I recently sat down with Dr. Fridrik Larsen, chairman of Charge, the world’s first energy branding conference being held in Iceland this September, to discuss how energy companies can increase their brand equity, transforming from a utility to an energy brand. Both Fridrik and I will present at Charge. Register now or learn more.
When you think about utility brands globally, what stands out to you as particularly effective? What’s ineffective?
Fridrik: In the competitive energy market, the traditional utility is dead. The utilities in those markets are no longer hooking the customer up to a service that the consumer needs. A consumer no longer needs the utility for electricity—a utility needs the consumer to stay in business. The most effective and most ineffective initiatives revolve around the smart buzz. The effective ones know how to bundle the possibilities of smart technology with their brand and their message and are able to frame it in an engaging way. The ineffective ones think that it is enough to be smart without really exploring the possibilities; they don’t know the customer or how the customer might find it beneficial.
In the US, we’ve identified six factors that drive consumers’ brand trust: customer focus, company reputation & advocacy, communication effectiveness, reliable quality, environmental performance and community outreach. How does this compare to what you see elsewhere in the world?
These factors are similar to my own qualitative research findings done throughout Europe, both in areas with a long history of liberalized energy markets as well as newly or soon-to-be deregulated eastern European markets. What differs between countries is what consumers expect from the utilities and consumers’ varied understanding of the underlying concepts. For example, consumers in Iceland are used to hydropower and consider nuclear to be a dirty energy source. However, Eastern European countries—that only know dirty coal (in terms of everything in the country being covered in a layer of ash)—consider nuclear to be a green source of energy.
What can utilities do to improve their company’s reputation among consumers?
Utilities need a more brand-minded, customer-centric strategy. That can prove to be difficult, especially for bigger utilities, but it’s very important to be honest and credible in communications. For instance, oftentimes a utility tries to make connections to certain imagery in the consumers’ mind, but the consumer is given no choice to understand why that utility should be connected to that imagery.
Here‘s an example: Before rebranding in 2008, British Gas was losing 40,000 electricity customers each month. This old behemoth identified its strengths in the consumers‘ minds as well as its faults inside the organization. After a 2009 rebranding, British Gas saw lower churn rates among existing customers and was attracting new customers. The brand became more resilient towards bad PR as well. This was the result of increased customer affinity, positive perception and improved attitudes towards the brand. It is a really interesting market, and I find it fascinating to watch that energy branding ecosystem develop, with established players trying to evolve and newcomers trying new approaches to become dominant.
How can community engagement enhance the utility brand?
As with all engagement, it has to be in line with the brand, and it has to have an honest approach. There are, of course, many distinctions on community engagement and different opinions about how to implement community engagement. If the utility views community engagement as having employees come out on a Saturday to clean garbage from a river, the utility cannot be polluting the river at the same time—it needs to be the utility that has the power source that makes rivers cleaner. If engagement is about holding meetings with the community to have them involved in new construction, do it like you mean it. Don’t just announce something and leave—start a dialogue. It can be difficult when emotions run high, and it is often impossible to meet all demands, but at least make an effort to listen to people’s concerns and address them.
Do you have any advice to help utilities select causes for corporate philanthropy and employee volunteerism?
It is very much the same advice as community engagement: Be true to your brand and to your operations. Help consumers connect the dots between the charity and the company. This should not be hard since electricity is used for everything. The fact that electricity improves our lives and living standards tremendously is a great link with anything that is aimed at improving society.
Our research shows US utilities to be particularly strong in clear and accurate communication as well as being prepared for emergencies and providing quick problem resolution. Yet brand trust lags other performance factors. How can utilities build on these strengths in their branding efforts?
Almost every utility is doing a great job running a reliable service and communicating when the service becomes unreliable. But that is the problem—they are only experts at talking to people during a negative situation. A lot of people only hear from their utility when they are told how much they owe and when their electricity might go off. Imagine the brand value of Apple if you only got a bill and your Apple TV would undergo mandatory updates without notice when you were about to binge watch your favorite show. What I am getting at is that utilities are doing a great job providing a commodity. What they need to build on top of that is a strong brand, and branding requires a constant effort in providing some value on top of the commodity. It can be some service, but in most cases it is something intangible that creates a positive feeling. The utilities are great at reading the meter—now they need to read people to create a trust that goes beyond the commodity.
We hope to see you in Iceland! In the meantime, we invite you to download Why Brand Trust Matters for Energy Utilities.