This article was written in 2012 and may contain out of date information. Browse more recent articles.
Three and a half years after launching the Big Switch, Bord Gáis has finally pulled the plug. Giant light switches have been removed from buildings across the country, Lucy Kennedy has stopped asking “What’s your excuse?”, and Bord Gáis has walked away with hundreds of thousands of customers and tons and tons of cash.
Even though Bord Gáis has retired The Big Switch campaign, it was spectacularly successful while it ran. A perfect storm of marvellous marketing unleashed on an eager Irish population at exactly the right time. It enabled Bord Gais to walk right up to ESB HQ, and help themselves to tons of customers while the old electricity company could do nothing about it.
Initially, execs at Bord Gáis weren’t sure whether Irish people could wrap their heads around buying electricity from the gas company. They wondered what type of marketing to use, how they would educate the market, and all that stuff that needs pondering when you’re planning to launch something new.
Then they wondered what their target markets would be, so they did a spot of research and came up with some answers. Then they boiled it down to two areas. Existing Bord Gáis customers who could maybe be persuaded to take electricity as well…. and everyone else. Everyone else!!!
When your target market is every household in the country, everyone uses the product you want to sell, and yours is cheaper than the only other supplier, you’re in marketing heaven. You don’t have the usual marketeer’s worry that you’re blowing all your money in the wrong place, because there is no wrong place. You can take the scatter-gun approach. And that’s exactly what Bord Gáis did. They did TV, radio, newspapers, billboards… and then there was the internet. Bord Gáis reckoned they’d signed up 30,000 customers in the first 30 days of the Big Switch campaign just by buying Google Adwords - and they also had what can be described as one of the most impressive social media campaigns to date to back that up.
And the overall results were phenomenal too. Bord Gáis expected to sign up around 80,000 customers in their first year as an electricity supplier. They more than doubled that in the first three months. In fact, the campaign was so successful that by the first quarter of 2011, Bord Gáis had signed up nearly 444,000 customers.
So why on earth would Bord Gáis mothball the Big Switch? After all, in just two years, they had gone from zero electricity customers to acquiring 22% of the entire domestic electricity market. An amazing achievement.
But Bord Gáis’s share of the electricity market didn’t keep growing. By Q1 2011, they had peaked with 443,723 customers. Since then, Bord Gáis’s share of the market has been falling every quarter. And despite continued advertising and promotion, customer numbers were down to 365,249 by Q1 2012. A drop of 78,484 in just one year.
There are a whole lot of things that could explain why Bord Gáis’s fortunes reversed so dramatically. Airtricity entered the market and started competing aggressively. The ESB was given permission to set their own prices after haemorrhaging 40% of their customers. And most importantly, Bord Gáis had educated people to switch. So these people had no problem switching again when their discounts ran out. And it’s here that I think Bord Gáis ran into trouble.
The Big Switch had a great shtick. Get 13% off electricity unit rates. It was simple and Bord Gáis made a big fuss of how easy it was to switch. But what wasn’t hollered from the billboards was that the discounts lasted for two years for initial customers of The Big Switch, and then after a while new customers were offered discounts for one year only. After their discounts ran out, customers were dropped on to Bord Gais’s Standard rates which were pretty much the same as the ESB’s. So, sure, you could save around a tenner a month for 12 months (nothing to be sniffed at) but then you were back where you started.
When customers realised this, they called Bord Gáis to ask if they could have their discounts back, or a retention rate, or something off their bill. But they were told that discounts were only for one year and that’s that. Even customers who’d left and wanted to come back were told the same. You’ve had your discounts – said Bord Gáis - we’re not giving you any more.
Hundreds of thousands of customers switched to Bord Gáis to get away from expensive standard rates – and found themselves paying just that – standard rates. So they started switching again, to Airtricity and the newly deregulated Electric Ireland.
Bord Gáis has copped this and seems to be tackling it with gusto. They aren’t focusing on just acquisition anymore. They are looking at ways to keep customers too.
It started with the Bord Gáis Energy Theatre and priority tickets and promotions for Bord Gáis customers. Then in August, Bord Gáis launched their Tesco Clubcard promotion. Now you can get points for signing up, points for paying your bill and even double the value of your vouchers when paying your bill.
More importantly though, Bord Gáis is following Electric Ireland and Airtricity in welcoming back old customers with new discounts and even offering follow-on discounts after 12 months. They are even taking a very UK approach to energy tariffs. Now if you pay a fixed amount every month, you’ll get their best rate, and for many people that best rate may be just about the best in the maket. If you prefer Tesco Clubcard points to their highest discount, they'll give you 2,000 of those for signing up in addition to a more modest discount.
So it’s bye-bye Big Switch but hello to the new Bord Gáis Energy.
What do you think about energy deals that package Tesco Points? Which would you prefer? Bigger discounts or Tesco Points? Let us know in the comments below!