Targeted approach recommended to promote retailer switching in New Zealand


Wellington, New Zealand — (METERING.COM) — April 12, 2013 – A more targeted rather than mass market approach to customer switching is likely to be the most prudent and worthwhile option for the future in New Zealand, according to a new discussion paper from New Zealand’s Electricity Authority.

The paper, which was prepared by the Authority’s Retail Advisory Group, was prepared to review options to promote comparison and switching of electricity retailers by consumers after April 2014, when the current initiatives are scheduled to cease.

The Consumer Switching Fund was implemented on November 1, 2010 to support initiatives to address concerns around consumers’ lack of propensity to compare and switch electricity retailers. Under this the central initiative has been the What’s My Number campaign, involving mass market advertising and provision of on-line tools intended to simplify the process of comparing retailer offers.

The paper says a preliminary assessment of the What’s My Number campaign indicates that overall it is promoting to consumers the benefits of comparing and switching retailers. However, a conclusion on the specific economic benefit has not been reached – primarily due to a lack of evidence and information about changes to retailer product innovation and proliferation since the initiative was established.

Given that NZ$10 million (US$8.6 million) has been invested in the What’s My Number campaign, future programs could probably be implemented at lower cost, in a more targeted manner using the What’s My Number brand.

Such programs include:

  • Commissioning independent research for additional insights into the attitudes and behaviors of retail electricity consumers
  • Targeting ‘stickier’ consumer segments that are less prone to switching and highlighting the possible savings and ease of switching, or targeting consumers who may be open to innovative product offerings such as metering options, time of use tariffs, or buy-back rates
  • Focusing to a greater extent on the particular times of the year (such as when price changes occur or prior to the start of winter) when electricity retailer choice might be more topical, and remind consumers of the freedom to choose retailers and the merits of comparing retailers
  • Targeting consumers in those regions where competitive pressures have been identified as being lower – generally regional markets – rather than targeting all geographic markets.

Feedback on the proposals should be submitted by June 4.