© Bord Gáis Energy

CCMA Network Forum

“The Big Switch”

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Overview of Residential Electricity Market

Presenter : John Beirne – Electricity Marketing Manager, Bord Gáis Energy

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The Residential Electricity MarketRegulatory position

• Deregulation of the electricity market in Ireland began in 2000 with the residential market opening to competition in July 2007. This was driven by EU competition directive.

• Deregulation meant inevitable loss of gas customers leaving Bord Gáis Energy with a choice between managing a decline or expanding into new markets.

• ESB electricity prices are regulated by the Commissioner for Energy Regulation (CER). The CER also regulate Bord Gáis Energy gas prices.

• This allows challengers to discount off the ESB price.

• Generation is still dominated by ESB but there are now numerous independent generators, soon to be joined by ourselves

• Transmission and meter reading are carried out by ESB Networks

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Airtricity – The challengerESB – The incumbent

The Residential electricity marketCompetitive landscape

The residential electricity market consists of just under two million customers two thirds of which are classified as urban and one third rural

• ESB Customer Supply is the state owned incumbent formed in 1927

• Regulated prices• ESB Customer Supply is an

effective company providing excellent billing and customer service. They have recently focussed on retention activities such as energy advice, paperless billing and enhancing communication to older customers

• Airtricity had recently been acquired by Scottish and Southern Electricity (SSE) a strong competitor in the UK market

• Airtricity’s brand positioning is solidly ‘Green’, this is derived from their wind generation heritage

• Airtricity are now offering discounts of 5% to 13% on residential electricity and are to entered the market in a significant manner from May 2009

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Overview of Bord Gáis Energy

• Bord Gáis Energy is the retail arm of Bord Gáis and was the incumbent monopoly natural gas supplier in Ireland.

• There are over 600,000 natural gas customers in Ireland ranging from large industrials to residential homes

• We have been selling electricity in the business market since 2001

• Bord Gáis Energy already had a strong presence in the commercial electricity market in 2009 with over 14,400 I/C and SME customers

• We were now entering the residential electricity market on a full scale basis with a target of 60,000 residential customers in year one

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Project Switch Scope and Key Objectives

Presenter : John Beirne – Electricity Marketing Manager, Bord Gáis Energy

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Project Switch

• The project kicked off in March 2007

• The early activity involved assessing the market and the size of the opportunity.

• The received knowledge was that educating the market would be a big challenge given that the market had never been open before and the international experience was that initial switching was slow. (Ref British Gas only went below 50% share after 10 years of intense competition).

• Conservative targets where therefore set for year 1.

• Sales channels also had to be determined, there were many ideas (20+) but ultimately choices had to be made and it was determined that we would launch with website and inbound response channels which were to be followed up with field sales and outbound in the first few months.

Bord Gáis Energy

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Project Switch

• As the market was new we also had the opportunity to set the language of the offer.

• We looked at around 8 different potential offers such as percentage discounts, money upfront, energy saving packages, fixed prices, price guarantees etc

• Percentage discount won out as being understandable and scalable to the customers consumption.

• A minimum 10% also won out as achieving the best value for money for us when considering customers gained versus discount given.

Bord Gáis Energy

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The Big SwitchMarketing Activities

Presented : John Beirne – Electricity Marketing Manager, Bord Gáis Energy

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Outdoor tease and reveal

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Sample Metropole Placement

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Outdoor Specials

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Outdoor Building Hangings

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Outdoor Building Hangings

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Television

• TV led campaign to achieve high levels of awareness of Bord Gáis Energy entry to residential electricity market

• 30 second direct response TV ad

• Based on creative concept of The Big Switch

• Features Lucy Kennedy as presenter

• Aim to achieve stand out and get core messages across

• TV stations: RTE1, RTE2, TV3, TG4, Sky, E4, Paramount, Channel 6, Living, MTV & Setanta Sports

• Play TV ad

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Television

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Radio

• 2 radio ads for launch - 40 seconds

• Themes reflect research insights

• Lucy Kennedy voice over and music to mirror TV ad

• 4 national stations and 22 local stations

• Launch with other media

• Remember

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Press

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Press

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Press

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Online

• Mixture of different site types to reach target customers

• Broad reach sites

• News sites

• Property sites

• Regional

• Consumer Information sites

• Google AdWords campaign

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thebigswitch.ie

• Website specifically designed for take on of customers by web

• Key information in relation to making the switch

• In line with creative theme

• Use of latest technologies and site introduction from Lucy Kennedy to fit with TV

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Bill Insert to Existing Customers

• Bill insert to circa 550,000 existing residential customer

• 12% minimum savings on ESB rates

• How to switch, what happens next, FAQs

• Phone and web response mechanisms

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Launch

• Official traditional media launch date was 18th February 2009

• Blogging and social online launch 17th February 2009, embargo until morning of 18th February

• Outdoor revealed from 2pm

• TV, Radio, Press and Online all go live from 12pm, post press conference

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Overview of the Sales Operating Model

Presenters : Scott Wilson – Telesales Manager, Bord Gáis Energy

James Moran, Head of Outbound Sales, Conduit

Company Vision & Values

It is important to have a clear company vision and a robust set of values that steer your decision making in terms of choosing a partner.

Use these as part of your selection criteria when choosing a partner.

The key to success is to choose a partner that can live up to your company values and help you deliver your vision.

Ensure your chosen partner has the right level of experience to deliver your objectives.

Value Synergy

Integrity Guidance Experience

Respect Empathy Flexible

Excellence Safety Quality

Innovative Performing Performing

Freedom Proactive Innovative

Honesty & Integrity Agility

Develop A Partnership

Field Sales ActivityDomestic

SME(120 FTE)

Telesales ActivityDomestic

SME(80 FTE)

Strategic and Business DirectionVendor Management & Support

Tactical Sales PlansPerformance Management

RecruitmentTraining

Sales Expertise

Flexible and Robust Solution

Solid Sales Structure

Proactive Problem Solving

Proven Track Record of Inbound and Outbound Sales

Quality of Sale

Ability to Drive High Volume Sales

Competitive Cost to Acquire

Client Requirements

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Keys to Success

People - Profiling

Figure 1: Agent Profile 1: Wayne Figure 2: Agent profile 2: Ash

• Introduced ‘Modelling’ program with top performing agents

• Developed ‘psycho-symmetrics’ to profile the agents

People - Recruitment

• Used profiling results to developed online an assessment tool

• Implemented ‘tiered’ interview process incorporating: online assessment, group interactive interview & 1-2-1

Training

• Integrated approach to deliver training

• Strong emphasis on relationship building and understanding ‘personal objectives’

• Agents took ownership of creating inbound scripts and objection handling

• Focused on incorporating brand values into ‘day-to-day’ job

• 50% of training dedicated to soft skills

• Developed intranet tool to support and reinforce learning

When a customer calls any contact centre, the customer must feel like they are speaking with an “expert”

Regardless of In-House v Out-sourced, the “expert” must be able to assist the customer and live the Brand Values first hand

How is this achieved in an Outsourced environment?

A clear set of Goals & Objectives are needed to ensure the right result is obtained

Buying into it all

Do’s & Don'ts

• Align requirements to business vision

• Develop a robust selection criteria

• Develop a true partnership approach

• Develop a win win contract

• Build a robust vendor management structure

• Put in place clear objectives and KPI’s

• Lose ownership of the customer

• Let your customers see an outsourced sales relationship

• Outsource the quality assurance responsibility

• Assume the vendor understands your business direction

• Exonerate yourself from consumer and industry compliance requirements

Do’s Don’ts

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