Powershop is now the world’s first full-service mobile energy retailer, allowing customers to buy electricity, manage consumption and access invoices through their smartphones.
Only six months after launch, 14,000 customers – more than a quarter of the firm’s residential base - have downloaded and used the Powershop application (‘app’). Powershop expects that within nine to 12 months, mobile will be the primary purchasing channel of about 58 per cent of its customers.
The app allows customers to buy power anywhere, get reliable cost estimates, reduce power costs, track daily usage and refer friends and family.
Mobile users are saving at least 20 per cent more than non-mobile customers, shaving about $80,000 off customers’ bills during the past six months. They are also more likely to serve themselves online and are better advocates for the company.
The mobile app has generated almost 800 successful sign-ups, which has boosted the company’s margins by more than $57,000. Lower overheads mean the gross cost-to-serve a mobile customer is about 18 per cent less than that for non-mobile users, the company says.
Powershop launched in 2009 as the world’s first online shop for power and now services around 55,000 households and businesses from Auckland to Southland.
In the past year, Powershop has seen an 11 per cent growth in revenue and a 9 per cent increase in active customers. The company now holds a 3 per cent market share, up from 2.6 per cent in March 2013.
For the past five years, Powershop has been the only retailer to offer customers regular discounted specials and allows customers to purchase power as it suits them.
Another first during the past year is Powershop’s savings guarantee. If after 12 months a customer hasn’t saved money compared with their previous retailer, Powershop credits them the difference.
Customer engagement
The company’s primary acquisition channels are word-of-mouth. In the past 12 months it switched its social media channels from customer service platforms to social engagement platforms.
As a result of the ‘Facebook Friend Get Friend’ campaign, the average number of customers referred were up 175 per cent and reduced Powershop’s customer acquisition costs by an estimated $17,000.
Powershop have consistently ranked No 1 in Consumer NZ customer satisfaction surveys for 2011, 2012 and 2013, with a rating of 93 per cent in 2013. Powershop says customers using the mobile app are 60 per cent less likely to switch to a different retailer. It believes that engaged happy customers are more likely to save and stay with the company.
The bespoke technology developed for the app means the intellectual property for the platform remains in New Zealand.
In November 2013, Powershop became the first New Zealand electricity retailer to launch in Australia. It now has about 10,000 customers across Victoria – almost half of whom are using the mobile platform.
Powershop estimates the platform reduces cost-to-serve by 15 to 20 per cent compared with legacy retail systems. It has had inquiries from other international markets and is now looking at other export opportunities for the platform.
The Energy Retailer of the Year category is sponsored by Chapman Tripp.