How purpose can differentiate energy brands

Looking to other sectors with low customer involvement can give energy companies inspiration on how to develop their brand image. James Payne writes.

James Payne, consultancy director, Given James Payne, consultancy director, Given

If you work in the energy sector you’ll probably have heard the Accenture statistic that consumers spend about six minutes annually thinking about their electricity bill.

In such a low involvement category is it ever possible to move beyond price-based competition by forging stronger, more emotional relationships between your brand and your customers? Looking at other categories with low customer involvement provides some clues for how energy brands could tackle this challenge.

Banking brands – keep it simple

Banking shares many parallels with the energy sector: inertia around switching current accounts, low involvement and low trust after the financial crisis and PPS scandals. The standout characteristic of strong and emerging banking brands like First Direct and Atom Bank is their simplicity of use, backed up by excellent customer service. This approach embraces customers’ already low involvement by making the brand so easy to use and interact with you can spend even less time thinking about it.

This approach can already be seen in the standout customer UX and customer service of brands like Ovo, Bulb and Octopus. However, as more and more energy brands embrace a sleek, effortless user experience and provide better and better customer service, this approach is likely to move from being a brand differentiator to become table stakes for any brand to compete effectively in the market moving forward.

Dairy brands – be unexpected and entertaining

Dairy may seem like an unlikely category for an energy brand to learn from, but the lack of perceived product differentiation means that most customers just grab whatever milk or butter is cheapest on-shelf. The standout brands here, like Yeo Valley and Anchor Butter, confront customers’ low involvement head-on with surprising and entertaining brand activation that is inherently involving. The unexpected boldness of an Anchor Butter billboard with a heroic baking image that proclaims: “PRIDE. You won’t find it in a ready meal” or Yeo Valley launching a farmer boy band during X Factor commercial breaks is inherently entertaining and involving.

The challenge for energy brands is that, unlike dairy, the category is plagued by low trust. The negative press around ‘rip off bills’ seems never ending; Citizens Advice called for a £275 refund on customers’ fuel bills because of super profits. Conventional marketing or superficial advertising that fail to counteract customer cynicism head-on is increasingly ineffective for energy brands.

Cleaning brands – have a strong brand purpose

Cleaning products, as another low involvement category, have a long track record of finding innovative ways to create brand engagement, dating back to their sponsorship of the original soap operas in the 1930s. But the strongest brands emerging in the category now are powered by a clear sense of brand purpose. Brands like Method Home and their ‘people against dirty’ campaign against toxic cleaning products and for making cleaning more enjoyable or The Honest Co. and their mission-driven focus on products that are both effective and safe.

It can be a signifier to customers that the brand offers them something better, and makes a low involvement choice a little bit easier.

Brand purpose needs to have genuine substance to be effective. With low trust categories like energy, if you’re going to communicate your purpose you need have a solid story when it comes to how you are being a responsible energy provider.

An example of how not to approach purpose as an energy company is SSE’s 2014 ad campaign that featured an orangutan marvelling at all the wonderful things that energy can do for us, with Nat King Cole’s ‘When I Fall In Love’ playing in the background, all in an attempt to make people feel warm and fuzzy about the brand. But featuring an endangered animal looking longingly at a wind turbine just doesn’t cut it when a high level of coal in your fuel mix means your carbon footprint is higher than the UK average for energy firms.

Instead, for energy companies, a brand purpose with substance should be linked to the most relevant impacts the company can make. This will be as individual as the business itself, but can range from a more socially focused, to a more environmentally focused purpose.

Focusing on a more social route, an energy brand could tackle the issue of how some socially excluded people may struggle to afford energy and help ensure these vulnerable people never have to face a dark, cold home in the winter. The added benefit of this route provides the opportunity for business to show it genuinely cares and for the brand to create more emotional connections with its customers by demonstrating the positive impact it has created in these people’s lives.

Taking a more environmentally-led focus around brand purpose means going beyond just focusing on a cleaner or zero carbon energy mix and focusing on how to accelerate the transition to a low carbon economy. The challenges of a cleaner, but more intermittent energy system mean that accelerating the adoption of smart asset optimisation technology at scale is vital, embracing the opportunities that the shift to electric vehicles and a more distributed energy system will create. Therefore, for energy companies, a purpose with substance should be about the part their brand plays in the race to providing clean and affordable energy and ensuring smarter ways of consuming energy.

Research has shown that people will pay a premium for a purposeful brand that’s creating positive change – according to the 2015 Nielsen Global Corporate Sustainability Report, 66 per cent of global consumers say they’re willing to pay more for sustainable brands. However, for the vast majority of mainstream energy providers, the role of purpose is to compliment price-based competition with an extra reason to either switch to or stay with them.

The volume of high inertia customers that never switch and are paying over the odds for their energy can only decrease as it becomes increasingly normal and expected to shop around. So, in an ever more competitive and rapidly changing sector, a brand purpose with substance can become a key driver of business success.

Author: James Payne, consultancy director, Given,
Channel: Customers
Tags: SSE , Accenture , UK , Wind , Electricity Retail , Citizens Advice

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