Meg Matt, contributing editor
In 1999 I co-wrote a report for E Source on the need for utility companies to invest in a brand strategy in the face of competition. Five years later the industry has yet to deregulate with any great consequence, but does this relegate branding to only those few who are competing for customers? I decided to check in with two other co-authors of that report: Michael Rucker, of The Second Opinion, and Bill LeBlanc, of Boulder Energy Group. In addition I spoke with Kim Pederson, manager of market planning for Otter Tail Power Company, whose company was featured in the E Source report. The interview below offers some current thinking on building a brand in the utility industry.
Meg Matt: With competition nearly at a standstill, should utilities still brand?
Bill LeBlanc: I’ve found in talking with utilities and consultants that the interest in branding has dropped precipitously. Utility executives aren’t as concerned about competition, but those who have built a strong brand by establishing a culture of customer satisfaction are finding that customers are more forgiving when outages or other problems occur.
Michael Rucker: In a non-utility retail market, there are brand attributes companies strive to own. They can compete on price, quality, etc. With competition occurring at a snail’s pace, a good corporate reputation is critical to gain what you need in the regulatory market and with investors. It used to be that this was a solid industry that provided a consistent return to shareholders. Now, because of the actions of a few players, investors are more wary.
MM: I think you’re talking about Enron now.
BL: There were only a few players that caused deregulation to sputter and come to a virtual halt. Enron could still be Enron today, but they got greedy. Were any of the initial market players doing branding the right way? It’s hard to say. The debacle of Enron and the confusion caused by the way California deregulated, has definitely hurt the industry. However, that doesn’t mean that utilities should throw in the towel on branding.
Kim Pederson: Otter Tail Power Company has conducted brand research since 1996 because we feel it’s important to monitor how our customers feel about their utility. We asked our customers about Enron and if it changed their attitude toward us. We found out that there has been a slight dip. Nothing significant, but it’s a trend we will watch.
MM: How should utilities go about building a brand?
KP: It’s funny when I read or hear about how some utilities invest in branding and then abruptly stop. To me that’s an indicator that they really don’t understand that you have a brand whether you want one or not. Your brand is what your customers think of you. Otter Tail Power Company’s brand promise is that we provide high quality service that enhances the life of people in rural communities.
MR: Building a brand is all about defining who you are and what you stand for and then over-deliver it day in and day out.
BL: It’s a process that starts with research to find out what your customers care about and then compare that with what your employees care about. Finally, compare that data to what the executive team cares about. If you’re all on the same page, great. If not, you’ve got a problem.
MM: I definitely feel that the brand, like a company’s culture, lives and dies with executive man-agement. If they don’t embrace it, communicate it and live it, it will die on the vine.
KP: That’s true. We believe your brand is a key indicator of how you do business. Your business culture has to be communicated and lived every day. How do your employees see you and what do your customers believe about you? If you say to a customer you’re going to do it, do it. Trust is the foundation of solid brand. Our executives embody this in many ways and so do our employees.
I believe companies should spend time and effort integrating their brands into their cultures rather than running flashy branding campaigns. Companies should ask themselves questions such as Do your employees think it’s OK to pad an expense report? The business judgment you exercise each day is based on your value system. It’s really that simple.
Meg Matt is founder and principal of The Matt Group, an integrated marketing communications firm specializing in the energy industry. She has more than 25 years of internal and external communications experience, including brand strategy, competitive assessments and marketing. Ms. Matt began her energy career at Arizona Public Service, where she provided communications planning and support to virtually every stakeholder group of the investor-owned utility. She can be reached at 480-704-0897 or at firstname.lastname@example.org.