The energy industry faces a great problem. Energy companies are perceived as faceless, heartless entities. To put it mildly, customers hate them. But why is that?
A big part of the problem is that energy companies have not been paying attention to branding. They spend a lot of money on their brands, but they don’t view branding as something that is part of their DNA. Branding in energy has often been siloed away as the
private matter of the marketing and communications department and the image-building has been outsourced to advertising and marketing agencies.
It does not matter how much is spent on funny ads. All marketing activities need to rely on a well-defined brand. Every organisation is involved in branding, whether they like it or not. Brands are defined by consumers and you brand your services by everything you do. Clever ads or massive corporate social responsibility activities might raise awareness, but it also builds an image and gives a promise in the mind of the consumer that needs to be fulfilled. There must be a balance between promises made and promises kept. Customers don’t like cheques that bounce any more than the utilities do.
How can you brand a commodity?
Energy is a commodity and a commodity is always the same – it doesn’t matter if it’s frozen orange juice, pork bellies or an energy futures contract. But you can differentiate a commodity. When you have differentiated a commodity, you have created a brand. Take a commodity, add a story, an experience for the customer, put a name on it and you have a brand. There are banana brands and there are salt brands. Electricity is just the same. You can differentiate right at the source and sell green energy and you can differentiate on the service level. Brands are defined in the mind of the consumer and the key is to create a different experience than the competition. There are many brands in the UK market that have been doing an outstanding job in their branding. Brands such as Ovo, Octopus, Ecotricity, Bulb and Igloo.
The branding challenge of the big six
The brands I mentioned are all perceived favourably by their customers and a clear majority of their customers are fans and promoters of the brands. But they all have found the magic flute of energy – starting with a clean slate. Most challenger brands have earned most of their customer base, meaning their customers were impressed by their marketing efforts and made an informed decision to switch. The promises the brands have made through their marketing efforts have been kept and that means happy customers. The big six have an unhappy customer base that has been scarred in the past with promises not kept. It is an enormous task for a brand that has been perceived as cold and distant to try to change to become perceived as being warm and cuddly overnight. Customers are already suspicious of them and would most likely ask “why do you care all of a sudden?”
And then there were five
The SSE and Npower merger will be an interesting case for the branding textbooks. There is a great opportunity to start over again. An opportunity to take the strengths of the old brands but leave the weaknesses behind.
The question is which way the new brand will go: will the new brand distance itself as far as possible from the old brands and the other big five brands? The points of differentiation must be followed through and shine through every part of the organisation. For example, being a green brand is not a matter of choosing the right shade of green paint for the headquarters. Every process needs to be green and all parts of the supply chain must be green or sustainable.
If the new brand is to show a new beginning, it must show in action that it is different from the parent brands. But the most important thing to remember is that branding is not just doing the groundwork and launching a new identity. It is about implementing and follow through. Brands need to be monitored and measured constantly. Brands live and breathe in the minds of consumers and what matters is how they are perceived by consumers.
This article was originally published in Utility Week