In the pipeline

The branding opportunities that arose from the privatisation of utility provision mean that companies are taking communications seriously, and new technology will offer further potential for differentiation. Matthew Valentine reports

We may all find it hard to imagine life without utility supplies, but that doesn’t make it any easier for the companies providing them to create effective branding. As consumers we tend to take a polarised view of gas, electricity and water suppliers, either ignoring utilities or complaining about them. This creates a headache for the companies when they attempt to win new business.

When utility companies supply our water, electricity or gas as we expect – which occurs the vast majority of the time in the UK – we scarcely think of them at all, says Elmwood managing director Nick Ramshaw. However, when we do think of our utility suppliers it is invariably because we have an issue: there has been a problem with billing or meter reading, we are moving house and encountering problems with our power supplies, or we think we are paying too much for what we get.

‘It is a massively competitive marketplace,’ says Ramshaw. But, unlike many other competitive sectors, utility companies find it difficult to differentiate what they can offer. There are strict regulations about what can and can’t be done, meaning that a compelling unique selling point is hard to come by.

Moreover, consumers increasingly favour price comparison websites as their preferred method of choosing a utility supplier. With little of their corporate identities on display, suppliers which are not well-rooted in the minds of homeowners have just a small logo and their prices to tempt in new business.

‘Utilities are left with three things they can do,’ says Ramshaw. ‘They can compete on price; they can do the basics very well, which many don’t yet do; or they can have some kind of big idea to connect them to people at an emotional level – they don’t seem to be doing that very well, either.’

The bad news for utilities is that they might be also facing similar problems to those that have hit the banking industry: they could be held responsible for global increases in energy prices that they may not be directly responsible for. And any negative stories such as leaks or accidents can quickly reduce trust in a brand.

‘They have to raise their profile in consumers’ minds, by good word-of-mouth and strong reputations,’ says Ramshaw. He says utility companies must provide ‘brilliant basics’ in terms of getting their day-to-day transactions with customers to be as smooth and reliable as possible.

Simon Bailey, UK chief executive of The Brand Union, points out that there is little scope in companies claiming that their gas, electricity or water is better than that offered by rivals. ‘It’s not even like petrol, where there can be a claimed difference in product performance,’ he says. ‘These utility companies need to go from being resellers to being proper service companies.’

Such a change means offering a vastly improved quality of service, and that becomes most apparent when companies need to address problem issues. Bailey says that Thames Water is currently providing a good example of how potentially negative news can be handled well. The utility group has been openly criticised over its leaking network of pipes for years, and is now engaged in a massive engineering project to replace miles of cast iron Victorian mains pipes. Unfortunately for Londoners, this means roadworks on a similarly massive scale.

Thames Water has recently introduced new signage that aims to communicate more effectively just what is going on, why it is important and what benefits it will bring. Fresh and colourful posters, designed in-house to corporate identity guidelines created by The Team, now grace the sites of roadworks around the capital. Thames Water corporate communications officer Andrew Boyd says that the company’s branding has evolved considerably since the company was acquired by new owners – a consortium of businesses – in 2006.

‘We had the freedom to develop our own look,’ says Boyd. ‘It had been very much of a piece with the branding of RWE, the previous owner.’ New fonts and colours have been brought in for all corporate communications, and it is these that are used on the colourful new information posters highlighting the Victorian mains replacement project.

‘It has to carry a very straightforward message that tells people what we are doing. We have standard signs for each type of project. It might be a flood relief scheme where we are fixing a sewer, for example. There will be a couple of lines explaining what we are doing, and if there is room we will put it in context,’ says Boyd. ‘This might come in the shape of a bit of education. We can tell people that we have 68 million kilometres of sewers.’

The signs might also explain that just because there is nobody working at a site at any given time, that doesn’t mean nothing is happening – water samples from roadworks must sometimes be sent for analysis before further work can be done, or new tarmac must be allowed to dry before roads are reopened. At the heart of the problem is the fact that more than half of London’s mains are more than 100 years old, and a third date back to 50 years before that.

‘If you ask people what they associate with Thames Water, a lot of them would still say leakage,’ says Boyd. ‘We want to respond to that and show we are working hard. It is all about showing commitment and taking responsibility.’

Many other utilities companies might be advised to follow a similar strategy, according to strategy director Andrew Pinkess of Rufus Leonard. The design consultancy has recently been appointed to work on digital projects for British Gas and has undertaken rigorous analysis of the sector. ‘Organisationally and culturally, a lot of utilities companies are coming from an area where they didn’t have to compete. Branding was a sort of default setting, for proving who people were when they turned up on your doorstep,’ he says.

Since privatisation, and especially since the rise of the aggregator websites for price comparisons, an exciting new field of branding work has opened up, Pinkess says. ‘They have to work harder to achieve standout, so there has been change. N Power has now got Wallace and Gromit, and EDF is sponsoring the Olympics,’ he says.

However, utilities hoping that a Green agenda would help differentiate their offer might be out of luck. While some consumers might have let their Green concerns slip due to straitened circumstances during the recession, most are beginning to take the issue for granted, says Pinkess. A commitment to sustainability might not be the final arbiter in decision-making, but rather a qualifying criterion that all prospective suppliers will be expected to meet.

Pinkess also disputes the theory that aggregator sites detract from the importance of branding. ‘Brand still plays a big part if you are using aggregator sites,’ he says, adding that other business sectors, such as insurance, use them effectively. ‘We work with Churchill, which has gone on to aggregator sites and done very well from it. As a consumer, you don’t always congregate to the cheapest. You want somebody you know and trust. People still want the reassurance of a trusted brand, otherwise what happens when you have to call an engineer out?’ High-profile sponsorships and advertising campaigns are key to nurturing that level of recall and trust, he says.

But one area where Pinkess believes utility companies must still make a better effort is in their pricing. ‘The pricing structure is absolutely bewildering. It’s not customerfriendly, and in branding terms it’s a missed opportunity. Mobile phone operators and people like Sky have solved that by bundling things together into packages,’ he says.

Such an approach could also help customers work out exactly where they might save money, which is not always a clear-cut calculation at present. When faced with a gas bill from a new supplier, for example, it is difficult to establish whether it would have been more or less expensive than the old supplier, as varying weather and conditions, as well as price, would be different over any comparable period.

Coupled with future technological developments, such as ‘smart meters’ which give householders real-time measurements of energy units being used, a more open and effective pricing structure could put consumers in far better control of their energy consumption. In theory, consumption could be broken down to the extent that users know how much power each domestic appliance is using.

‘To get a smart meter in every house will take quite a few years, but people know what the point of them is. You will be able to adjust your behaviour in real time,’ says Pinkess. That puts energy suppliers, and the level of service they offer, in a position to have more influence over consumer choice of, say, fridges, washing machines and audio-visual products.

‘It will become a more interesting category for brands,’ he says. ‘Rather than being a supply, pricing and distress service, it’s going to be an area with technology and control elements to it. It could be a management tool for all sorts of other brands that are in people’s minds. It gives an opportunity for energy suppliers to be more accessible and attractive.’

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