Mercury Energy is one of the country's largest electricity and gas retailers, serving about 20 per cent of New Zealand's retail market. It strives to be cost-effective and customer-centric, something which it achieved in the past year with a substantial improvement in earnings despite unprecedented levels of customer switching and the ongoing effects of the global recession.
Mercury's continuing success can be attributed to its move away from `cookie cutter' retail offerings, and a focus instead on offering unique point-of-difference business models to increasingly savvy customers.
One such model is the hugely popular three-year fixed-price plan. In the six months since its launch in November, more than 70,000 high-value customers have taken up the option. That popularity comes down to customers wanting greater certainty over their power bills, which are set at a 9 per cent premium to current standard rates for three years from the date they sign up.
Another unique Mercury model is the use of GLO-BUG technology which requires credit-risk customers to pre-pay for their energy use. Customers can top up their meter to fit in with their income cycles and budgets, allowing them to manage both their energy costs and consumption. That helps the customer keep their power on without falling into debt and has enabled Mercury to keep debtor expenses flat at 0.5 per cent despite customer growth and challenging market conditions.
Mercury is also pioneering new technology to assist savvy customers to monitor and manage their energy consumption. In the past year the company has trialled the TIMEWISE smart meter, which helps customers change the timing of their energy use to conserve energy and maximise bill savings. While the trial was interrupted by the Canterbury earthquake, findings to date show 14 per cent of homes taking up the offer and those who tried it prefer it to traditional pricing.
Mercury says its success is also down to its engagement with customers and a focus on "which ICPs" it serves rather than "how many". Part of that commitment is ensuring existing customers are satisfied with their existing service. Mercury was ranked a close second in Consumer New Zealand's customer satisfaction rating last year and Mercury has enjoyed a year-on-year increase of 2 per cent in ratings by its customers.
Account holders are encouraged to get involved with the Mercury Perks and Mercury Movie Clubs to receive rewards such as leisure vouchers and tickets for special outdoor summer movie screenings. Customers are also urged to join Mercury in giving back to the community by becoming a Star supporter and donating to Starship Children's Hospital each month when paying their bill.
A contact centre incentive scheme has encouraged staff to sell the benefits of the Mercury clubs, plans and payment options, increasing sales and boosting both customer and staff satisfaction. Mercury staff were happier in the past 18 months, with the annual JRA survey finding an 8 per cent increase in staff engagement.
Mercury's success is also down to effective cost-management, which has reduced operating costs by 10 per cent in the past three years. Small changes, such as removing freepost envelopes for account payments, cost recovery on credit card and cheque payments, and removal of free access to 0800 services from cell phones, have saved hundreds of thousands of dollars annually with minimum customer complaint and no noticeable negative impact on them.