the Sky box) – and these details were then sent straight to ScottishPower.

The contact details of interested viewers are sent by Sky to ScottishPower’s automated telephone dialler system in a batch file on a daily basis. The utility’s sales staff are therefore able to make the call back and hopefully close the deal.

ScottishPower e-business director Stuart Laing said: “It is the first time an energy supplier [in the UK] has used interactive TV advertising in this way, a very different medium from the normal passive television commercials. The interactive element ensures that the effectiveness of the promotion can be instantly measured and evaluated.”

ScottishPower has found that the digital television environment differs from the now-familiar on-line environment
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Reaching Sky’s 5.7 million consumers across the UK, the campaign had a definite impact on switching rates. Over the six-week campaign period, switching rates increased by something like 200 per cent, says Salveta. Switching rates fell after the campaign finished, but remain higher than the previous baseline before the campaign started.

Sit up and watch

Once ScottishPower had made the decision to go ahead with the interactive advertising campaign, it had just a few weeks to carry out all the development work for the TV adverts as well as the supporting marketing pieces. The advertisement was developed by advertising agency Black ID in conjunction with the Digital Animation Group.

The deadlines were tight, explains Salveta: “It took us three weeks to put everything together, and the deadlines were very, very tight. It only took three weeks to build the TV advert, and that’s very quick for a digital animation.”

Sky is responsible for making any changes to content on ScottishPower’s microsite. For the interactive television advert, the company implemented the functionality and code that took consumers straight from the viewing screen to the ScottishPower microsite.

The innovative campaign has generated a huge amount of interest, says Salveta. Its success means that other utility companies around the world are likely to sit up and watch the development of digital television and interactive advertising. ScottishPower, meanwhile, is considering whether to carry out another interactive campaign,

At the moment, interactive advertising may not be the most cost-effective means of capturing new customers, but ScottishPower is keen to be an early adopter of this new technology. And, says Salveta, the revenue generated by the campaign covered its costs.

“If you look at the web ten or 15 years ago, there was a high cost involved there in any marketing activity,” says Salveta. “And there’s a high cost involved with interactive TV at the moment, but that will probably change in the future. It’s a new channel and consumers aren’t fully switched on to using that channel yet. We’re benefiting from the experience now, so in the future it should be a lot more cost-effective.”