Energy companies need to play the loyalty card

Having seen the latest news about EDF’s £2m fine for poor customer service, it is clear that EDF are not alone in their customer service failings and that the energy industry as a whole is playing a dangerous game by failing to focus on building long-standing customer relationships.

Like any other commodity, customers can purchase their energy from a number of providers and thanks to comparison websites, the majority of customers are now perpetual ‘switchers’, simply moving onto the next deal that saves them money because they have no other way of differentiating between suppliers. As a result, brands are consistently having to attract new customers, simply to replace those leaving in droves in search of the next money-saving deal.

We all have brands that we would avoid like the plague based on personal experiences of bad service, unethical doorstep selling etc and I suspect that few consumers could easily identify any positive associations with energy companies.

Why energy companies think that they are different to every other business out there and don’t need to invest in their customer care is beyond me. It is clear that there may be a lucrative opportunity for any energy supplier that is willing to stand out from the rest and make an effort to improve customer service.

Brands in this industry need to be looking for ways to improve brand reputation that goes beyond dual fuel discounts and direct debit savings and look at engaging with customers on a far deeper level that will in turn generate some loyalty and distinction to other suppliers.

I wonder what a difference £2m would have made to customers had it been invested into improving customer service delivery and brand building activities.

Is it more important to be green or to develop your people?

We recently conducted a market review and found that at least one major retailer is suffering from high levels of illiteracy but has no schemes in place to improve it and I think it is about time that brands became more accountable when it comes to staff skills and development.

With consumers becoming more environmentally conscious brands are under increasing scrutiny to show that they are behaving ethically and as a result are taking steps to become more environmentally friendly. But what has happened is there is now far too much focus on going green as a way of being socially responsible when in reality, it covers much more than this. It spans across processes and people as well as the environment and it’s the combination of a variety of activities that results in a ‘good’ and ‘ethical’ brand.

How can a brand expect its staff to behave ethically and responsibly if they are not being treated properly themselves? Many brands think that social responsibility starts with the environment and Third World countries, when it really needs to start from inside the organisation first for it to have any sustainable effect. Green is good, but its only part of the story, and without a consistent CR strategy that embraces internal staff needs, any activity will simply been seen as a shallow attempt at greenwash. I’d be interested to hear your thoughts on this.

Turning a brand into a legacy

This week marks 100 years since Audi launched and this got the team talking about brand heritage and how to leverage it for brand building. There are a number of age old brands currently in the market and when we looked into this further, we realised that many well known brands had a ‘big birthday’ his year including M&S with its Penny Bazaar campaign and Sainsburys is also reminding us of its 140 year legacy.

Brand heritage is an extremely valuable asset when it comes to reviewing consumer brand strategy as it clearly demonstrates a long held trust in the brand, but experience has shown the team here that sometimes brand owners see brand heritage as simply another ‘hook’ to boost sales, and don’t always see it as an opportunity to reinforce and build on the strength of the brand.

Mark Ritson made a good point in his recent article in Marketing Magazine when he said that ‘British marketing’s greatest weakness is its Anglo-Saxon disregard for history and provenance’ and certainly in our line of work, we’ve come across many brands who have struggled to find the most effective way to maximise their brand legacy in a way that builds long-term brand reputation.

Whilst I am not against using anniversaries for tactical sales promotions, I would urge brands to consider how they can use their historical legacies to reinforce the underlying values that make the brand what it is, as it is these aspects that people identifying with and it is those aspects that will keep the brand strong in the years to come.

Re-branding or Re-positioning?

July sees the completion of Aviva’s re-branding of Norwich Union, after several months of intensive marketing and advertising to help customers make the transition to the new brand identity. When the re-brand was first mentioned, many opposed the idea because the Norwich Union had such a strong legacy and people knew it, relied on it and trusted it, something which is critically important in the financial services sector. Having said that, outside of the UK, Aviva had a strong brand identity and so the decision was made that the strength of this brand could overcome the downsides of losing the Norwich Union branding, which in reality, was limited somewhat because its name had localised connotations.

It is important to acknowledge that in any sized business, re-branding is not without risk and shouldn’t be rushed into. Recent coverage regarding Santander’s decision to re-brand Abbey and others in their portfolio show it can be problematic even when there are sound economic reasons for the brand owner to do so, particularly where the brand has considerable heritage.

For many businesses, re-branding is sometimes a good idea if the business had a very poor reputation that could not be turned around (we occasionally have to advise clients to do this), however it is possible to change consumer perception of the brand by re-positioning instead. A good example of re-positioning, or redefining the brand promise, is M&S with “Plan A”, and shows why re-branding is not always required.

We often advise clients considering re-branding to take a step back and look at why they are wanting to make the change in the first place. If it is to do with the reputation of the brand and the way consumers perceive it, it is important not to assume that changing the name will make all the problems go away. If your brand promise is wrong then no matter what brand name you opt for, or how many times you change it, the customer will always come to the same conclusion and the brand will always fail to deliver.