Energy consumers rarely consider where energy comes from or give it a second thought beyond flicking the switch that ignites the lights on their ceilings / gives life to their computers / brews their kettles / warms their ovens…the list is endless.
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But as soon as prices rise or disaster strikes the energy industry is thrust to the forefront of consumers’ thoughts, leaving them with a lasting gloomy image. So why don’t consumers consider energy beyond their daily need and the headlines? Or perhaps the question should be – why should they when energy companies don’t engage with their consumers?
Marketing and advertising guru Peter Economides, who spoke at the European Utility Week conference last week, says it’s telling that there is not one energy company in the top 100 brands in the world as listed by InterBrand, a leading brand consultancy.
"I don’t think they are focused on their consumer. It is very much an invisible industry; there is no consumer engagement," Economides says.
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Social media equals possible PR disaster
In the UK energy companies have become a figure of hate as they one by one announce price increases. British Gas, owned by Centrica, faced a particularly bad week this month, after announcing an increase of 9.2% and then taking to Twitter for a customer Q&A in a somewhat naive attempt to be "open and transparent". Quite understandably it ended with British Gas being the butt of consumers’ jokes and with its social media team fearing for their jobs.
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By GlobalDataDespite this failure, it’s not a foolish thing that British Gas tried to engage with its consumers, it was all just too little too late. It’s ill advised to finally open up a dialogue with your customers immediately after you’ve just knowingly upset them. Timing is key.
When done properly social media can be a way to open up a conversation between the consumer and the company, but Economides cautions that you can get into some "very deep water" if you don’t know what you are doing.
He says: "You need to really look at your brand and know what your narrative is. So that you are being consumer relevant, so consumers are relating to you."
This is a golden rule that can be applied to any company’s overall marketing strategy.
He adds: "You have to be prepared, and to me the essence of being prepared is knowing in your own mind exactly what your brand narrative is and living it inside your company."
Uncompetitive markets leads to lazy consumer relations
Perhaps energy companies have become complacent in their approach to customers because often there is little competition to worry about, unlike in other markets such as mobile phones.
"The more competitive a market becomes the more people focus on how to relate to their consumer, right?" Economides says.
In the UK customers are supplied mostly by the ‘big six’ and figures show they aren’t too concerned about switching. According to a 2013 Ofgem customer survey, 77% of people who rent their home have never changed energy supplier. Another study by the Department of Energy and Climate Change (DECC) found consumers changing electricity and gas suppliers fell by 17% and 14% respectively in the year to June 2013.
But Economides warns in the long run "consumers can make or break you" and as British Gas found out there is such a thing as bad PR, and with companies such as www.uswitch.com making it easier for consumers to switch, these figures could go in reverse if energy companies don’t start engaging consumers.
Changing attitudes
There are signs that attitudes are changing. Earlier in the year leading UK energy supplier npower’s chief executive Paul Massara said he wanted to make the company a leader in customer experience by 2015, investing £200m in customer service and setting up a customer-focused marketing strategy, after it was rated the worst energy provider in the UK for the second year running by Which?
In September the company, which has also announced price increases of 10.4%, hired former Nationwide head of brand and marketing Alastair Pegg as its head of engagement marketing to lead this new initiative.
Renewable gas and electric supplier SSE also announced it was going to overhaul its customer service and introduce a five point customer charter, as well as use insight from a 5,000 customer survey to develop a repositioning campaign next year.
This shows energy companies are at least aware of the problem and are taking small but significant steps which are vital in order to "take control of the dialogue" that has otherwise been stringently against them.
Because marketing and engaging with consumers is more than just establishing a logo and company colour scheme, as Economides explains.
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