Ideas & musings about consumer behaviour

Origin and AGL dominate energy market – other players need to differentiate

Global Reviews followed the journey of Australian consumers looking to engage energy providers.

Key highlights:

  • Origin, AGL and Energy Australia were ranked 1, 2 and 3 for brand recall unprompted and maintained those positions all the way through to final preference
  • Origin and AGL dominated unprompted brand recall with both well over 50%

The behavioural study conducted in November 2012, firstly asked participants to name, unprompted, energy providers. Origin came out on top in terms of brand awareness with a score of 63%, followed closely by AGL on 58%. Following on from there however, there was a sharp drop to Energy Australia (28%) and TRUenergy (24%).

It is clear that an effective sales journey that understands the customer and what they need at each stage of their decision making process is of paramount importance for energy retailers. In this particular study it emerged that high brand awareness directly correlated to being shortlisted and finally preferred.

There were though some exceptions: Integral Energy, for example, showed a solid awareness rate, but in the shortlisting and final preference phases this provider tended to lose ground. Lumo Energy and Alinta were just the opposite – a disappointing result in brand awareness did not stop these companies from achieving comparatively good results in the subsequent stages.Energy

With the Australian energy market revolving around two major players, it is hard for other companies to compete. In all the important rankings like brand awareness, shortlisting and final preference, this report showed that the major companies consistently occupy the top spots. Smaller providers need embrace any piece of information and insight and leverage it if they want to make any inroads in such a hard-fought market.

A way to achieve this is for energy providers to differentiate themselves. Consider, for example, the case of Red Energy and Dodo Power & Gas. Both these providers scored good results in the shortlisting and final preference phases, thanks mostly to good deals and offers that were easy to understand. When compared to its competitors, Red Energy was able to improve on its relative position as the customer sales process went on. Dodo Power & Gas was not as effective, as it lost some ground when it came to converting customers, but it was still able to achieve a convincing result.

Systematic investments in online presence and visibility in both search engines and comparison websites must be a fundamental plank in every provider’s strategy, particularly in light of the fact that almost nine out of ten respondents revealed that at least half of their research for energy supply would be done exclusively online. 85% of participants confirmed that they would do at least half of their research exclusively online.

More than two thirds of participants said that they would spend up to 4 hours researching before applying for energy supply, while a total of 75% would spread their research for a suitable provider throughout a period of 7 days. In addition to researching into the companies that consumers prefer, the study was also aimed at gathering a better understanding on how consumers use the internet to conduct their research for energy providers. Comparison websites were the most popular type of websites used by participants when looking for energy supply, followed by provider websites and search engines.

Global Reviews Marketing Effectiveness Research is focused on understanding how consumers go about researching and selecting products online and via mobile devices. This remote behavioural study tracks consumer actions, what types of websites are used when researching for a provider and which companies are most likely to be ‘shortlisted’ for further consideration. It analyses the progress through discovery, initial preference, short listing and final preference phases of a customer’s online purchasing journey.

For more than six years, Global Reviews has been working with Australian and UK energy companies gathering not only extensive data on consumer behaviour but unique insights and deep analysis of why consumers act the way they do when searching for an energy provider. This data and insights are used by marketers, agencies and digital professionals to better target their marketing spend, reduce cost per acquisition, significantly increase sales conversion and drive customer advocacy.

For more information on purchasing this report, please contact:

Stephen Neate
Commercial Director
T: +61 3 9982 3412
M: +61 409 054 641
E: stephen.neate@globalreviews.com

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