CFO World

How Contact Energy is addressing the three big challenges of personalisation

Digital channel manager for New Zealand energy company details the strategic thinking behind its personalisation program
Contact Energy's Steffen Troschke

Contact Energy's Steffen Troschke


Reduced cost of sale, higher customer engagement scores and stronger conversion are just some of the results Contact Energy has chalked up after building out a personalisation program.

Speaking at the recent CIO-CMO Executive Connections in Auckland, Contact Energy’s digital channel manager, Steffen Troschke, shared how the energy company tackled three key challenges arising from personalisation through a combination of people, process and technology. 

The ambition behind Contact’s personalisation approach is to improve sign-ups, existing customer engagement and digital self-service.

“The biggest challenge is how to simplify customer journeys, make it easier for them to engage with us, and provide more context and information when they engage with us,” Troschke told attendees. “How do we address the differences in mindsets as they come to our website, mobile app, or to our social channels, with the right messaging? That’s what personalisation is all about.”  

There are a number of levers you can pull for personalisation, from audiences to customer groups, customer values, and different digital assets. As a result, you end up with a massive combination of things you can do.

“It’s easy to get carried away with different campaigns and address quite specific customer issues or show very detailed messages to customers, getting lost in the opportunities,” Troschke said. “As a result, it’s important right at the beginning to think about how you priorities the combinations and options you have.”

With two audiences (new versus existing customers), seven geo-locations, seven customer segments, five age ranges, three product categories and five experience variations, Contact potentially had 1470 combinations of activities it could pursue. So how did it determine what could deliver the best returns?

“When we run personalisation campaigns, we look very granularly at what the return is and how many more transactions we get. Those are not just sales, it could be app downloads, or mobile-based bills paid,” Troschke said. “We try and find a value for each of those transactions to come up with a number to be able to address what will be the most successful and therefore what we prioritise.”

The second personalisation challenge Troschke identified is creating operationally cost effective ways to create personalised experiences for ‘segments of one’. Much like in Australia, New Zealand marketers can quickly end up with extremely small segments, he said.

“You might have amazing 200 – 300 per cent conversion increases, but then you look at the size and it’s five sales to seven sales,” he explained.  “You have to ask yourself early on in the process: How do you create an operating model and technical architecture that allows you to do personalisation and segments of one cost effectively?

“If it takes you a week to create the digital assets, put them up on channels, track results and optimise the campaign, it’s a lot of effort. You have to ask: Is that worth the five incremental sales?” he continued.

“Quite often, personalisation programs get stuck at a point because it’s not worth doing. You sweep up the low hanging fruit, then your team doesn’t get to further develop and you end up with inertia. So it’s important to think about that early on.

“In particular, think about creating digital assets: How you template, but also your content management, efficiently.”

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Tackling this for Contact also meant rebuilding its CMS capability. “You end up quite often with 30 different homepage variations, and you can end up in the situation where if you don’t do it right from the beginning, you have 30 different banners, with 30 different buttons, on 30 different pages. If you want to change the label on a button, you have to go to 30 different pages instead of just one,” Troschke said.

“Having those operating impacts in mind is really important when you construct the website and digital channels.”  

The third personalisation challenge is omnichannel orchestration, and ensuring personalised experiences can be replicated and connected across digital and non-digital channels.

“If you’re addressing customers with a certain message, such as an app download message, it’s consistent on your mobile, website, search channels? How to connect up all the data points across all the different systems to be able do that,” Troschke said.  

Admitting Contact is still in the early stages, Troschke said the team started by connecting digital marketing channels with its website. It’s now working to connect these to its mobile app, which is being rebuilt.

“In the early days this was very hard, with all the different systems in digital marketing, and that’s very Google-driven. Then in the website, big platforms like Sitecore often have native frameworks so the different systems and data flows are different. You need to therefore think about your data strategy with digital channels alignment in mind,” Troschke explained.  

Using the Sitecore platform, Contact has built out behavioural-based personalisation, using Google and Sitecore data to do personalised onsite and offsite campaigns in digital media as well as across its website. A big initiative was Contact’s four landing pages.

“We started doing a lot of personalised emails as well, where we tracked hot leads and addressed them via email,” Troschke said. “For people moving house, we do an activation where we have personalised emails based on what those individuals need. And we do a lot of geotargeting.”

Another dominant campaign push has seen Contact addressing geographic regions with different offers through a highly targeted promo code offer program.

“A big problem with our industry is it’s very price-driven, so you’re forced to be aggressive with your offers, and as a result, you often pay for people who would have signed on anyway, so you end up with really high cost per sale,” Troschke commented. 

“In order to address that, we granularly analysed how people move through the site, and when they come back, then put personalised offers in front of them to get them over the fence. It’s helped reduce our cost per sale significantly, while also increasing sales.”

Another reason why geotargeting is so key is because energy pricing depends on the region or city a consumer is located.

“That flexible rates model means we use geotargeting when people give us their address for all sorts of things - we can see region, if there’s more profit margin in that region, so we can give them different offers depending on where they come from,” Troschke said. “We also use it for availability of products.” 

Contact’s next priority is how to progress from behavioural targeting in a non-authenticated way, to a more authenticated way. To do this, the team had to decide where segmentation needed to happen – in the Sitecore platform, a DMP or a data lake.

“We ended up with an architecture that sees our content management usage consumption and data into a data lake, model all our segmentation in that lake, then we leverage Sitecore to take the data and display the experiences,” Troschke said.

“We wanted to make sure our segmentation goes beyond digital. This is because we want to ensure marketing automation activities are consistent, but also that our call centre activities can tap into that. Having a centralised segmentation platform helps achieve that.”

To reach this point, Contact heavily invested into development with partner agency, Cucumber, and technology platform provider, Sitecore. Cucumber, for example, led implementation of the website elements. However, Contact has opted to bring business-minded resources in-house to run programs.

Key skillsets for Troschke include design, content authoring, data and analytics, technology aptitude and good business smarts. “Finding those digital unicorns is really difficult. We found the best people have an ecommerce background, because they’re quite close to the data, or a customer experience background,” he said.

Up next: The results, plus the lessons for those still struggling to get personalisation projects off the ground

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The results

Highlight results for Contact include a 24 per cent increase in weekly join rates, and an 8 per cent increase in join conversion rates to 22 per cent. Net Promoter Score also improved to +44, and there’s been a sizeable reduction in cost of sales.

“A lot of our activities in doing personalisation also involves A/B testing, so we can work out what the true worth of activities is. That means the segment group gets tested against the former experience and we can track accurately. Conversion rates went up, and the cost per sale was reduced,” Troschke said

A program less easy to get over the line is self-service activations. Contact’s marketing team has been investing in mobile app and digital adoption campaigns, endeavouring to get existing customers to use digital channels.

“This was particularly interesting to sell into the business, as we needed to show the value of an app download, or customers using that. We worked with the finance teams to figure out what the benefit of a digital self-service customer to justify those activities,” he said.  

Getting started on personalisation

Cucumber digital experience business manager, Claire Stewart, said Contact is a great example of a client that looked at what personalisation could do first of all to drive quick wins.

“Often you’ll hear quick wins being made in the first 6-12 months, but I think you have to be realistic about what a quick win is. I do think Contact has been great at proving to the business the value of investing in personalisation,” Stewart said.

“The team has done this by using explicit versus implicit personalisation rules around geotargeting, and when a customer comes to the site X many times they’re shown this specific message. Doing that well, and proving those results, drives further investment into where Contact wants to go next, which is unlocking the data lake concept.

“I think Contact is quite mature in this regard, and it’s coming from the people and the thinking, with the technology behind it.”

While technology and data are clearly key to personalisation success, Stewart stressed the importance of people who understand how to make it work.

“Yes, you need a CMS that has the ability to personalise content, but you also need to think about what it is that will drive the most value for your business,” she said. “And yes, there is no shortage of data out there - we all have way too much data. It’s about understanding the value and the combination that is key here.

“Then it’s realising people still have to create that personalised campaign. There’s no algorithm yet that puts together the creative for that. There still needs to be people putting together that message and put it out there.”  

One important cultural element for Contact has been keeping customer service teams up to speed on how personalisation works.

“When a customer calls in and asks a question, the service team wants to know what’s available to them digitally. It’s not possible anymore when you have 50 different homepages. So keeping them up to date is a huge effort and finding ways that are comfortable to talk through what is a very dynamic website are important,” Troschke said.  

“Marketing also wants to present a new offer to everyone on the homepage. So when you take away that concept of a hero space, and make it so only those for who it’s relevant will see the offer, a lot of conversation needs to be had around reach and percentage of campaigns, versus conversions and impact. How you prioritise activations for a product launch or offer requires a totally different mindset, and also how you then structure KPIs.”  

Helping Contact refine and test audiences meanwhile, is an ideation phase, followed by the construction of ‘ghost’ audiences in order to test and define customer segment sizes for personalised campaigns.

“One of the dangers of personalisation is you can increase something massively on one side, but it comes at the cost of doing something different. There’s a balance that needs to be found,” he added.   

For those who haven’t yet embarked on personalisation or find themselves stuck on how to proceed, Stewart advised going back to customer research to make sure you understand who your audience is first.

What new machine learning capabilities like Sitecore’s new Coretex will then help do is take away some of the heavy lifting of making assumptions about the types of audience groups you should be targeting through more personalised programs and experiences, Stewart said.

“This machine learning can tell us combinations it thinks will work, that we may not have thought of. Hopefully that will reduce some of the human need because there’s a huge amount of effort required to do it at the moment,” she said.  

“I do think efficiency in data is where we’ll see the biggest gains from machine learning for personalisation based on where we are now and what we’re trying to do. Completely allowing a machine to make decisions is a long way away. But it will help us understanding that from 476 combinations, which one is going to make the biggest difference for the business.

“But the people element is never going to go away. I strongly believe you still need the human to look across what’s happening and confirm if you’re OK with those messages and segments and how the brand is being presented in market.”  

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