3 min read
October 26, 2010

The Press, October 2010

New Zealand has its own ‘mad men’ of marketing.

Not a fancy advertising agency staffed by super-smooth Don Draper-types lolling around drinking martinis, but a young Canterbury company called Energy Mad, that has achieved incredible growth on the back of some real marketing smarts.

Energy Mad’s story is just as dramatic as the popular Mad Men TV series, it being a rollicking roller-coaster of a tale of rags to riches, to (almost) rags again and now coming back to riches.

It goes back to 2004, when a couple of university mates from Christchurch called Tom Mackenzie and Chris Mardon decided to get into the low energy light bulb business. No matter that it was then dominated by companies like Osram, General Electric and a little Dutch company called Phillips!

Energy Mad was formed with a compelling vision i.e. to sell enough bulbs to “save all the electricity used by Christchurch homes,” measured by getting five of their eco-bulbs into each New Zealand home.

No mission statement mumbo jumbo for these guys, no ‘we strive to be the leading supplier of high quality low-energy use bulbs in New Zealand’. Just an excitingly ambitious, but measurable, goal.

A target they thought might keep them busy for years, took just three.

This achievement is reflected in growth that put them at the top of the Fast50 index in 2007 with annual turnover increases in the thousands of percent, and millions of bulbs in Kiwi homes. Around 80 per cent of Kiwi homes now have some energy-saving bulbs, three-quarters of those households with Energy Mad’s Ecobulbs.

The Energy Madmen were on fire, growing like topsy and expanding into new ventures like energy-saving consultancy, and projects in new markets all over the world.

Then they ran into a brick wall in the form of the global downturn and a nervous bank.

According to company statements, Energy Mad’s bankers got nervous during the global financial crisis (GFC), demanding repayment of a multi-million credit facility. Company advisers told the owners they’d had a good run, but they should pack it in and polish up their resumes.

Never ones for conventional business wisdom, Energy Mad forged ahead, negotiating a short extension with the bank and beseeching their major customers to stuck with them.

As co-founder Mardon said in The Press earlier this year, ‘‘Essentially we went through most of 2009 struggling with survival while doubling our revenue at the same time. It was a useful lesson for us to go through. It focused us beautifully on what was really important.’’

That  focus included reducing the number of markets they were active in, concentrating on New Zealand, Australia and the USA, rather than chasing every project they could in all kinds of countries.

This was smart marketing move number one, resisting the challenge to grow by taking on any opportunities, and using their scarce resources for markets they could get the best traction in.

The other brilliant element of their Mad marketing is creating what they call ‘business cases’ for customers. Energy Mad’s ability to create these business cases is more important than their ability to make clever light bulbs in their big Chinese factory.

If being brilliant at making light bulbs was all they could do, it wouldn’t have been enough to so comprehensively defeat huge companies like Philips in the New Zealand market. Energy Mad have grasped the elusive marketing truth that business success is not about what you produce, but what you deliver for the customer.

In the Energy Mad Men’s case it was their ability to create value not only for the end customer in the form of cheaper-to-power bulbs, but creating wins for the links in the chain of supply.

For the power companies that help push their Ecobulbs, Energy Mad offer a way of reducing the amount of costly energy they need to generate, as well as enhancing their reputation with customers. For retailers like supermarkets and service stations, Energy Mad help them run very effective marketing campaigns focussed on the Ecobulbs that deliver more consumers through their doors.

After a tough 2009, the company seems ‘re-energised’. Their initial mission realised so quickly, Energy Mad they are now motivated by the aim of saving enough energy to power Europe.

This has seen them on track for revenue of over $22 million this year, helped by some major new projects in Australia and the US. The latter includes a deal in New York that shows the hallmarks of the Energy Mad approach.

Working with a large drug store chain, and the state energy efficiency authority, they are supplying their bulbs to New Yorkers with the aim of “saving enough energy to power Yankee Stadium for ten years”, according to a statement from the company.

It’s a great outcome for an organisation that came close to being a victim of the GFC, and a reflection of the fact Energy Mad understand they are far more than simply makers of cleverly designed light bulbs. More mad men of this ilk, rather than the Don Draper type, are what New Zealand needs to prosper as an exporter of smart products.

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