Mind the perception gap

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The brand gap. Image credit: LarsEn Energy Branding www.larsen.energy

The biggest challenge any utility brand faces is the gap between its brand image and brand identity. Brand image is how outsiders perceive the brand and identity is how the brand is being perceived inside the company or how managers and employees want the brand to be perceived by outsiders. This is not a problem exclusive to utility brands, energy brands or other corporate brands that have a similar background as energy companies.

Why the gap exists

The biggest reason for the perception gap is that branding of the utility is not taken seriously enough. Research has shown that the biggest hurdle for utilities to become a strong brand is the lack of understanding on behalf of management. The marketing departments have a great understanding of the importance of branding and what branding is about and what it is not exclusively about. The problem lies with other departments and top management.

What is branding about?

To many, branding is the issue of marketing or comms – for many, branding is nice colours and a cool logo. But branding is not something that can be siloed in a single department. For the utility brand to succeed as an energy brand, the whole organisation needs to live and breathe the brand. The best definition of a brand is that is whatever people perceive about the organisation. This means every interaction that the customer has had with the utility, every interaction the customer is having and will have with the utility brand. Every thought the customer has and will have about the utility.

Maintaining the gap

Looking at branding as something best kept contained at marketing or worse, containing branding for a designer that draws a logo, means that there will be a big perceptual gap between what the company wants to be perceived as and what the customer perceives the company to be. A CEO might want a brand-overhaul and asks the ad agency to draw a cool logo but no research is conducted on where this cool factor should stem from inside the corporation or its culture. The marketing department might come up with the idea for brand values but gets no support to implement it within the organisation and get everyone involved.

The results of the gap

Trying to be something that you are not will result in the customer to perceive one personality in the marketing material and branding of a utility but will perceive several other personalities and messages while communicating with the utility and its employees. Branding for utilities just like any other organisation is a human resource matter as well as a strategy issue. A clearly defined brand is an important factor of a well defined and well-organised company strategy.

Closing the gap

There are two ways to close the gap. One way is to identify what the utility and its corporate culture are about and emphasise the core values of everyone inside the utility. Another way is to align the long-term vision of the brand with the long-term vision of the utility. This might need some changes in the culture of the company and the core values of the employees. Either way, re-branding an established utility is not done overnight. It is a process that might take one or two years to implement internally and a lifetime to maintain and adjust.

Know you segments

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Segmenting the market and the customer base has in a way followed energy companies since the start. Market segmentation for utilities used to be less complicated – the customer was everyone living in a certain geographic area over a certain age. In short: everyone was the customer and everyone got the same message in a form of a bill or announcement of outages.

Enter the competitive retail energy markets

The competitive energy markets require more detailed segmentation. It is almost no longer possible to deliver the same message and the same service to just about everyone. And everyone is not looking for the same service from an energy retailer. Some people are following the lowest price, others are looking for a pleasant user experience, a group of consumers are after green energy and sustainable energy savings… the list goes on and most consumers are after a mixture of everything mentioned but put different emphasis on different factors.

How to segment energy consumers?

First off, there are, broadly speaking, four different types of segmentation.

Geographic segmentation segments users based on their location. This might seem like an outdated segmentation tool but rural energy customers have different needs than urban users. There are even different needs for users in different cities.

Demographic segmentation is along with geographic segmentation the most easily understood methods of segmentation and most used. Segmenting users by age, gender, income and family size sounds pretty familiar to everyone.

But electricity is not something bought off the shelves in supermarkets located in cities of a specific population density – electricity is not an easy made meal for a woman aged 35-42, married with two-point-two kids aged 7-12.

That is why energy requires more detailed segmentation.

Psychographic segmentation looks at lifestyles, personal characteristics – attitudes and how consumers live their lives. Branding is after all about creating something intangible on top of the core commodity – a certain spirit or experience. Psychographic segmentation looks at how people look at life and that is where it is likely for a brand to succeed.

Geographic and demographic segmentation still play a part and one type of segmentation does not exclude another.

Your brand can speak to different groups. But you should not change the brand for each group your brand is speaking to but your brand can approach each group differently but with a coherent voice.

Moving from the macro-segmentation of the market to the micro-segmentation of your customers.

While speaking to the market at large, the brand also needs to communicate with customers and customers can usually be segmented. This is where behavioural segmentation comes in (remember – one approach does not exclude the next) to offer different types of customers different types of incentives. Big data and data analysis of your customers should be used to analyze their behaviour and see which groups of customers behave in a similar way.

Stakeholders

The energy sector is not only commanded by customers but also different stakeholders. For brands operating a regulated monopoly business and large energy companies with a global brand footprint – it is important to realise and map stakeholders in general. Stakeholder mapping helps utilities to visualise different stakeholders such as politicians, regulators, trade unions, environmentalists, large energy consumers and household consumers.

Tailoring the message for different segments

Building an effective energy brand and energy marketing is not only about customer engagement but also knowing who your brand is communicating to and how it should communicate at different points. Different segments are communicated to with a different type of message through different channels. One of the brand’s customer segments is price conscious while another is concerned about the environment. To make energy savings a point of brand value, the brand would approach the groups with a different message, the price savers would respond better to a message regarding how much money they would save from being energy efficient while environmentally concerned customers are more likely to respond to message regarding how they can contribute to saving the environment with energy efficiency.

The best Energy Brands have this in common

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People often wonder if there is a good life-hack or a shortcut to achievement. So, is there a good life-hack for creating a good brand in the energy sector? The short answer is: No – there are no shortcuts. Creating a good energy brand takes a great deal of effort. Even if you know the secret to creating the very best power brand in the world and even if you were born with the secret to energy marketing in your head – creating, implementing and running an effective brand in the energy sector is still hard work.

But is there a secret recipe?

Good news! The answer is: Yes – There is a secret recipe! But the bad news is that it’s not so much as a recipe but more like secret (or not so secret) ingredients to creating a strong brand in the energy sector. From reviewing the admissions from the World’s Best Energy Brands we have learned a great deal about how the best energy brands in the world view themselves. And there is a common thread. It does not only apply to the competitive retail sector – it also applies to the regulated energy sectors both in retail, transmission of electricity, distribution of electricity and it should apply to B2B energy retail companies as well as generation companies.

The best energy brands offer something else than energy

They offer an experience. They have a simple message about the benefit they offer that no one else offers. And the benefit is usually not the price or being able to deliver electricity on time. It’s usually a feeling in the mind of the consumer that they own. Apple and Nike are well-known branding and marketing reference point clichés for a reason. They own a share of the consumer’s mind – and that is what you need to own a share of the market.

The best energy brands look outside the energy box

The best brands are not focused on the next door utility neighbour and try to copy their best practices. Although many brands in the global energy market are doing great things branding vice, the best brands in the world are not found in the energy space. You should look outside the box and identify who is the best in the world and learn from them and apply it to the energy sector. Don’t think about which brand is the best employer brand amongst energy companies – look for the best employer brand in the world. Don’t just try to learn from the best customer service brand among utilities, look for the company that offers the best customer service period.

The best energy brands use segmentation tools

It’s almost impossible to be like by everyone. Instead, you should use the appropriate tools to segment the market. The most simple tool to use is demographics. But you can’t go in blind and decide to be the brand for single women aged 26-37 living in a certain area with this much yearly revenue. You need to know why this group is the right one for your brand and your value offering. It is often said that typical demographical groups are dead – people can’t be put into categories based on gender, age or where they live. There are multiple tools that segment that market based on more things than on demographics. Find the groups that your brand speaks to.

The best energy brands are customer oriented

Customer engagement is not about smart gadgets. It comes naturally when a brand speaks to the customers on a personal level and connects to them on an emotional level. The smart gadgets help but if there is nothing that connects to the customer other than a socket on the wall or some hardware, then there is no chance of communication. The best brands have created an emotional value that can be hard for competitors to compete with.

The best energy brands measure up

We have established that good branding is about knowing the customer. But good branding is about knowing yourself. What you stand for and what your brand is capable to do. But you need to know where your brand stands and where it stands in the minds of your customers. The best energy brands are constantly measuring how they are doing and benchmarking with other brands. They are not afraid to reach out proactively to customers and ask them what they think – this is not done once a year – it can be once a month or even once a week.

The best brands or on a mission

They offer superior brand value by offering something unique and different from others in the sector. That superior value stems from a specific mission – they are not just selling energy – they are often trying to change the world. A good example of good branding is in the green energy sector. Today, almost every supplier has started to become green. So green has become the new black in energy and it’s hard to differentiate on the green origin of the energy alone. Green brands today have to dig deeper and be sustainable to the core.

Charging around Iceland in an Electric Vehicle

Electricity from renewable sources pours from the wall sockets of Icelandic homes. A vast majority of the country’s car fleet is, however, powered by fossil fuels. Electric vehicles are a viable option in Reykjavik, the nation’s capitals, where two-thirds of the population lives. But traveling around between the remote and spread out rural villages is a challenge no one has taken on.

One of the guests attending last year was Stuart McBain, an accountant from England who specializes in clients that have a sustainability focus. He was so thrilled with the conference that he stated: “I will be attending CHARGE for the rest of my life!”. Stuart has been an electric car owner for some years now and is quite passionate about the transformation from fossil fuels to electricity.

I will be attending CHARGE for the rest of my life!

His passion has literally driven him around the coastline of Britain in an electric car and he is planning to drive along the equator as well.

Stuart is a man of his words but wanted to give something back and deliver a presentation about his passion for renewable energy and sustainability. In a conversation with Dr. Fridrik Larsen, he kindly asked for a slot on the EV track. Since the demand for speaking slots is higher than supply, Fridrik thought that Stuart would have to earn his slot on stage: “Only if you put your money where your mouth is and drive around Iceland before the conference” (well… not really but it sounds kind of cool).

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Stuart will attempt to drive the ring-road around Iceland in an electric car accompanied by his 81-year-old mother and his friend Mark Gorecki. The ring road, or Highway 1, is only 1332 km long but there are many challenges for an electric vehicle. For one, there is no network or infrastructure of charge points and another is the number of mountains they will need to drive up along the way.

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One of the challenges is climbing the mountain roads of Highway 1.

 …there is no network or infrastructure of charge points

Stuart claims that he does not know the term Range Anxiety which is good since there are often more than 100 kilometers between villages along the way and a portion of the trip takes them through the deserted Martian landscape of the Icelandic highlands with an elevation of 600 meters above sea level and not a farm, village or survival shelter in sight for 170 kilometers. If the ring road is not too much of a challenge for them, they might go off the ring road to visit a village or two in a remote fjord.

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After driving around the country that was the inspiration for The Shire, they will attempt to drive along the volcanic desert landscape that was Tolkien’s inspiration for Mordor

If Stuart makes it back in time he will give a presentation at CHARGE and share his adventure as well as talk about his passion for sustainability and electric vehicles.

 

 

How sustainable is your Energy Branding?

Brands need to be sustainable — this is something that should be obvious to everyone. In times when renewable energy sources receive much of the buzz from marketing departments to engineers, from energy companies to the mainstream media — a different kind of sustainability is often forgotten.

[…] there does not seem to be a consensus on the true meaning of sustainability

Defining sustainability

In the energy space, sustainable sources or renewable sources of energy are often used about a wide area of energy sources and there does not seem to be a consensus on the true meaning of sustainability. There are of course official definitions and standards but most individuals do not keep those standards in mind, their definition is often determined by their (in)experience and their perception.

For some, sustainable energy means something that is not fossil fuels while some would include nuclear while others would dismiss hydro from the equation. Almost everyone has to some extent a valid point in the argument, their definition of sustainable energy is based on their value judgment.

The forgotten definition of sustainability

Another type of sustainability for energy is often forgotten — the sustainability of the brands. A brand is both the front and the inside mechanics of the energy company. A brand is of course more than a logo — it’s the perception of consumers and employees alike as everything the company stands for — the brand is affected by every touch point people have with the brand. If a company does is not actively defining the brand and keeping the brand in mind at all times — the brand will be actively defined by the employees and the customers that interact with the brand.

[…] a brand is an investment that should pay off in the short term and the long term

Some companies reluctantly agree that marketing and branding are something that has to be done and allocate X% of their budgets to the marketing department — some even look at it as a sunken cost. But this is not a sustainable attitude. Branding and marketing should not be money thrown away — spending money on a brand is an investment that should pay off in the short term and the long term. Sustainability should be about not wasting resources, the output from any activity should be the same or greater than the input.

Return on Investment

Investing in a sustainable image (this should not be confused with a sustainable-as-in-green image) by building a strong brand should be the priority of any business. Brands should not throw money away at marketing to make them look cool and current — brands should invest their resources in creating a coherent marketing message that is in line with their brand. Brands should not look at their image as something that can be easily fixed in a moment spending a lot at efforts that are the corporate-social-responsible-buzz-thing-to-do of the moment.

Investing in a sustainable image by building a strong brand should be the priority of any business

Saving puppies and suddenly becoming concerned about the well-being of something that has to do with children is not a sustainable way of branding. These things can be sustainable if it relates to the brand and the message of the brand and it can enhance the well-being of the brand. A book publisher is credible when it becomes concerned about children reading books — it is in the brand‘s self-interest, in the long run, to turn more children into bookworms — but it has multiple benefits for the society the publisher does business in.

The challenges of brand building in the energy sector

For a challenger brand entering a competitive energy market — brand building comes more naturally. Challengers often start out small, with a group of like-minded individuals set out to change the world. Their challenge is not to lose sight of what defines them as a brand and stay true to their brand as they expand and make sure that any addition on the team makes a fit with the brand. The incumbents, on the other hand, have a more challenging task ahead of defining their brands. The incumbents can be traced back to different times — times, before google had not entered the vocabulary of small children and IBM, was making tabulating machines under the name of CTR. The incumbent brands have often existed for generations and they have many tasks that are fundamentally different in nature. While the challenger brands are like teenagers, figuring out their identity and changing it slightly as they develop, the incumbents are grown adults that have their identities set but need to define them.

Sustainable investment

To create a sustainable brand, companies need to look at branding and the brand as a strategic matter and a human resource matter. Money spent on branding should be spent effectively and strategically and should be in line with what the company does today and what it will do tomorrow. While the debate on sustainable energy sources goes on, the definition of brand sustainability should be pretty clear.

At CHARGE 2017, we will have great presentations and examples of sustainable brands as well as brands that have increased their financial sustainability by leveraging their brand message with an eco-sustainable value proposition for their customers.

The power of City Branding

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Great cities are charged with energy. New York is so buzzing it never sleeps, Paris is intense yet laid back & cool and charged with romanticism while cities like Austin and Berlin are filled with creative energy. These cities have formed a lasting impression in our minds. We have often caught the vibe of those places without even visiting them. These cities have enjoyed a favourable word of mouth and popular culture has further helped shape them as brands.

The benefits of a strong city brand

There are namely three reasons (or segments) why cities (and countries for that matter) actively try to build a favourable image. They are all about creating an attraction for those segments.

1. Inhabitants

Cities are looking to retain and attract new inhabitants. Just like for companies, inhabitants with a strong sense of the image of the city they live in are happier. A city that has a strong, positive image becomes an attractive place to relocate to. Being a sought out city brand for inhabitants means that the talent pool grows.

A city that has a strong, positive image becomes an attractive place to relocate to

2. Tourists

A strong brand comes first in mind when it comes to deciding on consumption. A city that has a strong image pops ups first when people are thinking of taking a vacation. There are of course many things that exclude a certain city such as the occasion of the vacation or the time of year.

3. Companies

Companies, like most people, seek out to be in the company of their peers. If you are a start-up, your dream is Silicon Valley — If you want to produce a film, you go to Hollywood. It is not just about the hype, if you know that your peers are there, chances are that the infrastructure and knowledge are already there. And along with companies come jobs and jobs attract inhabitants.

Landmarks are like iconic logos

Building a powerful city brand is about being an attractive city in the eyes of the consumer or the stakeholder. It is not about creating an attraction. The Empire State Building and the Eiffel tower are great landmarks or icons for their cities but Paris and New York are about more than that — landmarks are kind of like logos — a logo is a graphical representation of a brand but there is more to it than the logo for great brands. Just like strong product brands — strong city brands appeal to people because of an emotional connection. The strongest city brands in the world are strong because they provide people with an intangible benefit, an experience.

The Empire State building and the Eiffel tower are great landmarks or icons for their cities but Paris and New York are about more than that.

Energy as an ingredient for the city brand

While every city has a certain energy to it or a vibe, not many cities have actively built their brands around energy in the literal sense. There are of course cities like Houston or Aberdeen that have become known for their oil industries but that image often has a hard time to translate outside the energy industry. We can see cities that are building an energy brand on a B2B level. Vasaa in Finland has a strong energy cluster and another example is Berlin. Berlin is not known as a powerhouse of energy sources but rather a powerhouse of creative energy sources. The image of Berlin as an energy brand builds on its image of creative energy and focuses on energy innovation.

We can see cities that are building an energy brand on a B2B level.

Energy imagery as part of the city brand has not yet been fully utilised. There are enormous opportunities for cities around the world to become strong energy brands. It can be based on novel or innovative ways of energy usage or it can use landmarks as icons for their energy brands. The Hoover Dam and the Niagara falls are great examples of iconic landmarks that have attracted millions of people for decades. But there is yet a city to emerge that uses those kinds of landmarks as an active ingredient that adds value to the city brand.

Energy can create even more value

When I set out to research the possibilities of branding energy, I wanted to do more than guide energy retailers into creating new logos and jingles or adopting a new colour. I wanted to see how energy can create more value than it already does by making an emotional connection to the consumer’s minds. This can be done by branding energy as a valuable ingredient for sectors outside the energy space. One of the areas this applies to are cities and countries as brands -as energy brands.

I wanted to see how energy can create more value than it already does.

That is why cities and places as energy brands have been a topic in at the CHARGE Energy Branding Conference agenda. To make energy more valuable we must look at ways to connect energy to other things than devices through a socket in the wall.

The global utility in a new energy paradigm

As Ryan O’Keeffe pointed out during his presentation at the CHARGE Energy Branding Conference last September, large energy companies with a long legacy of generating and selling electricity, are not normally considered cool.

The company has and is going through a comprehensive overhaul of its image, meaning and role in the fast-changing energy environment. As Mr O’Keeffe pointed out, it was a change in strategy that was long overdue, the company’s old logo was designed when Google was still operating out of a garage in Silicon Valley.

We as a power company can and must play a key role in tackling these challenges.

Enel found itself working in a new energy paradigm and found that how it had been conducting itself for the last fifty years was not going to work in the next fifty years. During the rebranding process, there were some strengths that the brand possessed that would become valuable in the changing energy landscape. By taking a humble approach and acknowledging that a big corporation with a big corporation culture might not foster innovation that could keep up with the time. The brand turned this weakness into a strength by using its global scale and resources to foster open innovation; helping entrepreneurs that are set out to change the energy paradigm even further.

Ryan’s presentation from CHARGE – The World’s First Energy Branding conference can be seen below. Enel was one of the finalists for the 2016 CHARGE Awards as one of the world’s best energy brands. The report on the best utility brands has been published by LarsEn Energy Branding and can be found here. The 2017 CHARGE Energy Branding conference takes place in Reykjavik October 9-10 where the CHARGE Awards will be presented for the second time.

New York Energy Week

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The CHARGE Energy Branding Conference is collaborating with partners around the world that have similar objectives as the conference. From trade associations in the energy space, media and events related to the energy space, we are very grateful for having such a strong group of allies that find our message relevant.

One of our partners is the New York Energy Week – a week of events that takes place around New York City. The event is hosted by the industry for the industry. Instead of one centralized location, the events are hosted by various companies in the energy sector. These events feature speakers from organisations and institutions such as National Grid, NYISO, Con Edison, Enerknol, NYC Mayor’s Office, Rocky Mountain Institute and the State of New York.

Like CHARGE, the New York Energy Week is a cross-sector event. While the industry has had a silo-mindset, the event encourages a dialogue between various fields of the energy sector to create an understanding, inviting all energy stakeholders to come together and help drive forward the global energy economy.

Friends of CHARGE are the friends of the New York Energy week and receive 20% off early bird tickets. There is no secret handshake, only a secret code which is CHARGE20.

Communicating a Green Energy Value Proposition

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Landsvirkjun is Iceland’s biggest power generation company, generating over 70% of electricity in the country. There has been a lot of changes in the Icelandic power market and Landsvirkjun has moved from focusing on low-cost electricity buyers market to a more balanced seller’s market, offering competitive prices.

The company offers 100% renewable power on the wholesale market, having only a few customers, meaning that their branding and image building is a bit different from other traditional power companies. It is, however, important for the largest power company in Iceland to deliver a clear message to their stakeholders (the company is owned by the Icelandic authorities) and their customers.

Landsvirkjun’s mission statement is:

Landsvirkjun’s role is to maximise the potential yield and value of the natural resources it has been entrusted with in a sustainable, responsible and efficient manner.

The role of the company has changed in the last years. Instead of focusing on growth and creating new jobs, its focus is today on more value creation than before. The energy transition and the way renewable resources have become more valuable for end consumers has enabled Landsvirkjun to focus more on the Green value proposition.