Three years ago, Mike Garnham’s view of the business flowing into
field marketing from the newly deregulated utilities companies was that
it was a welcome but short-term bonus. His advice to fellow field
marketers was ’enjoy it while it lasts’.
Today Garnham, managing director of Headcount Worldwide, is more than
happy to acknowledge he got it wrong. As a sector it has gone from
strength to strength. According to Marketing estimates, it has grown by
35% in the past year, to the point where it has edged ahead of alcoholic
drinks in terms of its importance as a source of revenue to the
One in three field marketing companies in the league table now has some
involvement with utilities. Having said that, the work is concentrated
mainly among the top seven, where it commonly accounts for 10%-30% of
turnover. An exception to this is second-placed FMCG, for whom the
utility companies have never been a major source of revenue.
The boom came about unexpectedly. In their race for customers, the
utilities companies started using freelance sales people, often on a
commission-only basis. Industry regulators began to express concern at
cowboy sales tactics, and some of the wiser utilities companies also saw
the danger posed to their brands.
Step forward the former Field Marketing Association, now superseded by
the Direct Marketing Association’s newly formed Field Marketing
FMC chairman Alison Williams played a major role in persuading industry
watchdogs that field marketing had the recruitment, training and
management skills to tackle the job professionally.
The breakthrough also alerted the field marketing industry to the
potential of home calling, which opened up other opportunities in
satellite and digital TV, financial services and home computers.
However, extending field marketing into home calling has not been
entirely straightforward. Bob Gill, chairman of GSD, points out that
utility clients had to be persuaded that if they wanted the agencies to
invest in high standards of recruitment and training, they had to share
This meant moving away from a system of paying only for successful
GSD works on a cost-plus basis. Some of its competitors get a basic fee
plus incentive payments based on results.
Whatever the system, Gill says the need is for professional and
responsible sales people, rather than pushy, hard-sell types. He aims to
recruit people who can see this kind of contract providing a sound
foundation for a career in sales.
’It isn’t easy,’ he says. ’When you arrive on the doorstep, you haven’t
been invited, and there can be a high level of rejection. We are now
telephoning and making appointments beforehand. It adds to the cost, but
it does mean there is less chance of a bad reaction from the
householder, and a much better chance of a sale.’
Gas and electricity suppliers use other techniques as well, such as
direct mail and telemarketing, but data suggests that customers signed
up after a face-to-face chat are less likely to defect later.
Garnham also points out that sophisticated targeting helps field
marketing companies select the consumers most likely to convert.
Utilities are even attracting new players among field marketing agencies
that were previously wary of at least some aspects of the business. For
example, Marketing Dynamic International has run stands for Scottish
Power in shopping malls for some time, but initially shunned the home
’I was sceptical about door-to-door,’ says the agency’s managing
director Paul Narraway, ’but we have made a start, and for the right
product, with the right people, it works.’
Similarly, Aspen joint managing director Gary MacManus acknowledges he
was ’anti-utilities’, but has changed his stance. His original
objections were based on the importance of door-to-door campaigns in the
sector, generally involving evening work, which did not sit comfortably
with Aspen’s strategy of only employing full-time staff.
’But I’m in favour of utilities now,’ he says with a smile. ’That’s
because they are talking to us about putting business-to-business teams
on the road. The heritage of field marketing is in fags, confectionery
and soft drinks, and they still represent the major share of spend. But
my prediction is that, with the continuing growth of the multiples and
decay of the independents, areas such as utilities, telecommunications
and computers will soon equal them.’
MacManus’ revelation that he is talking about business-to-business
contracts is an indication that the utilities sector may be
’I believe we are still in the customer acquisition phase for the
utility companies,’ says Mike Hughes, commercial director at CPM. ’I
don’t think anyone has really started to use field marketing for
customer management, but that will be the next development stage.
’In the not too distant future I think there will be four or five major
utilities clients, and a long-term role for companies like ours,
operating on a combined customer acquisition and management
There are also other issues to be faced. Before long, it is possible
that utilities companies could be offering a combined service of gas,
electricity and water supply. But the terms offered to an individual for
supplying power also depend on evidence of their previous buying
With a portfolio of products to sell, points out Williams, ’you could
require so much information, you could be there with one family all
Her colleague, client services director David Overington, agrees. ’I am
not convinced there is an infinite number of products you can sell on
the doorstep,’ he says. ’I think you could lose credibility.
’What I can see happening instead is that you come with a set of
products that stack up in the consumer’s mind as being related. And then
you can come back with secondary products at a second and third stage,
once you have built a relationship.’
’In expenditure terms, utilities is a major part of field marketing at
the moment, with no signs of decline,’ concludes Hughes.
’I see a long-term role for field marketing, especially if it is
combined with telemarketing. The constraint is our ability to retain
door-to-door sales people.’