Before restructuring and partly deregulating its electricity market in 2002, Texas offered consumers limited options in choosing their retail electric provider, due to local monopolies. After deregulation, marketers needed to step up their efforts, thanks to increased competition from a variety of electricity service providers and newly savvy comparison shoppers.
Reliant Energy, a Houston-based company that provides energy services to about 1.8 million customers in Texas and the Mid-Atlantic states, began to look for new ways to woo customers after deregulation. “Consumers [now had] a choice of what electric company they wanted to buy electricity from,” says Sicily Dickenson, Reliant’s director of online marketing.
An additional challenge was that Reliant is limited to servicing certain areas within the Lone Star State. “Essentially, each electric company gets ZIP codes it can service,” explains Ashwini Karandikar, VP of client services for Range Online Media, a search and interactive marketing firm that has worked with Reliant since 2006. The offers that companies can provide in each area may be differ due to state regulations, she adds.
A deeper level of targeting
In order to ensure that it markets strictly to those customers residing in Reliant-serviced ZIP codes, the company now uses geo-targeted search engine marketing to acquire new customers — as well as to retain existing ones.
Geo-targeted search is practiced by serving pay-per-click ads to users based on their location (usually determined by IP address), or if users include the name of a targeted location within their search request.
Companies wanting to adapt ad copy for different geographical areas – to better appeal to a given locale’s consumers – can benefit from geo-targeted search, says Reid Spice, director of paid search strategy at iCrossing, “because you can structure your ad copy to speak to the local market. That can improve your click-through rates and conversion rates.”
Companies with bricks-and-mortar retail locations also use geo-targeted search to help coordinate promotions within certain regional areas.
“Geo-targeted campaigns can provide one level deeper of targeting,” agrees Rob Murray, president of iProspect. The only challenge is that search engines cannot always uniquely identify someone by their IP address. “That’s just a limitation to think about — it’s not a reason to not do it,” he emphasizes.
The downside, however, is that you’re taking your target and slicing it down to a fraction of what it would be nationwide, Spice points out. Geo-targeted campaigns also don’t generate a lot of data. “If you’re doing any sort of testing, it takes much longer to get the statistics,” he says.
Still, more search marketers are using geo-targeting to reach the right consumers at the right time. “We use geo-targeting more now than we did in the past, and the ways in which we use [it] have become much more sophisticated,” Spice says.
For companies like Reliant, which are limited to servicing specific areas, geo-targeting clearly makes sense. Movers, for example, are one of the biggest target audiences for Reliant, according to Dickenson. “We know there are a handful of things that really put people into a shopping mode — one of them is they’re going to move,” She explains. So the company runs pay-per-click ads for users who search for key terms like “moving to Houston,” or “real estate agent,” within a specific ZIP code.
Rather than going to Reliant’shome page, these customers are directed to the company’s newly launched Move Center microsite at www.reliant.com/movecenter.
“The site has [more than] 150 pages of content, focusing on where you are in the moving cycle,” Dickenson says, as well as a downloadable “move reminder” widget, and e-cards users can send to their friends and family to let them know their new address.
The microsite content has also improved Reliant’s organic search rankings for moving-related keywords. Dickenson says, “Not only are we buying those terms, but we’re seeing ourselves come up more often in natural [search].”
Reliant also has landing pages tailored towards prospective and existing customers. For example, Range helped Reliant create a place for its customers to visit where they can download energy and savings tips.
People often change electricity providers during the summer, as electric bills rise. Reliant uses various offers in its advertising to attract those concerned about cost, says Dickenson.
Over the last six months, Reliant has begun honing its search results. “We’ve seen our new enrollments on the Web site increase by 72%, and our conversion rate has gone up 60%,” says Dickenson.
Search aligned with other channels
She ascribes this increase not only to search, but to display advertising and such offline marketing channels as direct mail, TV, radio, billboards and outbound telemarketing. The key is checking that all messaging and campaigns are aligned.
“One of the only ways to get [search volume] to increase exponentially [is] to also run display,” she says.
Each time that the company has its messaging and campaigns aligned — including its offline channels — there’s a huge lift, she adds.
Because search is Reliant’s lowest-cost channel of acquisition, the company wants to grow search volume as much as it can, Dickenson says. When compared to a direct mail campaign that can run about $250 per acquisition, the typical cost per acquisition for a search campaign is about $30 to $35, she says. “Search is our lowest-cost channel,” she says.
Working with Range has allowed Reliant to both try new things and optimize efforts already in place. She reiterates that geo-targeting allowed Reliant to target service areas and address the needs of prospects.
“What we’ve seen this year is an unbelievable incremental increase [in revenue],” Dickenson says of the campaign’s results.
