Why it’s not game over for utility brand building
Utilities trying to separate themselves from the pack face an unenviable communications task. They sell a ‘me too’ product which people only think about when there’s a problem – for instance when prices are rising or service is disrupted. As British Gas found to its peril!
Some might argue that this doesn’t matter. After all, consumers are unlikely to shop around; just 4.8 million switched energy provider in 2016 and 15% have stayed with the same provider for over 15 years. Similarly, despite huge TV advertising spend and sponsorships, Ernst & Young reports that one in three households sees no or little difference between broadband providers. So there seems to be little advantage to utilities in trying to build a distinctive brand.
But is this true? Well it might be if the utilities only needed to care about keeping their current customers – after all good old apathy seems to be doing the job for them! However, a utility’s PR challenge is rather more complex than this. They have current shareholders, customers and employees to keep happy, and they need to attract new ones; they need to make sure they’re visible for the times when people are prepared to shop around; they need to keep the regulator happy; they need to keep the communities within which their plants operate onside, and woo those communities where they plan to build.
Let’s look at how companies are faring in just two of these areas…
Creating brand ambassadors
One way in which utilities can build their brand and customer base is by turning current customers into brand ambassadors. There’s plenty of empirical evidence to back up this approach. A study by Nielsen reveals that 84% of consumers trust recommendations from family, colleagues and friends and 68% even trust the online opinions of strangers. In terms of recommendations, according to Which’s Energy Companies Satisfaction Survey 2017 - a measure of not only customer satisfaction but also the likelihood a customer will recommend the brand to a friend - no one in the energy industry is performing particularly well; the average industry score is just 56%. Newer entrants such as Ovo Energy, Places for People Energy, Ebico, Flow Energy and Utility Warehouse are outperforming Britain’s Big Six. This is potentially because these newcomers have more to gain by getting customer satisfaction right and so have prioritised it.
Another way in which utilities can improve their brand image is by being smarter about communications during recruitment. Why? Because potential employees are often customers. For instance, John Lewis in a recent article in Onrec magazine estimated that if it didn’t handle graduates correctly during the recruitment process it would cost the retailer £4.8m in lost business due to disappointed, unsuccessful, candidates (and their friends and family) all deciding to shop elsewhere. As one senior manager put it “my job title is head of recruitment but in reality I’m head of rejection.”
So how big a challenge is this for utilities? Well, in 2014 The Daily Telegraph reported there were 39 applicants for every graduate job across the board. Using this figure as an indicator, for a territorial business like a utility, those disappointed applicants across every possible role (graduate and non-graduate) may well be customers or potential customers – as are their family and friends. Mishandle your communications with them at your peril!
These two short examples show that when it comes to using communications to protect and grow their businesses there’s plenty to play for.