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You should buy electricity just like you buy milk!

Well, maybe not exactly. But the similarities beg for a deeper assessment.

Common sense tells us that choosing a new electricity supplier isn’t the same selection process as choosing what store from which to buy our groceries. But at the core of it the two purchasing decisions are practically the same. You choose between Jewel, Dominicks, Whole Foods or Trader Joe’s because you have a perception that your money goes further in one, you get better quality in another or you get more organic produce in yet another. Deregulation enables customers to choose which supplier provides them cheaper electricity, renewable energy or 24/7 customer service (all choice determinants). In both cases the benefit derived from the product has more to do with the ‘satisfaction’ you get from that product than from whom or where you buy.

(Sidenote: Measuring what is important to a customer gets missed by marketers as this fab post by Jonathan Fields shows http://bit.ly/dBLYXy).

According to research (1) the purchase decision goes something like: you recognize you’ve run out of milk and start to search for/decide on where to buy. Next you decide whether you want to go cheap or buy lactose free. Then you buy (lactose free for me). What is called the ‘post purchase assessment’ closes out the process.

In the above you could easily replace milk with electricity. They are actually both considered as convenience products but there are some peculiarities that complicate the electricity purchase decision (but do not change the classification of electricity as a ‘convenience’ product):

  • Technically you never run out of electricity (hence no need is clearly identified unless the suppliers promote)
  • Alternatives have been difficult to assess as the options are not available in one location (and electricity is a mundane product that, honestly, not many people are waking up searching for)
  • On finding options for a new electricity supplier there is no urgent need to make a decision as you do not lose your current supply (unlike when you don’t buy fresh milk. Monumental disruptions occur to my day when we run out of milk).

These peculiarities make for a tougher pitch when we try to make customers aware of the derivable benefits from shopping around for electricity. Nonetheless we tout the benefits of lower utility prices, increased awareness of what your options are for electricity and access to green energy whenever we get a call from a client. Taking advantage of these benefits make for a post purchase assessment that leaves our current clients in a much better frame of mind about their decision than what most customers get with other utility industry interactions.

What reservations do you have about switching your electricity to a less costly or greener electricity supplier?

Reference (1): Consumer Attitudes to utility products: a consumer behavior perspective. Ann Watson, Howard Viney and Patrick Schomaker, Marketing Intelligence and Planning, 7/20/2002

Photo courtesy:

© Daniel Steger (SuperContributor), ‘Cows, Engstligenalp

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