2010: British Gas, Brand Revitalisation: Case Study

Snapshot

The UK’s leading energy supplier turbo-charged its brand performance by going back to customer basics and rising above price-led promotions.

Key insights

• British Gas was determined to revitalise its brand by putting the customer at the heart of its strategy.
• It did this by uncovering valuable customer insights about the relation of people to their homes.
• This formed the basis of a dramatic overhaul of its marketing approach which led to a number of key customer-centric initiatives which, in turn, transformed brand perception and performance.

Summary

British Gas, part of the Centrica Group, provides gas, electricity and home repair services to millions of customers in Scotland, Wales and England. In 1986 the company received the accolade of the ‘Brand of Britain’ by The Marketing Society. In the years that followed, however, its reputation fell. The erosion of key brand health measures was accompanied by a declining customer base. There was widespread acknowledgement that the company had had its eyes fixed more on the competition that its customers.

In 2008 British Gas set out on a ‘journey back to great’, beginning with a wholesale re-evaluation of its approach to marketing and putting the customer at the heart of this brand revitalisation. A new organising thought was developed based on the insight: ‘Your home is your world. Count on British Gas to look after it’. A number of initiatives, including becoming the principal partner of British swimming and environmental programmes, were developed as part of this revitalisation.

Not only did this lead to the proportion of customers claiming British Gas as their first choice of energy supplier rising to an all-time high, but 2009 saw the first substantial growth in customer numbers in seven years.

Losing sight of the customers

British Gas has been powering Britain for almost 200 years, evolving from the ‘Gas, Light and Coke Company’ in 1812 to become the leading provider of energy and home services in Britain today. 1986 was a defining year in the company’s history, when The Gas Act returned the gas industry to the private sector and British Gas plc was formed.

The iconic ‘Tell Sid’ campaign, with its strapline: ‘lf you see Sid, tell him’, aimed to persuade the British public to invest in its shares. British Gas was one of the highest spenders on advertising that year and the campaign one of the most successful of all time. The initial public offering (IPO) of 135p per share valued British Gas at £9 billion. The offer was four times oversubscribed and The Marketing Society recognised British Gas as the ‘Brand of Britain’ in 1986.

In the years following privatisation the energy market was characterised by massive upheaval. When the period of monopoly ended in 1998, consumers were free to choose their gas supplier. Fierce competition followed and new entrants, hungry for their share of the market, were engaged in a race to the bottom.

With its customer base being continually eroded, British Gas played its part in the price wars, seeking to retain customers with promises of cheaper deals and balance its losses with increased product holdings. However, by focusing on differentiation through price, energy brands risked dissolving into homogenous substitutes. Furthermore, with each price rise and fall the energy market became ever more confusing and consumer apathy increasingly turned into anger.

With its eyes firmly fixed on the competition, British Gas lost sight of what the consumer really wanted and failed to define what the brand stood for beyond size, heritage and trust — credentials common across all major players.

While its communications were rationally strong, focusing on expertise, reliability and price, British Gas had failed to connect emotionally with its customers. As a result, customer numbers continued to decline (Figure 1). Although by the end of 2007 it was still market leader, British Gas was far from being the ‘Brand of Britain’.

Rethinking every aspect of the brand

In 2008, British Gas set out with the vision of getting ‘back to great’. Measures of ‘greatness’ were defined as:

• Being first choice energy provider.
• Increasing the key drivers of brand choice (‘value’ and ‘being easy to deal with’).
• Arresting the decline in customer numbers.
• Growing market share.

To deliver this, the new marketing team members were united in their belief that British Gas must prove that it stood for more than homogenous energy supply and their conviction that to revitalise the brand the consumer needed to be at its heart. This encompassed a number of key initiatives.

1. Gaining a new view of the customer

Prior to 2008 customer segmentation at British Gas was based on transactional relationships such as energy consumption and product holdings rather than needs.

Placing the consumer at the heart of the British Gas revitalisation required a new segmentation, and one that could facilitate a deeper understanding of customers and prospects. The new segmentation was built by assessing more than 50 consumer behaviours. It was designed so that it could, over time, lead to more targeted investment, efficient and effective new product development and relevant relationship and proposition development.

Critically, the organisation was quick to embrace and activate the segmentation across all areas of the business, supported by engaging internal communications.To ensure the segmentation remained a living tool, an ongoing customer panel was set up reflecting the eight identified segments. This gave consumers a genuine voice at the very top of the organisation, covering everything from airing frustrations about call centres to helping shape British Gas strategy on future energy supplies.

2. Uncovering new consumer insights
British Gas has played an important part in helping people run their homes and home is where the heart is, especially for the British. Eight out of ten consumers agreed that “it is important to me to be able to own my own home”, This was consistent across all demographic groups, even the youngest.

After all, home is where you eat, you sleep, you raise a family and you entertain friends. In times of uncertainty (and in 2008 the UK was experiencing the most severe recession since World War II) trends show that people spend even more time at home with their families.

Every year, across the country, millions of customers trusted British Gas enough to invite them into their homes, believing that with British Gas their homes were in good hands. In addition to gas and electricity supply, British Gas offered a wide range of home services including plumbing, drainage, appliance and electrical care. This made it well-positioned to understand what customers needed to help them with the smooth running of their homes, and, by extension, their worlds.

Through this understanding of the role British Gas could play, a new central organising thought was developed, rooted around the insight; ‘Your home is your world. Count on British Gas to look after it’. Research endorsed the power of this thought, with 84% of consumers saying they related to it.

3. Developing new propositions

While historically propositions had been developed based on the products British Gas wanted to sell, new propositions were now being developed focusing on the needs of the different customer segments.

• A new ‘Energy Smart’ proposition — promising ‘no more estimated bills’—was developed to meet the needs of the segment of customers who were interested in energy efficiency, placed high value on transparency and were happy transacting online.
• A new ‘Call Ahead’ proposition, promising that ‘British Gas engineers will call ahead to let you know they are on their way’, was developed to appeal to the segment of customers who were juggling busy lives, had little time to deal with energy providers and liked using the phone.
• A ‘Cheapest Electricity in Britain’ proposition was developed to appeal to the segment of customers who sought value, wanted to be rewarded for loyalty and looked for certainty.

While all the propositions had broad appeal across the customer base, the starting point for each stemmed from a rich understanding of how British Gas could most effectively ‘look after the world’ of one particular segment.

4. Forming new partnerships

New partnerships were developed as part of the British Gas journey to becoming great again. These partnerships demonstrated how a revitalised British Gas was actively ‘looking after your world’, not just talking about it.

Going swimming

In March 2009 British Gas announced its British swimming sponsorship. Swimming is part of the fabric of British life: 12 million people and 50% of British Gas customers swim every month. British Gas swimming sponsorship supports the national team, as well as grass-roots projects such as Pools4Schools. One in five British children leaves primary school unable to swim the curriculum standard of 25m, often because they don’t have access to a pool. Pools4Schools responds to the challenge by using temporary, mobile pools to teach children to swim. The initiative has enabled hundreds of thousands of children to learn this key life skill.

Because families are at the heart of the company’s customers, in September 2009 every British Gas customer was given the opportunity to enjoy a free family swim merely by printing off a voucher. The campaign was fronted by Olympic champion Rebecca Adlington. 1,200 pools signed up to the swim and by December 2009 more than 150,000 families had taken part.

Generation Green was a programme established by the company with the aim of creating, rather than inviting, ‘green’ behavioural change. It is a nationwide schools initiative promoting environmental awareness, incentivising green behaviour and bringing together schools, children, their families and friends.

It was designed to require little effort for teachers to set up and run, but which would deliver significant and long-lasting benefits through a combination of green lesson plans and rewards. Supporting it was a sophisticated communications strategy that sought to recruit schools and engage children before the broadcast advertising began. By the end of 2009 Generation Green had engaged 9,972 UK schools and provided over 514,900 hours of green learning, affecting almost four million children.

5. Creating new advertising

The new consumer insight — ‘Your home is your world. Count on British Gas to look after it’ was brought to life by an engaging creative vehicle that placed customers at the heart of the brand. The campaign was launched in March 2009 and featured people’s homes on individual planets being cared for by British Gas. The strapline ‘British Gas. Looking after your world’ articulated the brand essence.

The creative work (Figures 2 through 5) had a more modern and future-facing feel than previous British Gas campaigns, and while familiar images such as the British Gas van still featured, new assets such as animation, voice-over and music signalled revitalisation. The ‘Planet Home’ creative approach enabled a wide range of propositions, including price, to be communicated in a consistent and compelling way.

Steering the brand back on course

Although it was only the start of a long journey, the new marketing vision and strategy, developed with CHI & Partners and Carat, had a dramatic effect in a short time. For example, the proportion of customers claiming British Gas was their ‘first-choice energy provider’ was at an all-time high at 64% by November 2009, while the proportion of competitors’ customers claiming they would never use British Gas declined significantly from March 2009 to the end of November (Figure 6).

The proportion of customers believing British Gas to be more expensive than other energy providers was at a record low and the key brand drivers of ‘value’, and ‘easy to deal with’ all showed significant gains.

The Planet Home campaign exceeded all targets, with cut-through with branding and affinity scores all showing significant gains. In terms of business effect, it was more successful than any previous campaign in driving sales.

Econometric modelling, independently assessed by Billetts, showed that, based on acquisition and retention the campaign returned £3 (net present value) for every £1 invested. Perhaps the clearest evidence of brand revitalisation is that in 2009 British Gas substantially grew customer numbers and expanded market share (Figure 7). This has continued in 2010, with customer numbers growing by 500,000.

Entries for the 2013 Awards for Excellence are now open, now is the time to choose the category you would like to enter.