For many Australians, the winter energy bill is one of the highest household expenses for the year. With three major retailers announcing energy price increases of up to 20% taking effect on 1 July 2017, Australian families are bracing themselves for an extra big hit on their household budget when their winter bill arrives this spring.
Nielsen research reveals that nine-in-10 Australians are concerned about rising energy prices; compared to six-in-10 concerned about petrol prices and just four-in-10 concerned about their mortgage.
This concern around energy price hikes has inevitably increased the number of consumers who are shopping around for better deals. Nielsen Consumer & Media View (CMV) data shows that as many as 1.9 million Australians are planning to switch energy providers in the next two months and this figure is likely to grow once winter energy bills start arriving. The number of Australians planning on switching provider in the next two months has increased by 23% year on year.
A Nielsen Omnibus survey undertaken in October 2017 included asking specific questions about 19 energy retailers - it revealed an overwhelming level of consumer concern around price, followed by lack of rewards/incentive programs, staff friendliness, as well as a lack of information on energy saving ideas. All of these factors have played a part in the number of households who are now on the hunt for alternative providers.
The most concerned group nationally are 40-54 year olds living on a household income of $100-$150k per annum. More than one-third (35%) of these consumers say they intend to switch energy providers in the next 12 months.
So how do energy retailers engage with this particular group of ‘switchers’ and persuade them to stay or convert them into new customers?
Reaching switchers with a tailored message that speaks to their concerns is mission critical for energy retailers. Switchers are particularly engaged by outdoor advertising (67% are exposed to over 17 outdoor touchpoints per week); 45% go to the cinema at least monthly and they are heavy magazine and newspaper readers. These consumers are also more likely to be prompted to search the Internet after they have been exposed to an ad.
Switchers are also twice as likely to say they are attracted by celebrity endorsements. This is important for energy retailers considering sponsorship and/or endorsement deals as part of their marketing strategy. For example, this group of 40-54 year old energy switchers are avid sport lovers, with a strong interest in soccer and also more likely to have watched live AFL, Rugby League and Cricket matches in the past 12 months.
The rising cost of energy continues to put pressure on household budgets. It highlights the need for energy retailers to better understand, reach and resonate with individual consumers in order to tailor product offerings, and in turn, attract new customers while helping to prevent churn.
Nielsen Consumer & Media View is a rolling survey of more than 20,000 Australians aged 14 and above. It captures their lifestyles, behaviours, passions and attitudes toward almost every aspect of their life. It’s great for helping advertisers understand the everyday Australian consumer that they want and need to communicate with. We also include media consumption data with the fusion of official TV, radio and digital audience ratings to get a rounded view of how brands can best target and reach their target audiences. To find out more about how CMV can help you more effectively plan your marketing, please contact your Nielsen representative.