Putting aside the company’s key financial stats (which include a 13% rise in underlying earnings), Trustpower’s aggressive retail growth strategy – backed by its unique energy+telco multi-product offerings – is starting to challenge the status quo in the New Zealand retail electricity market.
After just the first year of a five-year retail growth plan, Trustpower is already achieving noteworthy gains in target North Island metropolitan electricity markets, largely at the expense of the four big retail players (Genesis, MRP, Contact and Meridian). The chart below illustrates just how effective Trustpower has been in attracting and retaining new electricity customers – achieving a standout net increase of over 20,000 consumers (switches) in the North Island over the past 12 months:
Of course, one would assume that Trustpower’s competitors won’t stand by much longer in the face of sustained customer attrition. While at this stage Trustpower’s gain of a little under 1% of total market share in 12 months is unlikely to be ringing alarm bells in the corridors of the big four electricity retailers, they will almost certainly be planning a competitive response to stem customer churn.
Nevertheless, Trustpower holds a unique competitive advantage over its energy-only rivals that would suggest the market is likely to become highly contested with new product bundles and discounts over the coming years.
Put simply, the multi-product approach taken by Trustpower is building customer engagement and loyalty to levels significantly ahead of market averages – reinforcing the company’s strategic point of difference in being New Zealand’s only multi-utility provider.
Notably Trustpower’s relatively low customer churn rate – which runs at 14% for electricity-only customers in comparison to a retail industry average of 19-20% – continues to decrease with the acquisition of more multi-product customers.
When adding telecommunications into the product mix, Trustpower’s customer churn is driven lower still – to a remarkably low 8% for customers subscribed to both power and telecommunications:
Readers of Trustpower’s Investor Briefing will also note a continued strategic “focus on technology tools and analysis to improve customer and target market insights” – an area in which Trustpower has been receiving guidance from Stellar Consulting Group for more than five years.
Over that time Stellar has provided Business Intelligence services to help Trustpower move from a fragmented, manual reporting environment to a world-class data warehouse and analytics platform that integrates all customer and product related data.
Stellar continues to provide specialist Business Intelligence skills helping Trustpower to improve customer and market insights, which in turn help to drive the high customer acquisition and low churn rates seen today.
Stellar is New Zealand’s leading provider of Business Intelligence services, partnering with many of the country’s most respected brands to achieve similarly brilliant results. Call Stellar today to discover how we can help your business succeed in competitive markets.