Octopus Energy on compassion versus the algorithm
Rather than make a quick buck poaching new prospects, Octopus Energy used lockdown to reassure existing customers with interactive tools and targeted messaging. Here’s why it paid off in the longer term...
The marketing industry can tie itself in knots trying to define exactly what performance marketing is. But with refreshing clarity, Octopus Energy marketing boss Rebecca Dibb-Simkin boils it down to a question: “How does marketing perform?”
“It’s really weird that we have all these terms that we don’t quite understand,” she says sitting down with Performance Marketing World to reflect on lockdown, the distinction between brand and response-driven advertising, how treating customers with decency can be great for acquisition and how sometimes it literally pays to bypass the algorithm.
The fact that Dibb-Simkin’s title at Octopus is product and marketing director speaks emphatically of the importance with which the company views bridging the gap between the thing you’re selling and the way you market it.
She offers a quote that condenses that mindset: “‘’The aim of marketing is to make selling superfluous’. You create something awesome and then you talk about it so that people just want it.”
On the other hand, there’s marketers doing it badly. She cites a former employer, a company that had a “shit product and a shit customer service… and then you’d be asked to go and flog it”.
“You put a logo on some pens, you do some more TV advertising and then people will [hopefully] buy it.”
At Octopus, things are done differently: it all starts with the product. “I actually want to build the thing that I'm then talking about with people,” Dibb-Simkin says. “At Octopus that’s what I do - look after everything, the whole proposition. The comms bit is just the end bit.”
Brand, PM and somewhere in between
Octopus Energy was founded in 2015, and Dibb-Simkin has been there since April 2017, but it’s only recently that a line has been drawn between brand and response, or ‘Performance Marketing’ (PM).
“This year my budget has been split into brand and, I suppose, performance, or direct marketing,” she explains. “That's actually because you can account for spend that's specifically mapped to a customer, you can capitalise differently in the accounts. So you go ‘oh this much money was spent on this many customers’.”
Transparency should not just apply to accounting lines, but to the process and messaging of marketing itself, she argues – “hidden behind all these buzzwords is a human trying to sell something to another human”.
“I think a lot about what humans will do,” she says. “And I think at the beginning of the pandemic, it was like, first of all, this isn't a golden opportunity for us to get more customers, the primary focus for us as a team is to look after the customers we'd already got.”
Lockdown kicked in, everyone was suddenly stuck at home and Octopus ran some research which showed that “all the other big energy suppliers literally stopped answering the phone apart from for emergencies, and then you were lucky…”
The reason for this communication breakdown was that the traditional players’ staff and systems were based in call centres, locations suddenly off limits.
“During the pandemic, we weren't in to make a fast buck, we were there to look after customers.” Thus reassuring worried people became central to Octopus’s messaging, whether they were furloughed or had lost their jobs.
Dibb-Simkin and her team built an interactive tool that enabled concerned customers to explain their situation and ask for help, because their income had dropped or they were worried about escalating energy consumption and rocketing bills.
Once an individual had entered their details, a human at Octopus would make an assessment. In 90% of cases worries were appeased. In others, Octopus suggested ways of bringing down direct debit payments, while agents were even given authority to write off some debts incurred by those hit hardest.
This tack proved fortuitous for reasons other than helping consumers directly.
“At the same time, that kind of tool helps steady the inbound on the phones, because if someone emails and you respond quickly, they don't need to call,” Dibb-Simkin says.
“So, because of that, we were then running analysis on how we were performing on the phones and our NPS [net promoter score - a customer satisfaction measure] actually went up at the beginning of lockdown because we were answering the phone and people knew other companies weren’t.
This happened before Octopus took to using Facebook ads to tell consumers it was picking up the phone. “But I don't think we ever used [this messaging] on other channels, because I felt that Facebook is where we have a lot of existing customers and if we started using it in display… in display we will block out where we can anybody who's an existing customer…
“I think it was a bit uncool to talk about how well we look after customers in a pandemic to try and get new customers. It feels a bit immodest. I’d rather let our existing customers do it.”
Out the other side
As lockdown eased and society started venturing beyond their front doors, it was the energy market’s switching season, where consumers look for better, more competitive deals with suppliers.
Dibb-Simkin’s focus on looking after its customers during the pandemic paid off. In a single month, around a fifth of all consumers switching suppliers opted for Octopus – “a huge amount, even though we weren't the cheapest (because whenever you’re the cheapest, we think it's unsustainable)”.
There’s a misconception that performance marketing in this digital age, it’s all about noughts and ones driving acquisition. Octopus’s more compassionate approach clashes somewhat with that notion.
“About 50-55% of our direct traffic is referrals, which is someone telling their mate,” Dibb-Simkin notes. That’s hardly a realm populated with AIs and algorithms.
And not only that - “referrals are stickier”, she says. “They tend to stay with us longer. They become better customers.”