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The importance of clear communications as a utility brand

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Whether you saw it on the evening news, read it in your morning paper or heard it on the radio, you can’t fail to have heard that thousands of consumers are soon to face an increase in their energy bills, with EDF, Npower and Scottish Power amongst those set to hike prices in the spring.

So, what should these brands be doing to ensure customer satisfaction and, ultimately, customer retention?

Customer satisfaction trumps price

At JJ, our marketing experience tells us that better informed customers are better satisfied customers. There’s no getting away from the fact that it’s price that’s the most important consideration for most customers when choosing a deal, yet it may surprise you to know that satisfied customers are much less likely to switch – even if they can get a better deal elsewhere, as shown in this
Ofgem paper. While utility companies have little control over external factors that influence price, they can affect their customer communication strategy, which is where the marketing departments should be flexing their muscles.

According to a recent Ofgem survey, only 4% of consumers had been contacted by their current supplier (excluding to make a complaint or to give a routine meter reading), begging the question of whether these brands are missing a trick. Let’s face it, utility providers are selling a commodity that is exactly the same as their rivals, so brands need to work hard to retain their customers. With utility companies often investing six to eight years of their gross margin on acquiring (or reacquiring) customers, customer retention is vital to making profit.

The new kids on the block

Unicorn Power By First Utility

Earlier this year, First Utility launched a tongue in cheek campaign, suggesting that they had developed a new product, ‘HD Electricity’, powered by Unicorns, which was set to ‘revolutionise power across the UK’.

The claim was of course nonsense, but the message simple – all electricity is the same, so why should some consumers pay more for their energy more than others? In 2016, First Utility, alongside Ovo Energy, strengthened their market share, with consumers increasingly choosing to switch to suppliers outside of the big six. The difficulty it seems is in persuading consumers to make the decision to switch.

Lack of brand loyalty in the utility sector

The fact that utility brands lack a unique selling point to attract and engage customers results in a lack of brand loyalty. Yet, interestingly, recent Ofgem research suggests that most consumers are not willing to switch for anything less than an annual saving of £100, so it takes more than just a better price point to persuade them to do it. It’s a theme that We Buy Any Car have exploited in their more recent campaign – pitching time as a more valuable than money.

Customer service and effective communications are key to any brand’s customer retention strategy, and this should be no different for the UK’s utility market. With the wealth of customer data at their fingertips, personalised notifications of the impact of a price increase seem like an obvious, and simple, solution. With the knowledge that most consumers are unwilling to switch for small savings, marketers should feel empowered to be open and transparent with their customers, building their reputation as a trusted adviser and someone they can rely on.

Engagement breeds advocacy

Marketing a utility brand isn’t about being clever, or playing word games according to the President of Egan Energy Communications, instead it’s about making communications ‘as simple and accessible as possible,’ Price increases should be embraced as an opportunity to engage with consumers and demonstrate transparency and honesty which builds trust and advocacy in customers. Moreover, utility brands should be taking a multi-channel approach – communication goes beyond the traditional quarterly bill, as well as email and DM, the sector should be embracing social channels, TV and a wider digital strategy. For many years, utility brands have focused their above the line advertising on acquiring new customers – a costly exercise as we already know. Instead, energy firms should look to engage with existing customers to drive retention. British Gas has recently announced plans to introduce a customer loyalty scheme for existing customers to encourage them to stay with the brand – a scheme that, whilst being met with some criticism, is a perhaps a sign of a shift in focus for these brands.

Whether new customers or existing, customer satisfaction is the goal. After all, satisfaction means they’ll stay.

Want to talk about how you could improve your customer communications strategy? Get in touch.