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Time to get FRANK on energy prices?

Posted on: Monday 16th of November 2015

Saveawatt, a New Zealand based company, has been pioneering the use of Intelligent Assistant to help households always have the best value electricity plan. 

Saveawatt has gained media and public interest in New Zealand where, despite deregulation of the electricity market, prices have continued to rise ahead of inflation. Now it’s coming to the UK, with CEO Tim Rudkin presenting at Ctrl-Shift’s Growth Through Trust conference.

Ctrl-Shift asked Tim the tough questions around the scope and impact of an Intelligent Assistant on a deregulated electricity market.

 

Please explain what the Saveawatt service does.

Saveawatt’s Intelligent Assistant platform gives consumers their own Intelligent Personal Power Assistant – called Frank. Frank learns how our customers consume energy, what offers best suit their individual needs and then we complete all the switching and administration functions needed to accept that offer. Once a customer signs up to Saveawatt we can continue this process time and time again. The net result is the customer is always on the best plan for their usage patterns and needs.

 

In the UK, in some categories over 50% of all consumer purchases are made via price comparison sites. What is it about the Saveawatt service that makes it so much better and different to existing price comparison services, so that consumers will choose Saveawatt over their current price comparison provider?  

The simple answer is we are not a comparison site. On these sites you have to do all the work and do the switching yourself. Saveawatt is the next generation offering – an Intelligent Personal Power Assistant where you own your data and you just have to tell Frank where you live, how much energy you are using and Frank automatically makes sure you are on the value plan for your best price and right plan. Seventy percent of people don’t switch because its just too much work, our service removes the work.

Frank frees consumers from all the hassle of traditional manual switching. There’s no need for customers to have to repeatedly answer the same questions to check if a better deal exists and then manually complete the switching process. Our system allows customers to be as engaged or disengaged in the process as they choose. They can obtain the offer that best suits their needs without being experts in the energy industry and having to proactively scan the market to understand what is on offer and how that applies to them.

 

How does Saveawatt earn its money? If it’s commission, how will Saveawatt credibly reassure customers that the recommendations it makes are genuinely the best deal for the customer rather than the one offering the highest commission?

Saveawatt earns a commission for each customer acquired or retained through the platform. We run a flat commission structure across all retailers for all services. This process Is independently audited and we will work closely with market regulators and participants to ensure this is a trusted and unbiased process.

 

Why should suppliers want to co-operate with a service that helps consumers get the best deal? From their perspective, it could be seen as a threat, intensifying competition, driving out margin, and forcing prices down – creating ‘a race to the bottom’ on price. How is Saveawatt addressing such concerns?

We initially received these exact same questions from retailers in New Zealand. But the bottom line is that deregulation and competition has not worked to contain electricity price rises in the New Zealand market. A monolithic, cost plus, centrally controlled market has been replaced by a proliferation of retailers with a maze of difficult to compare plans. Consumers are baffled and electricity prices have continued to spiral upwards. The costs of acquiring and retaining consumers are passed on by retailers. I think retailers accept that change is happening to their industry through advances in technology and the empowerment of consumers. By working with Saveawatt retailers can proactively participate in this process while personalising the customer experience. We are working with retailers to help them better understand their customer’s wants and needs so they can retain their customers and navigate this changing marketplace.

And Saveawatt gives retailers the opportunity to retain customers by meeting a competing offer before the customer switches. Also it’s very expensive to try and get customers via door knocking – those annoying dinner time phone calls – and general advertising. Saveawatt provides a lower cost to serve, hyper-personalised customer experience model.

 

At Ctrl-Shift, we think that traditional B2C marketing processes, channels and approaches organised around helping sellers sell are being progressively disrupted and re-organised around ‘Me2B’ processes and channels that are organised around helping buyers buy. We call these services ‘decision support’ services. What is Saveawatt’s vision for how consumers will go to market, and how companies will do marketing?

We believe consumers are going to use customised technology (i.e. digital personal assistants like FRANK), to navigate the vast array of company offerings to find those offerings that meet their personal wants and needs. We believe it is those customers that will prove to be the most valuable marketing channel for companies – turning them from passive participants into fans. For companies this means they need to actively listen to those customers, understand their wants and needs and provide offerings on terms acceptable to their customers. To achieve this in a timely manner and with scale they need to be involved in Me2B processes. As it is becoming unacceptable for companies to rely on holding information or apathy to retain customers.

 

What are your plans for next three years? Will you focus only on energy, or move into other sectors? Will you expand your operations geographically?

Energy is our focus right now, although we are open to looking beyond the energy sector if demand exists. We are currently completing live testing of our platform with a group of early adopter customers in New Zealand, prior to our full scale nationwide launch early next year. Our service and our business model is suited to deregulated energy markets and we are actively engaged with prospective customers in both Australia and the UK.