By DR. FRIDRIK LARSEN
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.
Editor’s note: This article originally appeared on the Charging the Energy Brand blog at https://blog.branding.energy/energy-brands-and-strategic-vision/
A pioneer of energy branding, Fridrik was the first person in the world to present a PhD dissertation with a focus on energy branding. Fridrik is the CEO of LarsEn Energy Branding, a consultancy working exclusively on branding for companies within the energy space (www.larsen.energy). He has become a leading authority on branding within the global energy sector. Fridrik is passionate about consumer-centric energy markets. He has served on the board of the New York Energy Week and is on the advisory committee for the European Utility Week where he has lead the track on connecting with customers.
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It‘s more important than ever for the energy sector to become more agile, proactive and customer-centric than ever before. Market liberalisation has created opportunities for new entrants, innovation, new energy sources and increased stakeholder interest in energy have radically changed the energy space for good. This has meant radical changes for the business environment of energy companies. Branding is the strategic philosophy that defines an enterprise and how it engages with stakeholders at any touchpoint. Meet people and learn from peers who are engaged in connecting utilities to the minds and hearts of the consumers.
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