Tag Archives: marketing

Challenges of a decentralised energy market

The energy industry is changing faster now than it has ever before. These changes can in many cases be traced to the focus on renewable energy sources and energy decentralisation. With pressure from lawmakers, energy companies have been changing their energy mix to increase the use of renewable or sustainable energy sources.

Renewable energy branding has changed – it is becoming less of a differentiation for an energy company to offer a high percentage of renewable energy to customers. What has also changed is what customers expect to see from their energy companies in terms of customer service and engagement. It is more important now than ever before for energy market segmentation of customers – especially with more and more consumers in the energy market becoming prosumers. This is why energy companies have a focus on renewable energy and customer relations.

The most effective ways of communicating with energy consumers can be through content marketing, storytelling, advertising or direct contact but it the most important and effective way for communications to become successful is by building a strong brand with a coherent voice as a trusted source of information. People connect to brands.

Energy decentralisation can have two meanings but both of those meanings have had an impact on the energy sector. The decentralisation of the market in general, or deregulation or liberalisation, has meant that some market territories are no longer controlled by a monopoly which produces, transmits, distributes and sells electricity to an end consumer. Markets have been changed in order to increase competition in the retail and generation areas.

This has created new challenges for energy companies. When the consumer has a choice – he is more likely to choose the brand which speaks his language and connects to him in more ways than just supplying energy to the sockets.  This is not only causing a change in the retail sector – new brands that have been established around the transmission part and the distribution parts of the power systems have become more effective in brand-building and communicating to customers and other stakeholders. They have found out that branding is not only a proven way to communicate with the public but also to help people inside the organisations to communicate with each other. Branding has proven to be a valuable tool in breaking the silo mentality within organisations.

Energy decentralisation can also refer to new technologies enabling consumers to produce their own energy. Instead of energy coming from a centralised energy plant, it is all the sudden flowing from the rooftops of homes and small-scale windmills at farms. This addition to the power mix is not only changing the way people think of energy by bringing the production closer to home but is also changing the way energy companies are approaching the market with new strategies.

Electricity brands, in retail, transmission and distribution have had to find new ways to engage with those customers who are able to get energy off-grid. These customers are not only self-sufficient with their energy usage but are also selling power to the grid. This means a whole new means of communications. The average consumer is not an expert in terms familiar to people in the energy space – there is a need for a common language for energy companies and consumers to have their engagements in.

Energy company branding is an important topic for the changing times in the energy sector. Energy utilities are aware of the fact that they are not dealing with meter points but people of flesh and blood that need a deeper, more emotional connection than before.

 

Discovering Hydropower

CHARGE Energy Branding looks at different energy sources from the branding angle – how different sources of energy can be used by utilities to engage better with people.

Dr Fridrik Larsen, the chairman of CHARGE has been invited as a social influencer by Voith Hydro to visit hydropower plants in Portugal, Scotland and Iceland, along with three other experts in the energy field. The aim of the trip is to help people discover Hydropower and

Companies in the energy sector could use the source of their energy as a part of their branding – both figuratively when people are buying electrons but also literally when possible.

It’s not hard to look at hydropower from a branding perspective. Hydropower is often overlooked as a renewable energy source. While solar and wind have received all the glory since the turn of the century, hydro has mostly been left out of the discussion.

  • Hydropower is one of the most attractive sources of renewable energy

  • One-sixth of all energy in the world is produced by Hydropower

  • Eighty per cent of all renewable energy in the world comes from Hydro

Hydro is the original energy source of the de-carbonisation of electricity. Hydro plants were also one of the first off-the-grid power sources. The reservoir of a hydro powerplant is a giant battery which helps balance the output of the plant. So hydro was there long before the trends and has been balancing the grid for over a century.

You can follow the adventure by following the hashtag #DiscoverHydropower or follow Fridrik on Twitter, his handle is @fridriklarsen If you have any questions before or during the trip, you can either tweet at him there or send your question in a direct message.

If you want to know more about Voith Hydro – or are simply interested in photos of hydropower plants, you should click the following links:

About Voith

http://www.voith.com/corp-en/industry-solutions/hydropower.html

Pumped storage

http://voith.com/corp-en/industry-solutions/hydropower/pumped-storage-plants.html

Small hydro

http://voith.com/corp-en/industry-solutions/hydropower/small-hydro.html

Sponsored content

Branding Bananas and other commodities

The most basic requirement for branding is differentiation. But how is utility branding possible when the product itself can’t be differentiated? How is energy market segmentation even possible when everyone is buying the same thing? These are questions that you might use to make an argument that branding for energy companies is a waste of time – the only differentiator is the price. You can only gain new customers by offering a lower price. As the experience from the UK has shown – trying to lead a race to the bottom can lead your brand to bankruptcy.

To demonstrate that a commodity can be differentiated by a brand, it is popular to point to other industries that have gone the branding route. Branded salt is sold at a premium and there is a seemingly endless supply of telecommunication brands active globally. But the best example of a well-branded commodity that differentiates primarily on owning part of consumers hearts and minds are bananas. One brand, in particular, has become synonyms with bananas. That brand is Chiquita. When people are asked to name the first brand that they connect with bananas, its Chiquita. Not many people can tell the difference between regular yellow bananas.

As finalists for the World’s Best Energy Brands Awards have shown, it is possible to differentiate a mere commodity such as electricity.  (follow the link to get a glimpse of some great brand case studies from the energy industry).

Electricity is a basic necessity and it is price sensitive up to a point – the brands that have been the most successful in the market have found a balance between offering a competitive price structure and giving customers a reason to choose a brand that offers something more than just a basic necessity.

Sometimes the commodity itself is differentiated – well not the electrons themselves but the source where the electrons are generated. Say hello to Green Energy Marketing. Clean Energy Industry Strategic Communications is probably the most notable and has been used the longest as a differentiator on the market. But making a clean energy strategic market entry has become more challenging than before since almost everybody on the market is either 100% renewable or offering renewables as an option on the market.

Energy Decentralisation is providing more opportunities as well as challenges to energy brands. Distributed generation and prosumers has changed the energy brand spectrum. Electricity brands are becoming a more flexible concept since customers do not need to be connected to the grid and can do business with electricity brands that only supply them with the tools and equipment needed for the customers to be self-sufficient of energy.

The most important thing in creating a brand in the energy space is to find out how to be different and the most enduring way of being different from the competition is to claim a feeling. In the end – people make their choice by determining who they trust.

The journey from RWE to Innogy

Almost two years ago, the German energy giant RWE spun off a large part of its operations into the subsidiary Innogy. Innogy took over the operations of renewables and networks and the consumer-facing retail operations of RWE’s business. It marked a bold move to face the changing times ahead in energy.  Innogy was to become a DSO brand, a retail brand but more importantly a renewable energy brand. But as the name suggests, Innogy was not to become just another renewable or sustainable energy brand. The Innogy brand made a connection between sustainability and the usage of renewable to innovation.

At CHARGE 2017, Sabine Schmittwilken, the global head of brand at Innogy, spoke about how the transition from RWE to Innogy or rather how RWE wanted to start again with a clean slate and change part of its business into Innogy. As she put it so bluntly and honestly:

“We were completely ignorant of people’s needs, ignorant of global trends. At that time, RWE had invested billions in a new conventional energy park. And then all of the sudden, the German Energiewende came […] All of the sudden we needed a new future and new answers”.

Going through the process of re-discovering their purpose in a changed world – RWE found that renewables would soon become the new normal in the energy space. It was not enough to claim differentiation through clean energy when everyone could make the same claim within ten years. Clean energy market entry is not as unique as it used to be.

To discover what truly could set RWE apart in the marketplace, the company looked back at its roots to its founder Hugo Stinnes, a great innovator and entrepreneur who was considered to be crazy at the time to have the ambition to bring electric lighting to even the poorest. It was considered an impossible challenge to overcome in the early 1900s but was achieved. With the spirit of achieving what is considered impossible, the foundations of the company’s new strategy were put in place.

Sabine went further into what led to spinning what would become Innogy from RWE at CHARGE 2017 in Iceland. It is a good primer in Energy Company Branding and a gives an overview of the process in general. The full presentation can be found in the player below.

Discover more from thought leaders in the energy space at CHARGE 2018 in Reykjavik, Iceland. September 24-25. An Energy Conference in Europe but really close to America. Early Bird tickets are available until the end of June.

Does Geothermal Energy create better Footballers?

Located close to Reykjavík in the Reykjanes peninsula, HS-Orka is primarily focused on geothermal energy both in terms of creating electricity and heating. The vast amount of waste heat that is a byproduct of its generation has created a great opportunity for innovation in further utilising the geothermal resources. From a natural spa to fish farms and other high-tech start-ups, the motto of HS-Orka has been to not think inside the box “there is no box”.

At CHARGE last year, Ásgeir Margeirsson, CEO of the company talked about football and how geothermal energy has created better footballers for Iceland. In his presentation, he showed that there was a correlation between the number of geothermally heated indoor soccer halls in Iceland and the rise of the nation’s national football team up the FIFA rankings ladder.

HS-Orka has focused on progress and the company is passionate about doing better than before and being brave. “There are many ideas that fail but that is alright”. Ásgeir went on to say that there is nothing as waste, waste is simply something that they haven’t found a use for yet.  The key to finding new ways to turn waste into a useful resource, according to Ásgeir, is to have an interdisciplinary discussion between people of different backgrounds both from the power companies and innovators.

Energy brands and strategic vision

 

Retail energy strategy is about finding the right positioning and implementing it. Energy company branding is not simple for energy providers, positioning on the market requires a deep knowledge of how energy consumers behave and how the market can be disrupted. For incumbent utilities, this can be a difficult task since consumers have an already established idea of what the utility is and what it does and how it reacts. The utility company and the idea consumers have about it is changing, both with the entrance of smaller newcomers and changing technology.

The age of consumer choice in power markets

Power providers have been unbundled in most liberalised markets and the challenge for all participants in the market is to unlock customer value by creating brand value that gives the customer a reason to choose. Customers that have been indifferent towards their energy suppliers are slowly but surely responding to marketing programs and branding in the energy space. What has become the most common form of differentiation in market messages on the energy market has been a green positioning, focusing on the renewables that the energy provider can source for their customers.

Renewable Energy Strategies

Renewable energy strategies can vary, depending on the market and how customers on the market perceive renewables. In most countries, solar and wind are considered to be THE sources of renewable energy while sources such as nuclear and especially hydro are branded as sustainable or clean sources of electricity. While solar and wind are still sufficient to power regular homes, the technology is not just there in terms of scale and efficiency to give reliable power to large-scale industrial users. Many large companies are, however, demanding renewable energy to power their production or be the backbone of their services. It does not matter how green/renewable/sustainable/clean the source of the energy is. What matters is that the brand that is promoting the source of energy that it sells to its customers is also a sustainable brand. Being a sustainable brand is not about renewing the colour palette to reflect a greener colour.

Customer engagement strategy

The brands that are able to deliver results in connecting to the minds of consumers are the brands that are delivering a higher purpose. It is not just a matter of the cover – it is also about the contents inside. The truly effective energy brands are about changing the status quo. Effective brands set out to change the world. They identify gaps in the market by thinking like a consumer. Often they are founded by regular consumers that are fed up with the way things are done. From the start, these brands are equipped with a vision. Their strategic market entry is done by a narrow customer segmentation – by being focused on a niche market that they can expand further down the road.

Doing something new

The top companies for customer experience are not myopic about technology. Smart metering is an add-on to the experience but it can not the solution to everything. If a brand is not well crafted and lacks strategy and vision, the execution of the possibilities of smart metering will at best become awkward. Utility analytics and customer engagement metrics are a valuable add-on for the energy marketer and anyone interested in maintaining a brand. Smart metering enables customer engagement metrics and smart customer service but customer engagement and loyalty do not come automatically with smart meters and smart meter data. People engage with brands – not technology. Technology enables further customer engagement in energy and it can help customer segmentation. But technology and user interface must be appealing and easy for customers. To be able to make it easy for customers, companies need a good user interface and to be able to design a good user interface, energy companies need to be able to understand the end customer.

The Future of Energy

The future of energy is customer choice. Customers are already able to choose a supplier in deregulated markets but energy consumers around the world are already able to choose if they bypass the regulated monopolies altogether through microgrids, their own rooftop solar or other ways of localised small-scale production of energy. The future of energy is in the hands of the consumer and the energy companies that are able to build their value proposition according to the needs of the consumers will own the future.

 

 

 

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.

 

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.