News Analysis: Energy firms try to curb cynicism

In a market where the main differentiator is price, how can PR help to persuade households to switch their energy supplier? Simon Ellery looks at how Britain's competing companies are revising their strategies.

Gas and electricity companies are not enjoying the best of times.

Increases in wholesale energy prices and spiralling bills across the sector have put energy firms in the firing line of the 'Rip off Britain' brigade.

Last week, MPs slammed their track record on the highly charged issue of disconnection. The influential trade and industry select committee called on companies to make root-and-branch reform or face a ban on switching off households' energy supplies.

British Gas's reputation has suffered particular damage following the deaths of two pensioners 14 months ago after their supply was disconnected for late payment of a bill.

Companies review PR

As the major suppliers come under the spotlight, each has reviewed their consumer PR agency support. Npower has this week appointed Ptarmigan to help it inject more 'personality' into its brand while British Gas is offering £500,000 for an agency that can revive its reputation as the UK's leading provider of home services.

Powergen has also moved to add character to its image through humour, having handed The Red Consultancy a brief to flesh out the brand's 'emotional' side at the end of last year.

Consumer watchdog Energywatch has been the most vociferous critic of the industry's recent practices.

Director of communications Adam Scorer points to a catalogue of failures including poor and inaccurate billing, failure to identify vulnerable consumers, poor debt advice, and flawed and unsupported applications for disconnection warrants.

Scorer is forthright in his advice, saying: 'A proper PR agency doing an honest job would tell them the appalling damage that bad consumer relations is doing to their reputation.'

The falling standing of British Gas was compounded with the revelation in December that price rises have resulted in the firm losing almost one million customers.

Npower, Powergen and EDF Energy, a sponsor of the London 2012 Olympic bid, also introduced inflation-busting price rises last year.

The companies blame the rise on wholesale rate increases. To limit the fallout they have offered to freeze prices to 2006 and cap prices for a premium payment.

According to Energywatch, UK gas prices have risen 19 per cent in the past year, and it estimates that Britain's total winter fuel bills have risen more than £5bn.

So how can PR go about wooing consumers?

Powergen's use of comedian Simon Day to give energy efficiency tips marks an effort to inject humour into what is fundamentally a commoditised market. Parent company E.ON UK retail PR and internal comms manager Nick Lakin says the media has a cynical view of energy firms but that PR can help build goodwill with consumers.

'PR campaigning is a balance of information activities and building the emotional connection, particularly through regional media as customers are spread out,' he says.

But measures that resonate involve caring for vulnerable members of the community. Given the nature of the industry, energy suppliers are well placed to win plaudits for behaving as responsible companies.

A key age group targeted by Powergen is the over-60s, to whom it offers a fixed rate tariff called Staywarm. British Gas gained positive coverage over a trial scheme run by the fire service in West Yorkshire offering free carbon monoxide detectors and an annual gas safety check.

One company that has prospered despite the difficult climate is Scottish Power. Group director corporate communications Dominic Fry thinks PR plays a key role in the firm's image 'provided you act responsibly on areas such as fuel poverty and dis-connection'.

Fry places a great emphasis on corporate social responsibility (CSR) and points to action the firm took following a storm in1998 that cut off 160,000 consumers. The £20m repair programme that followed involved close consultation and building community facilities.

'It's not about face painting or opening village fetes,' he maintains.

'It is bottom line business benefits that I can justify to the board.

It's about long-term partnership at the point of need in the community.'

Scottish Power is hardly unique of course in flagging up its environmental credentials, but Fry claims that the company has the best 'green' tariffs in the sector, with big investments in wind farms and hydropower, along with tree planting schemes.

If its latest results are anything to go by, this approach has been a success, although being one of the cheapest priced still appears to be a factor.

Last week it reported better than expected profits boosted by the news that it continues to add up to 100,000 UK customers each month. It has attracted one million customers in the past year.

Restoring trust

But with customer relations low across the sector, each firm continues to face PR challenges. Daily Express consumer editor Amy Vickers says she constantly fields calls from consumers angry at price rises imposed by the gas and electricity firms.

'Do you waste money trying to repair your public image when all your customers want is a better service?' she says. 'People do not care about the brand. Most people do not want to switch, because it is a hassle. They just want cheaper rates.'

Amid investments in branding and CSR, energy suppliers can regain trust by refraining from both rash disconnections and hiking bills at the first possible opportunity.

SUPPLIER STATISTICS

Company Slogan Customers PR Agency

British Gas Doing the

Right Thing 18m Under review

Npower - 6.3m Ptarmigan

Powergen Positive Energy 6m Target and MCG PR

Scottish and

Southern Energy - 5.8m All in-house

Scottish Power The Energy People 5m Tulchan and

Big Partnership

EDF Energy Altogether more

rewarding 5m Shine and Brunswick

Source: Customer figures provided by individual suppliers

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