Utilities have come under the influence of fast-moving consumer goods marketing standards and practices. Gone are the days of long-term contracts and a lack of competition. Instead deregulation and open competition have forced all players to become more effective and consumer-friendly, putting the consumer at the heart of the brand agenda.
This has created a change in the consumer -brand dynamic, with brands having to communicate in a more responsive, flexible, demand-driven style, rather than the old monopolistic producer-driven manner. Innovation has become key, focusing on adding value and introducing consumers to strategically driven brand co-operation, such as British Gas instigating a preferred partnership and recommendation model for its electric vehicle charging offer with manufacturers such as Renault, Nissan and Toyota.
An inevitable by-product of this increased competition and choice is the voracious appetite from consumers for data – for instance, on pricing deals and packages, contract length and terms and conditions – that allows them to make more informed choices. With so many options affecting consumer choice and purchasing dynamics, it is no wonder that many consumers are falling back on trust as a key influence in choice, balancing that with service, added-value benefits and price considerations.
This has placed strains on utility companies’ marketing departments. New ways of measuring performance, not just based on revenue, but also “soft” values such as trust, means incorporating measures such as net promoter scores and monitoring chatrooms and blogs to understand how brands are perceived in peer-to-peer, recommendation-based consumer forums. Merely telling people you are trustworthy is not enough – you have to deliver trust consistently, over time, to be labelled trustworthy.
Basic rules apply here. It’s not what you say, it’s not even the way you say it, it’s the way you deliver it that really counts. It is a matter of delivering the right service proposition to the right audience, in the most appropriate channel for that segment. For some, paper-based billing is preferable to digital. Meanwhile, Twitter is fast becoming a go-to channel for disseminating information, while the British Gas app has been downloaded over 250,000 times since its launch in late 2010.
All these channels can help to build trust, based on the ability to communicate the right message and mitigate consumer dissatisfaction transparently. British Gas recently launched its Honest Conversation campaign, which aims to develop transparency. Using simple methods such as simplifying tariffs, providing more help to find the best tariff for customers and giving greater visibility on the bill, including a breakdown of the cost, helps consumers to understand the context of price rises. This can help to show how price comparison websites may not hold all information, nor deliver the right benefits such as smart metering for greater consumption visibility. It can also highlight simple ways to save money, such as free insulation offers and moving to direct debit.
Such innovation should not undermine the fact that service brands live or die on the ability of the people they employ to deliver good service. You cannot train people to communicate values but you can embed those values into behaviours and create effective brand ambassadors – personal ad campaigns, if you like – that support and enhance other channels and innovative propositions.
What about online? Interestingly, Centrica has found that online channels have had an important role to play in supporting the delivery of values. As an example, the uptake of online self-administered meter readings is huge, with British Gas seeing a growth of 100 per cent last year. People do not want the hassle of having to organise their life around a home-visit meter reading, it adds no value to the relationship between brand and consumer and could even detract from it should that meter reader not demonstrate the brand’s values in action. However, placing trust into consumers’ hands (demonstrating and delivering integrity) immediately affects the consumer perception of the brand (they trust me), which flips the relationship around (so I now trust them) delivering the desired result: trust.
The key issue here is not that the touch point is online. It is that channels are not divorced from the overall experience. If you can tie the overall brand experience and consumer need into a relevant and appropriate channel, your brand
will benefit by fulfilling a simple and straightforward need, while also delivering a beneficial financial effect.
Following some simple rules can help your brand exert more power and rebalance the relationship between brand and consumer:
n reduce the opacity of your promise and offer – make it simple, transparent and straightforward;
n embed your values in your staff – they are the frontline brand delivery touch point;
n if you consistently deliver your promises and consumers experience your values first-hand, you will build trust;
n use your channels to effectively support your frontline brand experience – recognising when consumer needs can be more effectively met through automated and other channels – and leaving the crucial consumer experience to your people;
n understand that your brand is not just compared with that of your immediate competitors – other brands offering similar service environments affect consumer perception of your performance. l
Dominic England is planning director at Brand Potential, and Dan Taylor is director of new ventures at British Gas.
Loyalty royalty
Customer churn is costly, so loyalty and rewards programmes are increasingly seen as wise investments. Greater incremental revenues and lower customer churn are fully achievable in the utilities sector. The magic ingredients are targeted reward offers with perceived high value. Not every provider can join an established programme such as Nectar, not least because of competitive conflicts with existing utility partners. But utilities can create their own retention programmes.
Through a link on its website, for example, a utility could offer access to an exclusive shopping portal, available only to its customers, that brings together thousands of diverse and trusted online merchants globally. Each time the customer makes a purchase from one of, say, 1,200 UK merchants, that customer could earn points, keeping the frequency of brand engagement high. Those points could be redeemed against their next utility bill, ensuring a closed loop earning and redemption cycle and providing a value exchange to drive repeat purchase.
Reward points are an established, and often effective, route to customer loyalty, but there are also opportunities for fresher approaches. For example, through subscription-based membership programmes, utilities can reward customers with bundles of carefully chosen products and services at attractive prices. Such portfolios could be tailored to benefits relating to the home such as home and contents insurance, identity theft, bill protection and DIY vouchers.
Such a membership-based approach is a win-win: customers benefit from financial savings, while the utility receives the additional revenue from the annual subscription, plus improved chances of customer retention.
Janet Titterton, director, Collinson Latitude
This article first appeared in Utility Week’s print edition of 24 February 2012.
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