2017 Entry Form

2017 Comms Council New Zealand Effie® Awards Entry Number: 01904 Entry Form – Category O Best Strategic Thinking 2017 ENTRY FORM (Note: word count 2,500) Entry ID: 01904 Entry Title: Mercury: Energy Made Wonderful Client: Mercury Product: Electricity First Media Appearance 31 July 2016 Date: Category: O – Best Strategic Thinking Category Campaigns that display particularly strong strategic Description: thinking. This is the thinking before the creative brief, as opposed to the creative idea or execution. Judges are looking for examples of where an agency has taken a client’s brief, and through fresh insight or inspired problem solving, developed a ground breaking strategic direction. Judges will need to see a clear delineation between the strategic and creative thinking, and understand how the strategic and creative platforms have or will deliver long-term success for the brand. Page 1 of 19 2017 Comms Council New Zealand Effie® Awards Entry Number: 01904 Entry Form – Category O Best Strategic Thinking Title: Mercury: Energy Made Wonderful Client: Mercury Product: Electricity 1. Case Summary (0%) Please write a brief summary of the case study and results not exceeding 90 words. Rebranding a company that sells an invisible product, in a grudge-purchase category where apathy rules? Time to do something profoundly differentiating, long-term. Not a fleeting creative splash. Something genuinely strategic. Like Mercury’s new brand celebrating Energy Made Wonderful: achieving or exceeding every objective – customer retention, staff engagement, brand scores, company performance, acquisition; everything – in under a year. Mercury now enjoys the lowest churn rate amongst the Top 5 retailers, and is #1 for net customer gain in arguably the world’s most competitive electricity market. Seeya, apathy. We’re on a roll. Page 2 of 19 2017 Comms Council New Zealand Effie® Awards Entry Number: 01904 Entry Form – Category O Best Strategic Thinking 2. What was the challenge and what were the objectives? (10%) What was the market context, what was the strategic challenge the client faced, what was the creative challenge the agency was set, and what were the short and long term objectives that were set for the campaign? Mercury Energy retailed electricity. Its parent – Mighty River Power – generated it. Although these established brands were trusted, they were swimming in a “sea of sameness” with the other large, traditional electricity retailers – seen as ‘old fashioned’ in a market rife with new tech-driven start-ups. Both were losing salience. And Mercury Energy was losing customers. In a market where people care about the size of their electricity bill, but are largely apathetic about who it comes from,1 losing salience was a real problem. It’s a vicious circle: because churn averages an eye-watering and terrifically expensive 20%, virtually every company fights for customers month-by-month – training customers to switch for promotional offers, thus driving churn. 1 Agency / MERCURY PROPRIETARY RESEARCH Page 3 of 19 2017 Comms Council New Zealand Effie® Awards Entry Number: 01904 Entry Form – Category O Best Strategic Thinking If you can’t break through with a strong brand, you’re in for a long-term pounding on price. Success meant modernising – bringing two businesses together to create a single, strong, salient brand. But changing brands almost inevitably delivers a significant drop in sales for an extended period.2 We identified three specific challenges to overcome: 1. COMMERCIAL: dramatically improve business performance. Take two aging brands out of the market, launch a new one, and make it stick – changing customer, employee and investor behaviour in NZ’s super-competitive electricity category. Simply changing the logo wasn’t going to cut it. 2. STRATEGIC: build a strong new brand that changes behaviour, long-term. Ehrenberg-Bass has proven a strong brand is critical in a commoditised market. It shortcuts decision- making, creates trust, builds salience, and remains top-of-mind in trigger moments that vary widely. For example: feeling confident saying no to a $300 acquisition offer from a competitor; feeling secure enough to happily sign a long-term contract; or liking Mercury enough to recommend it to others – or switch to Mercury at the next opportunity. 2 “Sales typically drop 10-20% immediately following a rebrand and it takes 3-4 years to restore levels” – Millward Brown, Steps to successful brand changes Page 4 of 19 2017 Comms Council New Zealand Effie® Awards Entry Number: 01904 Entry Form – Category O Best Strategic Thinking It’s not just about customers: we wanted people to invest in Mercury’s values and direction, as an employee; invest in Mercury, as a shareholder; recommend other people invest, as an analyst; and even partner with Mercury (governmental or commercial). 3. CREATIVE: drive an emotional connection with the new brand that means something to all those audiences, in all those moments. Something that could help make the world a better place – for generations. Measuring effectiveness against those challenges: OBJECTIVE 1. STABILITY. Using brand, retain existing customers – driving churn down, and keeping it down, long term: 1.1 Customer churn – maintain pre-campaign 2.8%-point gap to market (18% vs 20.8%) 1.2 Customer satisfaction – improvement (i.e. +3 percentage points) from pre-launch baseline 58% 1.3 Customer brand relationship – improvement in drivers (i.e. +10) from 57 points, pre-launch OBJECTIVE 2. PREPARATION. Using brand, help turn performance around – from the inside out: - 2.1 External brand perception – improvement in brand measures across the board - 2.2 Investor confidence – positive recognition from analysts; ideally, share price stabilisation and growth - 2.3 Partnership opportunities – demonstrate reach and engagement with customers through unique channels (retail stores, content) OBJECTIVE 3. GROWTH. Using brand, acquire new customers, in greater numbers and at lower cost: - 3.1 Net customer numbers – improve to 0+ from -2800 in the year before launch. Page 5 of 19 2017 Comms Council New Zealand Effie® Awards Entry Number: 01904 Entry Form – Category O Best Strategic Thinking 3. What was the strategic thinking that inspired your big idea? (25%) You need to convince the judges why this entry deserves to win based on your strategy. You need to show how your market analysis, insights and interpretation were developed into a clever strategic direction that unlocked the solution and was instrumental in the success of the campaign. NZ’s unwritten electricity marketing rule? Make it clean – or sell it cheap. But unlike fossil fuel-driven countries, consumer research revealed that renewable generation is simply table stakes in NZ. And fighting on price is completely unsustainable. However, while researching what electricity means to people, we discovered an opportunity to remind Kiwis how amazing electricity really is, and what it can do – leading to our strategy, based on four strategic principles: INSIGHT #1: Research told us NZers want someone to lead – not just show the benefits of sustainability, but make energy exciting.3 PRINCIPLE: Be inspirational. We developed a new brand promise standing for something Kiwis really care about. That brand promise: Mercury inspires New Zealanders to enjoy energy in more wonderful ways. INSIGHT #2: Make the new brand position tangible. Electricity is already invisible. It doesn’t need another ad campaign based on abstraction. PRINCIPLE: Focus. Puns, metaphors, sock puppets – all out. Instead, we would champion one specific thing symbolising our new brand promise. We didn’t have years to develop a radical new technology. We saw plenty of electronic gimmickry. But what would make a real difference, long-term? Insight #3: The audience is apathetic – accentuate the positive, and don’t ask too much. 3 Agency brand development research 2015 Page 6 of 19 2017 Comms Council New Zealand Effie® Awards Entry Number: 01904 Entry Form – Category O Best Strategic Thinking PRINCIPLE: Create positive associations. We needed to make connections – between Mercury, and something that would give people a wonderful, fresh appreciation of electricity. We reviewed innovative uses for electricity to find something visibly transformational, readily available, and new enough to be “fresh”, but not futuristic. Electric vehicles stood out as an option – but realistic uptake for your average Kiwi is still five years away. Enter e.bikes. It’s a moment you hardly ever get in adult life, but one you’ll always remember: the child-like delight of riding an e.bike for the first time. We know – because we’ve watched, and filmed, grown people grinning their faces off. Best of all, e.bikes were poised to take off. They just needed a bit of a boost.4 Insight #4: Actions speak louder than words. Leading also means delivering a real benefit to customers. PRINCIPLE: Focus on “doing”. Beyond making wonderful ads about e.bikes, we’d centre our marketing around their tangible benefits – actively making it easier to like, understand, try, and buy one. 4 https://www.nzta.govt.nz/assets/resources/research/reports/621/621-regulations-and-safety-for-electric-bicycles-and-other-low- powered-vehicles.pdf Page 7 of 19 2017 Comms Council New Zealand Effie® Awards Entry Number: 01904 Entry Form – Category O Best Strategic Thinking 4. What was your big idea? (5%) State in one sentence. What was your core idea that drove your effort? Consider ‘idea’ in the broadest sense, ie., ranging from communication-based to the creation of a new service or resource. The idea should not be your execution or tagline. Celebrate e.bikes as the ultimate expression of using electricity in more wonderful ways. 5. What was the creative execution and how did it bring the big idea to life? (10%) Describe the creative work that delivered the big idea. Give the judges a sense of why this was a particularly innovative, original, progressive approach. On an e.bike, even the steepest of hills disappear.

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