How to market a ‘mundane commodity’

Competition in the energy retail market has never been fiercer. But how do brands dealing in the same basic commodity differentiate their offer and excite consumers about a product that is a necessity, not a luxury? Adam John speaks to marketing experts to get their views on how suppliers can stand out from the crowd.

A recently published report titled Brand Love by PR agency, Energy PR, surveyed more than 100 marketers from across the UK and asked for their ideas on what makes a particular brand great… even loved. It revealed some interesting findings.

Most notably that brands (including utilities) may be mistaking apathy for loyalty, with the study finding the average consumer to be incredibly apathetic – willing to tolerate an average of two mistakes from an ordinary brand before being compelled to shop around.

This passivity, Energy PR says, could be enabling “inferior customer service to go unpunished”. Yet once a brand eventually loses passive customers, winning them back is incredibly difficult.

Eon was among the top ten brands singled out by survey respondents, ranking 8th place in a list of brands marketers love the most, achieving the same number of recommendations as Amazon and supermarket giants Tesco and Asda.

But how does one energy supplier differentiate from the other?

It’s all in the experience

The market is saturated with myriad suppliers offering essentially the same commodity, which for most people outside the sector is difficult to get excited about, according to Louise Findlay-Wilson, Energy PR’s managing director.

She explains: “It’s quite hard for people to get passionate about utilities. It’s a kind of necessary evil, we all need to use them and don’t necessarily get wildly excited about them. The challenge they have from the get go is ‘how do I get people to get passionate about something that is essentially a relatively mundane necessity’?”

The answer, she says, lies in the quality of service and the customer experience of dealing with the company, where a lot of the perception of a brand is going to be influenced.

A case study featured in the report referenced disruptor brand Bulb which was singled out by Tracey Daley, marketing manager at Van Walt, as her personal favourite brand. In the study, Daley points to the customer experience she has with Bulb as being behind the reason it is her favourite.

She said: “What I get from Bulb is not only more competitive pricing and a simple, single tariff but greener energy to boot – why wouldn’t I be thrilled? Saving the planet while running my tumble dryer on a sunny day, less guilt and dry clothes!”

Daley also points to the simple switching experience she had with Bulb and the fact the supplier remunerated her account with £10 and apologised after she was left waiting while sorting out her bill. For her the fact the supplier apologised, rather than the money she was credited with, was key.

Multiple shades of green

In November, Glasgow will host the COP26 summit, highlighting the biggest crisis yet faced by humanity – climate change. On the frontline in the battle for achieving the UK’s net zero 2050 target will be energy retailers, offering ever more green energy tariffs.

A recent survey by consultancy EY found Covid-19 had accelerated the willingness of people to choose more sustainable products, with 62 per cent more likely to purchase a product or service that is sustainable.

EY says its research revealed that while these changing attitudes present an opportunity for energy companies, they also bring risks. Almost a third of respondents (32 per cent) said they had stopped using a product or service because it was non-sustainable.

One concern raised in recent years has been that of ‘greenwashing’, where tariffs legally marketed as 100 per cent renewable may be backed by renewable energy guarantees of origin (REGO) certificates, which some have argued do not create demand for new renewable energy.

Rich Morris, business development director at Utility Umbrella, which provides utility services to businesses, including digital marketing, believes the gap between pure green energy retailers and those who ’greenwash’ their tariffs will become a key battleground.

He says: “Moving towards net zero I think the big play will be about the true green suppliers. For me, I think those suppliers out there that are offering pure green tariffs need to push that and make that really obvious to the end customer.”

Central to this, Morris argues, is transparency: “I think the better the transparency in marketing products, the better they will do. There is a market out there for customers who really do want to be green and that will grow over time. Unless you have a background in energy, most people wouldn’t know what greenwashing is. For me that’s quite key.”

Solar PV, electric vehicle (EV) chargers and heat pumps are just some of the low-carbon technologies being offered to consumers by their energy retailers – a sign the push to net zero is ramping up. Core to this is how clearly retailers communicate the benefits of these new offerings, which Findlay-Wilson argues feeds into trust.

She adds: “Clarity of communication is going to be really important, people can easily get very confused. If your customer is confused there’s a real problem then around trust. Clarity of communication for the sector as whole is going to be really important. Then it’s how individual brands carve out what their take is on net zero. What does it mean for their customers and how are they going to head towards that and differentiate themselves?”

Personality – being true to your brand

More suppliers turning to supplying renewable power poses a further marketing issue for retailers; how do they stand out from the crowd?

Findlay-Wilson believes one way of getting round this issue is a consistent approach to a brand’s personality. She cites Octopus Energy’s ‘fun’ brand persona as a way it differentiates itself from the rest, something not all brands can achieve.

“Octopus do some things very neatly, they have quite a clear personality that’s slightly more fun,” she says.

“When it comes to the whole green energy agenda and moving that way, I think that companies that currently sell on that are obviously going to be up against everyone else moving in the same direction. Differentiating and standing out is going to be important, that’s where these other values are going to come in. I think therefore having a very clear personality and being true to it is just so important,” she adds.

However, she warns, consistency is another key factor and brands should not put on a more ‘fun’ persona because it suits them on any particular given day. Yet there is value in being a larger brand with a lot of heritage, as customers will have different expectations of a former big six player than a newer entrant.

“I don’t think Eon can suddenly decide it’s going to be playful and jaunty. Octopus could do it because they were a new market entrant at the time, they have taken quite an entrepreneurial approach, wanting to be different and carve out a niche. I think it’s harder for the bigger players, they can’t suddenly be all fun and zany because that’s not really what they are about and it’s just not going to be genuine.”

Findlay-Wilson recognises that an older, larger brand, such as 200-year-old British Gas, comes with a lot of heritage which it cannot turn its back on, adding that its customers might not necessarily be looking for a quirky and ‘fun’ retailer.

Sharing similar thoughts is Charmaine Coutinho, head of consultancy at Delta-EE, who also sees value in being a brand with a lot of heritage.

She believes more nimble disruptor brands will have an advantage in that their marketing strategies can be made easier and cheaper with the use of websites and apps rather than television and newspaper adverts.

However, she adds: “The older brands have a lot of good will in the fact that everyone knows who they are. If you think about people who are older than 60 or 70, this is not a generalisation, but they are familiar with brands and haven’t really considered them in the post-liberalised world – it’s still the electricity board.

“I think there is still a lot of brand value in that which is quite hard to translate and bring up to date but still it’s a decent size of the population, how that looks in 10 years’ time might be a bit different.”