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Will the forthcoming general election pylon the pressure for utilities marketers?

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Last month I wrote about what’s keeping FMCG marketers awake at night (short answer: quite a few things). But this pales in comparison to what CMOs in the utilities sector have on their plates over the next six months…

First up, is the inevitability of price caps being imposed by – it appears – whoever is in power come 9th June. Corbyn as you might expect, is no fan of the ‘Big Six’ and yesterday morning confirmed in the Labour Party manifesto that nationalisation of the water sector would be his first step towards a publicly owned energy system. However a more likely scenario seems to be a Conservative-driven price cap imposed on gas and electricity tariffs.

The fact that a Conservative leader could pledge to abandon free market principles tells you something about the levels of frustration the Great British Public is directing towards an industry – much like oil & gas – often chastised in the media for a lack of value and transparency.

For marketers, this is a challenging blend of external influences that’s left them battling to communicate a clear set of brand values, regain consumer trust and simultaneously lobby the powers that be to ensure that, long-term, they’re left with a brand to communicate at all…

We’ve identified a number of strategic reviews taking place before the end of the year in the industry – at brands including SSE, United Utilities and RWE Npower – and from Pearlfinders’ conversations with Marketing and Comms Directors at these brands (and many more) a few distinct challenges shine through: -

Energising loyalty

The last decade has been dominated by a GoCompare/Money Saving Expert-driven narrative encouraging consumers to switch, switch and switch again to ensure they’ve got the best deal. And frankly, customers are fatigued by this endless treadmill. SSE are investing in their market research and insights function to understand how technical innovation impacts customer satisfaction, while RWE Npower is most concerned with interacting with customers – particularly families – on issues other than their billing, for example CSR and community initiatives. There will continue to be a consistent stream of work here for sponsorship consultancies, market research shops and content marketers.

For nimble challengers like First Utility, customer acquisition remains the focus – having already gobbled up those more prone to switching, the challenge is to keep the momentum up with those more set in their ways – here, agencies can add most value by demonstrating transferable expertise from outside of the sector.

Tech a chance

The sector is yet to have its “Uber moment”, although I’d suggest this isn’t far off given the progress the likes of Tesla are making and a palpable concern about “new tech” emanating from the Big Six. British Gas spoke to us recently about ongoing efforts to ensure its Hive brand looms large in the consciousness of consumers as we march towards the government deadline for smart meters in every home by 2020, while E.ON has entered a partnership with Danish electric mobility operator Clever to build a European network of ultra-fast charging stations for electric vehicles.

Utilita Services is targeting the other end of the market – lower income households looking for tech- and app-driven pre-pay solutions. Their offering of well-designed, hand-held smart meters is one certainly worth keeping an eye on.

For the established voices in the sector, the challenge concerns operational and digital transformation projects to ensure that service levels can cope with the increased levels of customer activity (think switching tariffs; requesting smart meters; clearly communicating impending pricing changes).

So should agencies be targeting the sector or not?

Whatever the result of next month’s election, and indeed the impact of Brexit on the industry, I’m predicting dramatic shifts in marketing strategy across the sector. Medium-term, there’ll be numerous opportunities to support the big players’ efforts to navigate the changing regulatory landscape, and help them balance profitability with a ramping up of customer-facing comms.

But targeting the sector is not without risk – just this morning SSE warned shareholders on the long-term sustainability of its dividend, and new business outreach must balance positivity and creative thinking with an acknowledgement that this is an industry with some real battles on its hands over the next few years.

Mike Thorne is commercial director at Pearlfinders.

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