Energy branding: ‘people don’t change’
“The way the energy markets are changing is based on technology and different product offerings. Products change and technology changes, but people don’t change. That’s why you need to connect with them and you do that in the most efficient way; through branding.” Friðrik Larsen, CEO of LarsEn Energy Branding, addressed Energy Ireland 2017 to outline the importance of branding.
As the first person to deliver a PhD thesis on energy branding (Positive power: the untapped potential of branding the electricity sector), Larsen opens his presentation by explaining that branding is based on a philosophy of understanding customers and tailor making products.
“Energy branding is really a simple thing,” he explains. “You make a brand and tell people what it is and thereby develop an identity. However, the identity and the image of energy companies are often very skewed. Our identity is how we think about ourselves, while image is what others think about us and often there is not enough overlap.”
Likewise, branding is not merely a logo. While a logo identifies a brand, it is only one component and there are additional dimensions. Overall and comparatively, Larsen suggests that the energy sector is not competent when it comes to branding. “If you think about the big companies of the world, they are good brands above everything. Energy businesses have few big brands.
“There are a lot of challenges. In branding, you must be different; that’s the foundation. You must dare to be different.”
The greatest challenge facing energy companies, Larsen contends, is a general apathy among consumers. “There are some statistics that suggest that the average energy consumer thinks about their energy provider for 20 minutes per year. You can’t do much in this time. So, the biggest challenge is to make them care and get them to listen to your message,” he states.
However, in an evolving market, there are opportunities in adversity. “Utilities will stay in business if they know how to brand themselves. There is talk of distribution systems and all that stuff, because people can make their own power and store it themselves. But at the end of the day, people will still need energy. ‘Someone’ will have to sell them energy and if the energy companies don’t adapt to modern-day thinking, someone else will do that for them. The customer just wants light and heat. If someone can provide it for them and in a sexy way they will take that option.”
Competition, Larsen maintains, will emerge from somewhere else and will play on the fact that people “generally don’t like utilities”. “It will not come from your next door, friendly utility. It will come from someone you do not know. The Americans talk about ‘energy space’. The ‘energy space invaders’ are few, but they are already there and they are competing. These guys know the mind of the consumer, they know how to connect with them, how to talk to them and they try to understand what is coming next.”
As such, while new competitors are few, it is essential to understand how they behave, how to compete with them and how to anticipate their moves.“I have developed a tool which is a survey enabling you to stand relative to the world’s best. Image and identity are not often well aligned, so this provides an average score. When using this tool, this gives companies a bench mark of where they need to be, identifying weaknesses as well as strengths in order to help them evolve. Energy branding is the missing element for success. That’s my honest view based on my research,” Larsen concludes.
