From a tiny player in Burlington, Vermont to
the #1 deregulated energy brand in America

Background

• 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.

Diagnosis

• Among the general population there is widespread ignorance about how electricity is generated and the environmental consequences of power generation.
  
  
• 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 sources.

Strategic Research

• 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.

Strategic Options

• 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.

Strategic Choice

• Kevin Hartley, VP for Marketing decided to target the brand against upscale “Green” households willing to pay more for “Clean Green Power.”
  
  
• 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 kidding!”
  
  
• Go to market using heavy television, print, radio and direct marketing efforts.
  
  
• Employ marketing experiences such as concerts and other events to add luster and personality.

Performance Results

• 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.