From a tiny player in Burlington, Vermont to
the #1 deregulated energy brand in America
- The American electric power industry is going the way of
telecommunications—deregulation is coming!
- The existing paradigm believes electric power is a
commodity, where price is the only attribute of importance.
- A small energy company in Burlington, VT, decided that it
wanted to become the first company to brand kilowatt hours
and, thus, take a significant share in this emerging market.
- Among the general population there is widespread ignorance about how
electricity is generated and the environmental consequences of power
- Consumers can and do place significant value on attributes other than
price, in spite of the fact that they have been taught by regulators and
utilities that price is all that matters.
- There are segments of consumers that are willing to pay a premium
above the price they currently pay for electricity produced from benign
- Green Mountain Energy undertook a series of studies to identify the most
profitable residential and business targets to pursue, how to position their
brand, and what products and services to offer.
- This work assessed consumer interest in an environmentally friendly
positioning compared to 10 other strategies and buyers’ willingness to pay
more rather than pay less for energy services
- Price testing, advertising testing, direct marketing testing and simulation
modeling were done to execute more efficient strategies.
- Follow an undifferentiated “commodity” approach—selling electricity at the
lowest possible price.
- Exit the retail electricity business in favor of the distribution side.
- Identify a segment of the market that is willing to pay a premium price for
electricity and position the company’s offerings based on the key
attributes and benefits deemed important for this segment.
- Kevin Hartley, VP for Marketing decided to target the brand against
upscale “Green” households willing to pay more for “Clean Green
- Position it as “clean, green power, made from the raging rivers of North
America, the prevailing winds and the sun. No coal, no nuke, no
- Go to market using heavy television, print, radio and direct marketing
- Employ marketing experiences such as concerts and other events to add
luster and personality.
- GME became the #1 brand of deregulated power; awareness and
positioning were unchallenged in the markets in which it competes.
- Awarded the prestigious prize for excellence in marketing, “Marketer of
the Year” by The Financial Times, competing against companies more
than 1000x its size and achieved preeminence among environmental
thought leaders and regulators.
- The company was deluged with requests from businesses including
Toyota, General Motors, Kinko’s, and The Gap.
- BP was so impressed, it bought a major stake in the company and
Hartley became a business legend.