Last year was difficult for energy companies, and this year is not looking any easier. Despite valiant attempts to position themselves as customer-centric and some costly sponsorship investments, lots of bad press around price increases has resulted in considerable public negativity towards the sector. Co-operative Energy has bucked the trend by offering to cut its prices by 2 per cent, but overall it is back to square one for suppliers and it will take more than an advertising campaign to establish a positive perception.
Marketing in the utilities sector has traditionally been restricted to a functional relationship with consumers: detailing price rises, introducing tariffs and notifying customers of changes to their account. But it is an outdated model. Long ago, control shifted to consumers, who began to challenge brand claims and demand some integrity. As a result (generally speaking), brands began actually listening to consumers to inform their marketing and services.
Today, we have progressed to a stage where consumers not only understand that data can be swapped for an improved service – but many actively seek it. Customers now expect more from their providers and look to actively engage with them by sharing their personal preferences to obtain a more relevant engagement. In fact, this “value exchange” has become fundamental to modern marketing. Yet utilities as a whole remain behind the beat and are still failing to truly listen to consumers, hoping instead that a new marketing campaign will mask price rises.
Brands in other sectors have long since adopted strategies based on the value exchange to inform their marketing campaigns and reap rewards. The best known examples are supermarket loyalty schemes, which were some of the first to “trade” for actionable data in such a fashion.
Cleverly using such insight to build up profiles of consumers, supermarkets today have been able to not only confidently master their own space, but branch out from their core grocery services to challenge other sectors. For instance, Tesco introduced a range of competitive financial services products such as low-rate loans and mortgages.
Meanwhile, energy firms continue to struggle in their own market, partly due to confusion around payment plans. By connecting with their customers, brands can gather information to enhance understanding and engagement. This could be in the form of community projects, offering flexible tariffs to suit a customer’s lifestyle or, taking a lead from NatWest, changing business operations and extending opening hours to show understanding of customers’ busy lives.
This value exchange can also be seen emerging in other traditionally conservative sectors such as financial services. In recent years, the financial services industry has seen a significant decrease in consumer trust and is beginning to slowly rebuild its reputation through activity to demonstrate that it values its customers.
Gas and electricity suppliers must place data-driven intelligence at the core of all marketing campaigns if they expect to engage meaningfully with customers. In short, they need to respond to the shift in consumer attitudes and take a new approach to their marketing activity by adopting this kind of value exchange. Only then will they remain competitive in the market, and build customer affection for the brand – and in the process enhance the reputation of the industry.
Ian Stockley is managing director of brand and marketing specialist Indicia
This article first appeared in Utility Week’s print edition of 25th January 2013.
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