British Gas looks to increase 'transparency' with print ads

British Gas: latest campaign aims to reassure consumers over its pricing policy
British Gas: latest campaign aims to reassure consumers over its pricing policy

British Gas is hoping to calm the "anger" of its customers by convincing them there is not a policy of predatory pricing within the energy industry.

The four-week national press campaign will address five common questions customers are demanding answers to, including: "Are the big six energy companies fixing prices?" and "Why do prices always go up but never come down?"

The campaign launches today (24 November) and coincides with British Gas managing director Phil Bentley's announcement that the company would simplify its tariffs to increase transparency. 

The changes come after regulator Ofgem last month called for a reform of the industry, to provide greater transparency so that consumers could compare prices at a glance.

Will Orr, British Gas marketing director, told Marketing the changes were a "recognition that customers are angry about the fact they have got less money, but at the same time, their energy bills are up."

Orr admitted that in the past, focus groups had shown customers were confused by pricing structures, but what was previously an inconvenience, was now providing strains on budgets.

He explained: "What's changed now is people acutely feel it as an issue in an environment of rising prices.

Press advertising by CHI & Advertising is designed to reassure customers by informing them there has never been any evidence of price-fixing, despite a number of investigations by Ofgem.

In addition, the campaign will explain it is making tariffs easier by reducing the pricing structure to two different tariff types, "fixed" and "variable".

Orr said British Gas had been preparing for the campaign for the last few weeks to "respond to what has been called predatory pricing".

The confusion created by online tariffs is also being addressed.

Orr said: "There was probably too big a discount online – small energy companies are saying this does not encourage competition because these are loss-leading tariffs."

By clearing up the confusion with the campaign, featuring the "It’s time for an honest conversation" strapline, the energy giant is hoping to prove it and the industry is not "predatory".

Orr said: "Our profit is around 5%, which is lower than mobile phone companies. There are a number of factors beyond our control – we don't control wholesale costs and buy energy in a globally competitive market."

The energy firms claim wholesale prices are rocketing as a result of North Sea reserves dwindling, events including the Arab Spring, and growing demand for energy in China and India.

Follow Matthew Chapman on Twitter @mattchapmanuk

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