CMO interview: How AGL is looking to shake up customer experiences of energy

Sandra de Castro

One of the mistaken beliefs people have around digital transformation is that recruiting for skills and experience is more important than having internal talent, AGL’s chief sales and marketing officer, Sandra de Castro, claims.

“The reality is there isn’t necessarily an enormous amount of experience around in these areas [digital marketing and customer-led transformation],” the recently installed executive leader tells CMO.

“Yes, we are bringing in new talent and capability in terms of trying to inject more digital and integrated marketing experience into our business. But having said that, there are some great people in this business. Nurturing and skilling up the capabilities of the people already there is important.

“It’s as much about recognising the talent you have, bringing them on the journey and giving them the opportunities to be creative with a new set of tools.”

De Castro was appointed the head of sales and marketing at AGL in January, filling a gap left by Mark Brownfield’s departure last year. Prior to joining AGL, de Castro spend six years with National Australia Bank as CMO and executive leader of strategy.

Her arrival comes just months after AGL’s CEO, Andy Vesey, unveiled a $300 million customer experience transformation program aimed at putting digital at the heart of the organisation and the way it engages with customers.  

Announced last August, the program sees AGL investing in three core components: Foundational capability, such as IT systems; digital adoption; and “signature moments” for customers around their experience with AGL. A significant portion of investment also relates to data-driven personalisation of services, and the provider is taking on both Adobe’s Marketing Cloud stack, as well as sophisticated decisioning personalisation kit, to achieve these ambitions.

De Castro describes the broad-ranging digital transformation program as “massively ambitious” and one spanning the whole customer end of the business. New products, capabilities and digital offerings are all rolling out in coming months as the customer experience program picks up a rhythm of execution, she says.

AGL is initially looking at five signature moments, all related to delivering digital experiences that charm and delight the customer in unmatched ways. “We have looked at customer experiences in energy, and what are either pain points or opportunities to delight with things that really come to life in the energy space,” de Castro explains.

“For example, one of the moments we’re used a lot in is moving house, and signups. We’ve done a lot of work around that experience. Another is meter reading – in Sydney, there’s still a meter reader man, and we know there’s a lot of pain around that experience. So one solution is around digitising that.”

Then there’s the need to make energy relatable. De Castro points out people often find it hard to understand how the size of their bill relates to energy usage.

Starting with five moments, AGL has 40 it plans to tackle long-term. Some will be supported by above-the-line advertising, others will be details customers feel in the experience, de Castro says. New products coming out will also focused on putting control back in the hands of the customer.

“For some it’s a real issue around the bill being different one month to the next. How to control and find ways to design plans to make it easier to control usage in advance,” de Castro says. “Predictability is another one. It’s a series of products that speak to things customers find unhelpful around energy experiences, or opportunity to do things differently that customers might like better.”

One of the most important things about the transformation program is that it’s tightly embedded with business-as-usual teams, de Castro says.  

“That means team members from various parts of my team are all seconded into the program, and I have a couple of direct reports leading different streams of the program,” she says. “The program as an integrated whole but stays very close to the core business, which is great, because if it’s retooling you’re after, what you’re retooling is BAU. It’s not transformation that’s about creating something off to the side, it’s about creating a new way of working.

“I and my leadership team, plus the AGL executive team running the operations business, digital and various component parts, are all intimately engaged with the program.”  

The expanding role of marketing

That’s not the only thing that’s kept de Castro busy during her first six months in the combined sales and marketing role, covering all consumer and business customer sales, marketing, product and pricing.

In April, AGL officially launched its new brand campaign, the visual reflection of a broad brand repositioning exercise. The new logo includes a stylised gas burner, and has sustainability and digital user experience as key themes. De Castro says much of the research and strategy work had been done prior to her arrival.

The rebrand fits into the wider transformation program in two ways. The first is AGL’s efforts to support decarbonisation of the energy system. “When you listen to the ads, that’s what it’s about, but it’s also showing we’re on a journey to put energy on the customers’ terms through this transformation exercise,” de Castro continues.

“The rebrand was as much about locking in this stated ambition to participate in the decarbonisation of the energy system, as it is to talk to customers about what it means for them and what the experience really is.”

There’s nothing better for a marketer than having a truth to tell, de Castro says, and she notes the brand campaign is grounded in proof points that were years in the making. “We’re telling a story that’s grounded in something that’s already happened - we didn’t just wake up on 23/4 with the largest renewable energy base in the country, that’s taken years to build,” she says. “The business is committed to that story, it’s just that the story’s time had come from a brand perspective."

The first step was to establish the platform and to tell the brand’s story for the consumer to understand the logic behind what AGL is doing. The provider also needed to revamp the branding in order to be “digital ready” through more colour and movement, a simpler interface but also retain some playfulness, de Castro says.

“We’ve also componentised most of the website as part of the rebrand," she says. "Customers don’t necessarily know that in the beginning and it’s a rocky road, so there’s been a fair amount of noise, but we’re getting through it, and we’re ending up with a much better asset.”

Getting over customer apathy

The big challenge energy providers must overcome is customer apathy. In a presentation to CMO and CIO audiences earlier this year, EnergyAustralia’s chief customer officer, Kim Clarke, claimed providers had bored customers into apathy.

De Castro agreed. “I spent a lot of time trying to understand what research says about how customers feel about energy and what their response is to the sector,” she says. “There are a few interesting things that popped out and were pertinent both to the brand refresh and more broadly, the point about customer apathy.”

The first is the relatively recent deregulation of the energy industry. Most Australian states have not been deregulated for that long - Victoria is the longest at just over 10 years, but Queensland has only been deregulated for 18 months. WA electricity remains regulated.

“In a regulated environment, brand is irrelevant,” de Castro comments. “As markets deregulate and brands enter into those markets, it takes a while to awaken those markets to choice, competition and to create brand personas. It’s all things marketers love to do to build differentiation.

“Secondly, what also happens is there’s a fair amount of noise associated with organisations entering those markets, sorting out what the service models look like. When it’s one company doing everything end-to-end, it works one way. But when you break it up, there’s an element of adjustment of people trying to work out what’s the billing system, you have acquisition and so on, which makes for a lot of noise in the service model.”

In the early stages, it’s relatively rational for a provider to strive for invisibility, and not to make too much noise, de Castro argues. She points out that during one of her first energy focus group a few months ago, only a few people knew who their energy provider was.

“There was a quote I loved from a customer from a focus group was when we were talking about decarbonisation and how they help shape the future of energy. We were talking about all the things AGL is doing in this space, as we have done a lot in this space, and the customer’s response was: Why are w invisible? If all you try to do is plain vanilla gas and electricity, then you should be invisible. But if what you’re trying to do is change the world, then you should be prominent.”

What that told de Castro is that if AGL is really going to change the world, customers want to know about it and what the provider stands for.

“We want to lead in the changes of energy system. That necessitates being more prominent that we have been,” she adds. “There’s a huge groundswell of support among Australian to generate energy from renewable sources. We recognise that.

“We are the biggest coal generated electricity provider in the energy market, and we recognise that. That’s why we have to be largest developer of renewables. You have to see the future and be part of the future. Regardless of the noise, the reality is renewable energy is fast headed to become more efficient than thermal and in coming years, it will get to a point where the technology will be better. You need to be part of it, leading it and driving it.” 

Over time, AGL will also be able to provide more personalised marketing and services to customers thanks to the transformation program.

“We know that won’t happen overnight and it will take time, so we’ll start with some use cases,” de Castro says. “But it will ultimately see us serving customers with experiences and products and services relevant to them as opposed to everything being served to everyone and making it confusing.”  

Keeping marketing real

Through all of this, de Castro emphasised the importance of the “marketing basics”: Good segmentation, understanding your market and how people use your product, then guiding them on that journey.

“Increasingly, this is also about experimentation, making sure you have metrics around it so you learn by doing and you have a better idea of what works,” she says. “It’s about building an agile business, using the tools available to shape the experience and be guided by what the customer does, rather than what you think they’re doing to do.”   

Vital to success are culture and diversity, particularly in the evolving function of marketing.

“By that I also mean sales in a digital world. Because in a digital context, sales and marketing become the same thing,” de Castro says.

“If you think about the community of people making that possible, it’s everyone from nuts and bolts, technology people to really analytical people who are good at looking at the data, to more traditional market research, financial analysts to more traditional creative communities, to just that highly commercially driven thing that’s happening in sales. It’s an amazingly diverse set of people, experiences and skills.

“Whether or not it will sing as a unit is about how you make that work together. It's how you create that collaborative culture and way of working, and that’s about diversity. I’m lucky with the culture here, it’s a very supportive place.”

What’s also helping AGL is this purpose-led vision for decarbonising. “This has got to be one of the most all-inclusive, ambitious digital transformation programs in the country right now,” de Castro claims. “It’s a huge tilt towards customer connection and the sharing economy.

 “We’re on this amazing journey, and there’s excitement around building this digital retailer, the brand transformation and the connection to customer that comes with it. It’s a very buzzing place to be in right now.”

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