Marketers hoping to capitalize on the deregulating energymarketplace would be wise to examine the strategies used in otherderegulated businesses, according to a paper by The Paladin Group.Paladin said energy marketers could fail by repeating mistakes ofthe past.

The “three classic mistakes in deregulating markets” are: Movinginto deregulating markets without knowing the costs of sales andservice; Mistaking advertising for marketing; And building orexpanding expensive direct-sales forces in markets that requirelow-cost channels of distribution.

Paladin advises marketers to “be selective – choose prospectswith care.” The group said most prospects in deregulating marketsare, in fact, not profitable. Big industrial customers use theirclout to bargain for deals that leave little room for marketerprofit. Little residential customers don’t use enough energy tocover costs of advertising, direct sales, and supporting systemsand personnel. Most prospects never become customers, Paladin said.”It is still amazing to us that most of the country took over 10years to seriously consider leaving AT&T for a cheaper longdistance supplier.

Paladin advises market segmentation and careful targeting ofmarkets are essential for success. “Several models for simple,successful segmentation exist in other deregulated industries anddata exists to develop a model for retail energy prospecting salesand service management.”

Early recognition of the right market opportunities, followed bya highly focused sales effort, can result in substantial front-endprofits and a significant competitive advantage. “Timing iscritical in a competitive marketplace,” says David Francis, aPaladin Group senior partner. “Those who recognize this and stepout aggressively with the right strategies and programs will findthemselves in a position to acquire and keep profitable marketshare.”

Paladin discusses approaches that utilize sales and servicechannels proven to be productive in capturing and retaining earlymarket share. Integrated, low-cost marketing programs, aimed at themost profitable customers and prospects, is a key ingredient towinning in highly competitive market share. For more informationand a copy of the 12-page report, call Paladin, 816-941-3514.

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