How to prove the higher price is right

Bigger bills make big news and the media have savaged hikes in utility rates, transport fares and the BBC’s licence fee. David Quainton examines how organisations can manage negative coverage of price increases

'£180 fury at new TV licence poll tax'; 'Power rise hits five million: Scots put up prices again'; 'Rising cost of oil pushes average gas bill past £500'. These are just a selection of raging headlines from recent weeks on the spate of inflation-busting price rises to hit consumers' wallets.

Predictably, the media will tend to lead on the extreme calculable outcome. The challenge for PROs is usually to point out that the story is not so simple.

Any price hike carries an inevitable backlash – it might be MPs talking up a cause, or pensioners wheeled out on national TV claiming they will never again be able to make a phone call, ride a train or pay for electricity. 2005 has been a year of price rises.

Alongside petrol topping 90p a litre, various power companies have revealed soaring increases, generating acres of largely negative copy.

When the BBC announced its planned licence fee increase earlier this month – a rise of 2.3 per cent above inflation over several years – figures of up to £200 were splashed across front pages. In the following days, leaders, letters and commentators bemoaned the proposed increases. The message was clear: price hikes are 'a bad thing'.

More money, more quality?
But the knee-jerk coverage has passed, and BBC press officers see it as their time to shine. 'We know from research that people are prepared to pay more for better service,' claims BBC head of media relations Sarah Williams. 'The key thing is trying to explain increased costs are a necessity.'

Indeed, press conferences around the announcement were centred on the theme that more money brings better quality. Despite the media onslaught, they seem largely to have worked – as PRWeek went to press, the BBC had received only 35 direct complaints about the proposed rise.

Williams suggests weathering the immediate media backlash is an inevitable part of any price hike. But could the Beeb have avoided much of its negative coverage?

'The problem was in announcing price rises over ten years,' says British Gas senior media relations manager Alan McLaughlin. 'That set the BBC up for a fall. You should never talk about prices that far in the future.'

He argues that price rises are better delivered in a piecemeal fashion, to make them less headline-friendly. 

'It needed to provide more detail,' says The Times media editor Dan
Sabbagh. 'The slide presentation on the day of the announcement was imprecise. It lacked detail and conviction.' He argues the BBC could have managed expectations a little better. The media were taken aback at the scale of the rise only months after the corporation had already mooted increases of inflation plus two per cent.

But the BBC's Williams sees things differently. 'I think the public were fair,' she says. 'The Murdoch press, as  commercial competitors, were negative because they have an agenda. The Guardian on the other hand was much more balanced.'

Guardian columnist and former Panorama editor Steve Howlett says the corporation slipped into jingoism. 'When it was put under scrutiny, the BBC didn't deliver. It starts talking about "£1.6bn for quality content" – but that sort of figure is so enormous it  means nothing to anyone; it's just cobblers.'

Daily Express consumer editor Graham Hiscott stresses the general importance of coming clean with the press. 'We want all the information available. The worst thing you can do is leave something to uncover, because then you will be accused of hiding it.'

Daily Telegraph economics correspondent Malcolm Moore echoes the sentiment. And singles out British Gas for handling its price hikes poorly. 'It made excuses linked to a lack of North Sea reserves, but that didn't justify the level of the rise,' he explains. On the flip side, he believes Powergen is one company that has got the balance right.
'It offers other, price-balancing schemes to soften the blow,' he says. 'And it is always accountable, putting its chief executive on the stand to answer questions.'

Mayoral responsibility
If a central figure admitting liability tends to make the message more palatable, then Transport for London PROs has a dream solution in Mayor Ken Livingstone. 'The mayor has a good
relationship with the press. He is open and honest,' agrees TfL deputy chief press officer Stephen Webb. 'Fare increases are always high profile, so you need someone who can answer the critics.'
TfL's 2006 increases were set out this month. They were not popular, but did receive balanced reporting in the press. The reason was not simply Livingstone's charisma, but the strong message that the rises were avoidable if customers switched to Oyster cards.

'It's simple carrot and stick,' says Webb. 'You've got to offer something good as well.'

However, the best-received price hike in recent years was British Telecom's increase of the minimum fee for phone boxes. The rise from 10p to 20p in 2000, and then 30p last year, was delivered with the promise of benefits in return. Although the price for short calls was higher, longer calls became markedly less expensive from phone boxes.

'We trialled the second price rise in the South-East last year,' says BT senior media relations manager Les King. 'A campaign highlighted the positive aspects and we made ourselves available.' For their efforts, King and his team won internal awards, acknowledging the campaign's success. 'Accentuate the positive,' he advises. 'But always be honest'.

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