Viridian Energy: Unreal Savings

"SAVE MORE THAN $1,200" but not for sure

This article from retailenergyx.com discusses a direct mail offer from Viridian Energy. It is the type of marketing solicitation that I consider a Fail for Creative for being misleading.  

A bit of context: National Grid is a utility in parts of New York, Rhode Island and Massachusetts. As the utility, they maintain the power lines and are the basic supplier provider for electricity. As described on their site, National Grid adjusts their prices every six months in Massachusetts using a regulated formula. As this chart shows, in the coming six months, their supply price will increase by 97% to reflect current and anticipated supply costs, and that price will last for six months. After that, it could decrease back to the historical averages, or not. The price for the next six months will be over 16¢/kWh, while the last time the price was above 12¢/kWh was in 2009.

Are these the questions you would ask?

The direct mail offer from Viridian Energy touts the National Grid rate increase to 16.18¢/kWh as a reason to switch to their rate of 11.99¢/kWh guaranteed for 36 months. This is where the misrepresentation starts. Headline-level copy in the sidebar touts “SAVE MORE THAN $1,200 OVER 3 YEARS!”* That type of claim assumes that the National Grid Basic Service Charge will not change during the 3-year comparison period – but it will change. The Basic Service Charge changes every six months. So the touted $1,200 savings may be nearly zero.

Yes, Viridian explains this a bit in their disclaimer*, and they even throw in the mutual fund prospectus favorite line “Past performance does not necessarily predict future results.” But they hide this in the disclaimer, suggesting it was a misleading claim. Most consumers will scan the claims in the Johnson Box, headlines, and sidebars to determine if they are interested. They will read the $1,200 savings message, not the disclaimer that notes lack of validity.

There are other relevant facts to this offer missing from the headline and body of the letter:

• The so-called “clean electricity” is not completely clean. Their disclosure explains that it has 50% renewable energy in addition to state requirements. Nice, but that could still mean a sizable percentage of fossil fuel generation.
• If a customer signs up for this 36-month offer and later decides to cancel – perhaps because the National Grid Basic Service Charge returns to normal rates in six months – there is a $50 early termination fee. That is not disclosed anywhere in the letter. Perhaps this might be excusable if the call to action were to get more information, but the call to action is to “make the smart choice,” i.e., sign up for the offer. At the very least, it could have been included in a disclosure.

Direct mail solicitations like these give the industry a bad name.

Lesson: Disclose the specifics of your offer and relevant comparisons in a clear, concise, communicative manner. If you have to use a disclaimer to explain why your claim is not fully valid, consider your moral values.

* Many people mistakenly refer to the small print associated with marketing communications as a disclaimer, when, in fact, much of it is a disclosure. According to dictionary.com, a ‘disclaimer’ is “the act of disclaiming; the renouncing, repudiating, or denying of a claim; disavowal,” while a ‘disclosure’ is “the act or an instance of disclosing; exposure; revelation.” ‘Disclose’ is defined as “to make known; reveal or uncover.” From a marketing standpoint, a disclaimer is an admission that the headline is false – otherwise, why renounce it? However, a disclosure provides secondary but relevant facts of an offer. So the only reason an offer or marketing communication would require a disclaimer is if it was misleading from the onset.

Citi aspires to list fail

I received this email from Citi today, reminding me that I still have the opportunity to spend enough on my Hilton HHonors Reserve Visa Signature Card to achieve Diamond status in the Hilton HHonors program.  However I met the spend level. 

This Fail for List might be forgivable if I recently met the threshold.  After all, there is a lag time between when an action takes place and customer's information is updated as there is between when a list is pulled and used for direct correspondence.  However I met the spend requirement in March -- a full 5 months ago.

Lesson: Be sure your contact list is based on accurate information.






Disclosure: I used to work in Citi's Bankcard group, although I was not involved with the HHonors credit card portfolio.

Not So Free Parking at Newark Airport

Solicitation email

This email offering a free day of parking is a Fail for Creative. 

The email subject line reads “Get 1 Day Free at EWR & JFK”. The content of the email also touts enjoying “1 day of free parking at Newark Liberty & JFK airports!” It is not until the reader prints the coupon that he or she discovers that the free day has strings attached. The customer must park at the airport for 3 or 5 days to obtain the benefit of the free day.

Coupons with conditions

Ideally, the headline of the email should include the contingency of the offer, i.e., “Get 1 Day Free at EWR & JFK when you park 5 days.” If not, then the body of the email should include an adequate disclosure or at least reference the contingency of the offer, i.e., “See coupon for details and conditions,” “Minimum parking stay required,” or a similar message. But, even in the fine print, this email does not include a mention of the minimum parking requirement.

When a business sends offers where the conditions are not clearly communicated, it not only degrades customer trust and brand equity, it is often a violation of Federal Trade Commission rules.

Lesson: When presenting an offer, communicate the requirements for your customers to benefit from the offer upfront and clearly.

Fine print - no mention of minimum parking requirement

PayPal: Great for payments, Fail for mail

Blind envelopes sometimes offset lack of known brand to improve open rate

I recently received a letter in a blind outer envelope. The only hint of the mailer is the postage indicia from "LFS, Inc." The inside of the letter describes my opportunity to pay for some purchases over time with Bill Me Later® because I am a "Continental" customer. 

This letter has several Fails for Creative:

• Copy is full-justified, making it difficult to read.
• All copy is the same font size, including the 9-line disclosure. The only use of boldface is for required legal copy. This makes the letter impossible for a customer to scan.
• The entire letter is one color, with a logo that appears to be produced on a dot matrix printer.
• The call to action is difficult to comprehend. Is it to request an account as mentioned in the first paragraph, place an order with a merchant as mentioned in the third paragraph, or go to their website?
• The word "on-line" is hyphenated. While this is grammatically acceptable, it isn’t a stylistically common usage in consumer communications, potentially distracting readers.
• The offer is good through "December 05, 202011." A date before the 10th of a month should not have a zero in it, and "202011" is not a real year. Proofread your materials!
• Every mention of Bill Me Later® includes a registered trademark in superscript. Legally, the registered trademark is required only in a company's first mention in body copy. Also, superscripted text interrupts eye flow and should generally be avoided.
• Some of the copy is pedestrian. For example, in the third paragraph the customer is asked to place an order for "an amount not exceeding your pre-approved amount." Huh?
• The letter has a signatory but no signature. This further suggests that it is an impersonal form letter and the company is not caring of the customer.

Hard to scan + Hard to read + Hard to understand = Hard to believe

On the whole, a letter like this will fail to inspire consumer confidence or interest in Bill Me Later. It is a challenge to believe that something is "convenient and safe!" when the sales letter is poorly written and has errors.  Even letters from the federal government look better than this.

PayPal could improve a one-page solicitation letter in many ways, including:

• Adding color to the package.
• Positively branding the envelope as from PayPal, a trusted brand, with the PayPal logo.
• Using balanced and varied typeface sizes.
• Adding a Johnson Box.
• Including subheads before paragraphs.
• Italicizing relevant URLs.
• Not going into detail about why I was preselected, or at least being correct about the company name.
• Using full dollar amounts and avoid decimals, e.g. "$5,000" rather than "$5,000.00".
• Including a signature with the signatory.
• Proofreading lettershop samples and verifying data field formats.

Lesson: There is so much wrong with this solo letter package that the lesson here is simple. Don't waste a valuable brand to send poor mail like PayPal did.