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Sustainability Branding disrupting the Energy Space

Apple has become a licensed electricity retailer in the US. Photo credit: Apple Canada
Apple has become a licensed electricity retailer in the US. Photo credit: iPhone in Canada

CHARGE is not primarily a utilities & energy conference but is also meant for companies that are actively pursuing to create value for their customers with energy branding; that is creating a competitive advantage with branding and marketing energy that they use. Energy efficiency is a big part of energy branding since the most valuable and sustainable energy is the energy that is never used.

The growing number of companies participating in initiatives such as RE100 has shown that sustainable brands are a part of the mainstream, sustainable brands are not primarily a part of niche marketing preaching to the already converted. Sustainable brands have become brands that have already established themselves in the homes of the everyday consumer.

Sustainable brands are pushing for access to 100% renewable energy and are either switching their supplier to secure sustainable energy or producing energy on their own. Some of the sustainable brands that have just entered the energy space are producing energy to offset their own usage due to the fact that they can’t procure 100% renewable off the grid or are simply producing renewable energy on-site.

These invaders to the energy space have not all the sudden become interested in becoming energy companies but are acting on the demand of their customers. Consumers today are concerned about the energy used to produce the products or services they use but the utilities have not acted quick enough to meet the demand of the sustainable brands. Instead of waiting for the utilities, the sustainable brands have acted to meet the demand of the consumer today or demand that sustainable brands foresee tomorrow.

Good brands are not reacting to the situation as it is today. Good brands try to predict the future and are quicker to market than the competition. The key lesson utilities and the energy industry in whole should learn from the sustainable brands is that if you don’t shape the future of your market, someone else will and the future will be theirs.

Perceptions of Green Energy

Sources of Energy
How the EPA categorises different sources of energy. Source: www.epa.gov

We hear and read terms like renewablessustainable energy, green energy quite a lot these days. We could add carbon neutral, eco-friendly energy and ecological into the mix of buzz words surrounding different sources of electricity.

Defining the term

These terms have defined by public agencies such as the EPA as can be seen in the infographic above or have been defined by scholars and academics. The term green can mean one thing for an energy source and a different thing for a consumer product. The term green can also mean one thing according to the EPA and another thing according to academia and something completely different in the eyes and ears of the end consumer – the definition might be interchangeable in the mind of the person using the term or witnessing someone else using it.

The definition of Renewable energy is quite simple – the source does not deplete natural resources it uses, they can renew themselves within a human lifetime. It seems a reasonable definition that fits the term well.

The definition of green energy is more debatable

One definition of green is simply an energy source that replaces an energy source that pollutes more. Under that umbrella, coal is considerably greener than it was 200 years ago but it would take a big effort in convincing someone that coal should be categorised as being green. Natural gas has replaced coal considerably in the US in the last decade with the effect of the US lowering greenhouse emissions more than most other countries. Natural gas might not be up to the EPA standards of being a Green source of energy but would fit the standard of polluting less than the coal it replaced.

Nuclear in the eye of the beholder

An interesting source of power is nuclear. Many people point out that to date, nuclear has caused less environmental and human harm than any other source of power. The incidents that have happened have been heavily publicised and that the generation of power in itself does not cause any environmental harm – it is just a question of what is done with the waste produced by the generation. But no energy retailer in their right mind would brand their nuclear source of energy as green, especially with environmental activists heavily protesting the transport of the waste around Europe. EDF in the UK branded their low carbon nuclear energy as being Blue energy.

For the energy consumer in an Eastern-European country that got coal-powered energy plants with Soviet-Era technology (instead of Soviet nuclear plant like their neighbouring country), Nuclear energy is green. The layers of coal-dirt from the Soviet era bear witness to how clean the generation of Nuclear Energy is. But trying to tell that to an environmentally conscious Greenpeace member in Germany would result in a branding backslash.

Green is the new brown

The green-electricity claim is tricky. What we have learned from both speakers and guests and nominees for the CHARGE Awards in the last two years is that in order to be able to call themselves Green – brands need to be able to Talk the Talk as well as Walk the Walk. Credible green energy brands need to be green to the core for the consumer to trust them. It has become more valuable than ever to have a strong brand that consumers trust to convey a green-brand message. Green Sources of energy have become something that almost everyone is offering. Building a green energy brand requires more than the source of energy itself. The whole chain of energy marketing needs to deliver a coherent green and sustainable brand communication.

 

 

 

The Decentralisation and democratisation of Energy

There are many current challenges in the energy sector. The sector is adapting to increased demand for sustainable energy and balancing new renewable sources with the current loads of the users connected to the grid. The generation of energy by renewables such as wind and solar at industrial scale is not the only challenge the utilities need to find a sustainable way to implement but also how to feed the electricity created by distributed generation and prosumers onto the grid.

Communicating with prosumers

These challenges are not only for the engineers to figure out – they create an energy marketing challenge – how good are the energy brands in communicating with end customers of energy and how strong are the brands in creating a dialogue with different stakeholders in order to implement the renewables and different types of technology and adapt users to the new reality of the energy space.

A new two-way dialogue between energy company and consumer

Distributed generation and prosumers have created a whole new dialogue between utilities and the public – the public is no longer just the recipient of energy but is starting to feed electricity into the grid. It has been a headache for the regular consumer to understand the normal energy bills, imagine how the regular prosumer is able to understand the bill when he or she is the one charging the utility. This requires clear communication, good utility marketing and a good energy marketing communication needs the clear vision of the energy brand behind it.

De-centralising Energy

The democratisation of energy will happen on some scale in the coming years. The advancements in solar technology and small-scale generation of energy mean that price will come down. Powered by blockchain technology and smart devices, microgrids will begin to become more frequent where people trade energy they generate with their neighbours. Peer to peer trading of energy might become as common as running water is today. The energy customer of tomorrow might sell excess electricity that came from the rooftop and stored in their car onto the grid. Development and implementation of vehicle-to-grid solutions has already begun.

Adjusting to a new reality

Energy companies, whether it is the traditional utility or energy retailers might have to adjust to this new reality of microgrids and peer to peer energy trading. Although the need for their traditional services might not be as needed as it is today, they are trusted as experts in electricity and their brands might take advantage of that brand asset. Energy as a service will become an invaluable part of the business model and it will be interesting to follow the development of the unique value propositions that the future energy brands will offer their customers.

 

The basic energy marketing rules that many fail to apply

CHARGE Energy Branding Conference
The three rules of energy marketing

Before energy suppliers begin the journey of their energy marketing, there are multiple issues that need to be addressed. The most basic issue and the foundation of any energy brand is the general idea of what the brand is about before creating and delivering the marketing message. Branding is the basic strategic philosophy any organisation should build their whole operations around.

Create a unique value proposition

The key to any successful brand is the unique value proposition. Many energy brands are abandoning the lowest price race to the bottom and have started to emphasise on creating an emotional connection to the customer. Customers are attracted to them because of a vision that goes beyond simply providing a commodity. Anyone can become an energy supplier and the secure supply of energy is a given in liberalised markets. The best energy brands have created a unique, compelling reason for customers to become their customer by creating a bond on the emotional level.

Know your customer segments

Multiple branding case studies from the energy industry have shown that effective energy marketing comes from a good brand that is a credible source of information for the customer.  There are multiple methods of branding energy but there is not a secret formula for a successful retail energy strategy but rather a toolkit that any brand should use for success. One of the most important tools for utility marketing to become successful is brand segmentation – know who you will be talking to and know how to talk to different segments.

Be consistent and authentic

Once the segments have been identified – you can know how your energy brand can communicate its value proposition to the different brand segments. From segmentation, effective branding strategies can be developed. There are brand building companies and retail energy consulting firms that help with branding but the brand needs to be authentic in all their communication with the customers. Look at any branding case study from the energy industry and you will see that all effective utility marketing (or energy marketing) programme comes from a credible source – an effective energy brand.

There are multiple technical challenges for the energy sector and there have always been. But the biggest challenge for the sector is knowing how multiple stakeholders perceive utilities and services and products for the sector. To be able to be effective in marketing energy services, utilities need to be able to understand the customer and communicate through a powerful energy brand. This same principle applies to different parts of the electric energy sector – from generation, transmission, distribution and sales of electricity.

 

A Unique Energy Conference in Iceland 2018

CHARGE Energy Branding Conference
A relaxing time in the Blue Lagoon at CHARGE

CHARGE is a bit unique in terms of location. Technically, CHARGE Energy Branding is an energy conference that is located on two continents. It is an energy conference in Europe as well as being an energy conference in America. Iceland rests on the tectonic plates of both Europe and America. But the conference is also an international event in terms of presenters and attendees. The location is not as central as energy conferences in Europe or North-America, the trip to Iceland is not that much further than travelling between big cities on both sides of the Atlantic. Just add an hour or two and in return, you will have a more spectacular energy conference experience than anywhere else.

Reykjavik is not known for neon lights but more noticeable are the northern light illuminating the night sky from early September.

Being technically both an energy conference in America and an energy conference in Europe has some perks. For one, people can see with their bare eyes where the tectonic plates are drifting apart but it also means that Iceland has a lot of geothermal energy that is widely used both for district heating and more importantly

On the way to or from the international airport in Keflavik, you could enjoy the unique experience of the Blue Lagoon spa – maximizing the exhaust geothermal heat from the nearby geothermal power plant and is known for its healing powers.

If you have a bit more time, we suggest that you do it like a local and enjoy some of the multiple community swimming pools. Each neighbourhood in Reykjavik has its own swimming pool. If you don’t like swimming that much, take advantage of the several hot tubs each pool has and lie down in the cool tubs in between. The pools that are located closest to the conference hall are Sundlaug Vesturbæjar in area 107 where deals are brokered and decisions are made, Sundhöll Reykjavikur in area 101 where hipsters meet and sweat off last evening or go out of the capital to the municipality of Setjarnanes to relax while enjoying a great view of the Atlantic Ocean.

How will Shell-First Utility sell electricity in the UK?

A new beginning for Shell? Photo credit: Shell
A new beginning for Shell?
Photo credit: Shell

It’s almost the end of the year and we can say that the recent news of First Utility being acquired by Shell is the biggest energy branding news story of 2017. But it does not come as a total shock, at least not for people who attended CHARGE2016. First Utility has been operating in Germany for few years under a special license agreement with Shell, selling retail electricity to customers under the name of Shell PrivatEnergie.

Maik Neubauer, former CEO of First Utility in Germany, who was responsible for the Shell PrivatEnergie brand spoke at the World’s First Energy Branding Conference in Iceland in 2016.

In his presentation, Maik talked about how First Utility leveraged the Shell brand when entering the German energy retail market.

Maik sat down in the Engerati studio outside the conference hall to discuss the First Utility and Shell collaboration in further detail.

We are already lining up some interesting speakers for CHARGE 2018 in Iceland. If you want to stay ahead of the curve and get a global overview of what is happening in the branding of energy.

Making sustainable energy relatable

CHARGE2017_day1 (110)
CHARGE Energy Branding 2017

At CHARGE, we try to bring to the table the best practices in Energy Branding and give a glimpse at what the best energy companies in the world are doing in terms of customer engagement and making their products and services more tangible by relating to the customer on human terms.

A part of the conference has focused on how companies are branding green outside the energy space. Companies that are focusing on sustainability are not only looking at becoming clean energy brands or branding green electricity by letting the customer know that they are using the best green energy in the world to make their products or services. They are looking at how they can cut costs by being sustainable. Being sustainable can often cut electricity used or energy consumed.

It is often the case that it is not the sustainability itself or being good for the planet that increases brand value in itself. As it has been discussed at the energy conference, consumers are often inadvertently interested in energy itself and how companies are sourcing their green energy. The clean energy coming from the rooftop of the store you are shopping at creates some value in the mind of the customer. Energy marketing conference is one way to put it, it is not only about energy retailers trying to catch the attention of the customer – branding or marketing energy is also a way for retailers or manufacturers to tell a unique story to the customers. And in a way, it is a green energy conference although it is just one of many topics discussed. It is a utilities and energy conference in the widest sense. Sustainability is an energy issue in one way or another. It reflects on how companies can become sustainable on the balance sheet by behaving thrifty when it comes to energy consumption. And by telling that story, brands can increase their value in the mind of the consumer.

Hosting the conference in Iceland means that it is the perfect place for a global energy event. The country is known for its production of clean, renewable energy – both hydro and geothermal. Being placed in the middle of the Atlantic Ocean, Iceland is also the perfect place to bring together key decision makers together for an executive forum of people from all over the world. The energy space is often localised due to historical reasons and although the borders dividing the energy space are shrinking fast – there is a lot to learn from each other.

Join us in Reykjavik, Iceland where CHARGE will be hosted for the third time in September 2018. It will be one of the most memorable energy conferences of 2018. Iceland is exotic yet accessible with daily direct flights to three continents.

 

 

Mind the perception gap

the_energy_utility_brand
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

market_sementation

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.

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.