This week energy giant Scottish Power announced that it was to raise the price of its electricity by 10% and its gas by 19%, leading to many customers announcing to them that they had decided to switch suppliers. Emma Gordon, head of PR for Fifth Ring Integrated Corporate Communications analyses what the company needs to do to reverse the resulting fallout.
There was a certain inevitability around the announcement from Scottish Power that it plans to increase gas tariffs by an average 19% and, presumably as a knock-on effect, electricity by 10% on 1 August.
The rise can, no doubt, be ascribed to factors such as a consistently high oil price and unrest in the Middle East. The recent UK Government tax hikes clearly also will have had an impact.
Scottish Power clearly now has an issue, looking at the reaction to this price hike.
That said, in today’s deregulated market there’s no attributable value to the brand. Such commodities are not luxury brands and cannot be sold in fancy packaging, or given a personality that turns it into a desirable product – it’s a ‘must have’ at the very basic of levels. Quite simply, price is the ultimate driver for consumers these days, particularly when it’s so easy to switch supplier.
Right now one of the only comforts for Scottish Power will surely be that the remaining major suppliers are likely to follow suit in the coming weeks and months.
Some may think Scottish Power must now ride out the storm and take the flack then carry on with business as usual but there’s a real danger people will simply switch to other suppliers now, regardless of the likelihood of comparable rises.
At Fifth Ring, we believe that there are some things that could have been done before this announcement and should be done now to get back on the road to rebuilding consumer relationships and instilling that all important confidence and trust.
1.Manage the news cycle – Engaging with consumers both on and offline might actually go some way to countering negativity and setting the context for the price hike. A rise has been on the cards for some time now, could Scottish Power have done more to encourage consumers to fix prices in the months preceding today’s announcement? Should the company have been first to announce a rise? These are all valid questions. Messages going forward need to reinforce what Scottish Power has done to absorb costs and manage expectations about future price rises from all energy companies.
2. Deliver the best deal - What’s interesting is that in the same press release delivering the bombshell, is an announcement that Scottish Power has also launched a new website tariff, that claims to be the cheapest online product currently available. There are deals on the website, but I would argue this online offer, along with those that reward low energy use and loyalty, should have been launched earlier. The company should now reach out to consumers using direct marketing or social media tactics to help people find the right tariff.
3. Helping customers save energy - There are some great tips on Scottish Power’s website for saving energy. More should be done to pass this information on to consumers using a series of tactics that drives people to the website, or offers the advice in a variety of formats to suit as broad a cross section of people as possible.
4. Social media – from journalists and bloggers to angry customers, there’s plenty going on in the social media space. Choosing not to engage using these channels means that the wave of bad feeling will only amass to something bigger. Be courageous and engage. Help consumers to understand by disseminating clear, factual information and encourage people to discuss their issues, worries and concerns. As the website is central to all communications tactics, use social media to push out key information and direct consumers to key areas on the site.
5. Blame someone else – OK, I’m perhaps being a bit flippant here but these rises didn’t take place in a vacuum, so whether it’s unrest in the Middle East, the oil companies or indeed the Government, there’s always some finger pointing to be done to make energy companies like Scottish Power look better.