Momentum Energy
Momentum Energy were seeking to bolster in-market proof points to retain their position as a trusted green energy partner with customers. Momentum Energy embarked on developing a green product roadmap aligned to a new retail strategy, aiming to drive customer centricity, revenue diversity/growth, and increase organisational agility while still navigating the complexity energy transition.
Date
Oct 22 - Mar 23
Client
Momentum Energy
Services Delivered
- Qualitative & Quantitative customer research
- Product strategy development - New product portfolio development
- Customer proposition testing with experimentation - Feasibility assessment - Commercial modelling - Product roadmap development
The business opportunity
Momentum Energy is the retail business of Hydro Tasmania, servicing Residential, Small and Medium Enterprise (SME) and Commercial and Industrial (C&I) customers in VIC, NSW, QLD, SA, and ACT. Hydro Tasmania is Australia’s largest generator of renewable energy, supporting Momentum Energy market position as a trusted green energy partner.
With a new retail strategy to focus on new segments, Momentum Energy required a new product strategy and roadmap to support customers in their decarbonisation and net zero journey, establishing Momentum Energy as a leader in the energy transition.
The new product strategy and roadmap was to help:
Develop proof points for Momentum Energy to become a trusted green retailer, growing their credibility as a renewable energy leader
Grow Momentum Energy’s Revenue and Margin in key segments aligned to the new retail strategy & develop new product revenue streams
Accelerate Momentum Energy’s capability to integrate customer insights and learnings into strategic and operational decision making
“I don’t think there’s any debate that we’ve seen material benefit and value in working with First Principles on this piece of work. I’m confident the outcomes of this project will move us in a strong direction going forward, and will allow us to move faster and with more confidence. I’m really proud to talk about the customer led experimentation approach we’ve adopted on this project and will continue this at Momentum Energy as a direct consequence of learning through this engagement.”
Lisa Chiba
Managing Director
The Solution
Achieving Momentum Energy’s business ambition required a delivery framework to achieve validated insights in a short timeframe.
The approach combined Qualitative and Quantitative customer research, in conjunction with in-market Experimentation, ensuring that customer insights were integrated into the development of new product offerings throughout the end-to-end project lifecycle.
There were four phases of the project:
Discovery & insights – understand the customer, market needs and problem identification
Define & hypothesis – leverage insights to inform product proposition development
Develop & iterate – develop, test, and iterate solution designs
Readiness & rollout – turn research findings into an actionable product strategy and roadmap
Discovery & insight
Conducted nine interviews with senior leaders to understand business ambitions, where to play, how to win and organisational capabilities
Conducted discovery research of existing literature to understand current trends, insights, market sentiment and competitor offers around “green energy”
Quantitative online survey was conducted amongst n=816 Australians aged 18+ representing SME and Residential energy decision makers, validating views on green attitudes, beliefs and drivers to inform the next phase of the program
Define & hypothesis
Synthesised discovery research findings – identification of customer value drivers and motivations
Developed Product Strategy Framework (working hypothesis) – highlighted the key strategic focus areas for Momentum Energy, indicative product offerings and the internal or external capabilities needed to succeed. This framework was the ‘guard rails’ for the program
Develop & iterate
Ideated a long list of 71 growth opportunities for Momentum Energy across Residential, SME and C&I customer segments
Screened and prioritised 35 growth opportunities in line with the Momentum Energy’s strategic growth pillars
Devised Functional Product Descriptions, Customer Value Propositions and Jobs To Be Done for the 35 prioritised opportunities
Conducted online Customer Co-Design Forum to explore customer sentiments and attitudes towards the proposed set of new green energy products. Qualitative customer feedback and quantitative measurements were captured (24 concepts were evaluated based on (1) appeal of the concept and drivers of appeal (2) purchase interest (3) credibility and believability for Momentum Energy)
With the Momentum Energy Product and Marketing teams, formulated 11 new, innovative Residential and SME product propositions for experimentation – offer framing, messaging, product features / benefits, pricing etc.
Readiness & rollout
Feedback from the Customer Co-Design Forum was fed into the experimentation process
All retail propositions were further refined and optimised based on learnings and insights from the customer experimentation process
A series of capability workshops were held with Operations teams to determine how the new products could and should be executed – internal build, buy from vendors, or outsource the delivery to a third party partners
Completed high level Cost-Benefit analysis of the concepts with the Commercial Team to support prioritisation and sequencing of the propositions for the roadmap
“First Principles led experimentation for this project, testing new product and service offerings with prospective customers. Through the experimentation process we gained real insights into customer wants and needs that played an important role in determining what was prioritised on the product roadmap”
Cam Taylor
Senior Product Manager
The results
Momentum Energy has a clear product strategy and portfolio of customer validated propositions to support their position as one of the top ‘sustainable’ energy retailers in market
Momentum Energy has a blueprint and rollout strategy to sequence / implement all initiatives over the coming 3 years
The proposed product set of 24 new offers is estimated to drive $8M+ incremental Revenue
33% of the new propositions are adjacent to core energy and not subject to market volatility
Momentum Energy now possesses the capability and skills to better integrate customer insights into their product development process to make better decisions and investments
Key takeaways
Modular building blocks
Customers require logical, modular product building blocks that can be progressively layered over time to support households on their net zero journey. Provide easy, low-cost on-ramps for customers to make a start, with a view to progressively scaling investment in the green home ecosystem in the future. Cost is the biggest barrier to uptake of green energy solutions.
Educate the marketplace
The retail energy sector is notoriously complex and confusing for customers. The green energy transition is challenging for customers to comprehend, and energy retailers to communicate. Educate and inform customers with simple, clear messages to demonstrate leadership in the green energy transition.
Timing is everything
Green product offerings need to be carefully timed to collide with increasing market demand and government policy drivers. Some offers (electrifying the home) currently require significant capital outlay from homeowners with a debatable ROI. As such, demand for these types of offers is currently low.
Saving money
The main customer driver for taking action on green energy products is saving money. Linking the benefit of saving money through energy efficiency is important to communicate on green products which will resonate with both SME and Residential customers.