Essential.com Inc., Burlington, MA, a third-party buyer and manager of energy and telecommunications services for residents and small business owners, said this week that it is expanding a test direct mail campaign it began over a year ago in which it offered thousands of customers either a $50 or $100 check if they agreed to switch their energy services to essential.com.
The campaign, aimed at small businesses and residential customers in New York and Massachusetts – where essential.com offers the most services – will be expanded along the East Coast south to Washington in the next few weeks.
“We’ve been very successful with these campaigns,” said Ronan Winter, vice president of sales at essential.com. “By giving customers a gift, we are seeing response rates that are anywhere from 3 to 10 times the industry average.”
Essential.com sells local and long-distance phone service; electricity, heating oil and natural gas; Internet services; and satellite TV services. Unlike most residential utility companies, essential.com allows customers to pay their bills and analyze their service usage and plans on its site – in addition to allowing customers the ability to pay for their services with a credit card.
“We offer a one-stop shop, enabling people to purchase all of their utility services under one umbrella,” said Winter. “Customers can also consolidate all of their bills onto one statement, and then we send customers an e-mail that says their bill is ready.”
All of these features – in addition to the direct mail pieces – are some of the reasons customers are switching their services, said Winter.
They are also some of the reasons that deregulated utilities, or essential.com’s suppliers, are joining up.
“Deregulated utilities are looking for a more efficient sales and marketing channel to get to that residential, small commercial customer, and we offer them that opportunity through the Internet,” said Lou Desjardins, director of business development and energy services at essential.com. “They are also looking to us because our channel results in zero customer-acquisition costs for them.”
In both test campaigns, essential.com is sending direct mail to customers who have signed up for the company’s services, or prospective customers who have asked the company to alert them when energy services will be available in their area.
Essential.com also is sending the direct mail gifts to online purchasers who are also the heads of their households.
Winter added that cash is one of the best ways to motivate people to switch their electricity service because utilities are considered “a low-interest category, as opposed to other types of categories such as credit cards where people are particularly interested in savings on their annual percentage rate, so they change their services frequently.”
In the future, Winter said, essential.com is planning to develop several direct mail programs that may enable small businesses to switch services. For example, it may provide them with other services the company offers such as high-speed Internet access free of charge for a particular period of time if they use essential.com as an energy or telecommunciations provider.
However, “we have found that with our consumers, the cash offer is the most attractive,” Winter said.