British Gas seeks public trust

The utilities company is spending £50m to convince people it cares about them. Mark Kleinman reports.

British Gas wants to be trusted. Five years after the UK energy market was opened to full competition, the former nationalised utility is embarking on an expedition to capture the hearts of the British public.

It is a journey that may be fraught with danger. For the first time, British Gas is aligning its entire business behind a single proposition: that it can be relied on by its 20 million-plus customers to act in their best interests.

A £50m long-term advertising assault - created by Clemmow Hornby Inge and fronted by Royle Family actor Ricky Tomlinson with the slogan 'Doing the Right Thing' - will hit TV and cinema screens, radios, high-impact poster sites, newspapers and doormats across the country from today (Thursday).

It is a less explicitly commercial positioning than anything seen before from the Centrica-owned business, which recently advertised its products under the strapline 'There's no place like a British Gas home'. But British Gas has to tread carefully as it promotes itself so robustly as the consumer's champion. It is only a year since the firm acknowledged its role in rehabilitating the industry's image after a flood of energy mis-selling cases that saw a number of its rivals fined by the regulator Ofgem.

Concern intensified this year on the issue of customer-switching, which saw leading industry players, including Powergen, Npower, Scottish Power and British Gas, accused of hindering consumers from moving to alternative suppliers.

As the dominant player, with an estimated 63% share of the residential gas market and 24% of home electricity customers, British Gas is often first in the firing line.

Despite the battering the industry has taken, British Gas director of marketing and strategy Nick Smith, the architect of 'Doing the Right Thing', insists there is no discord between the sector's problems and the company's new message.

"This is absolutely the right message for us as we continue to move away from being a pure utility company to a broad provider of home services," says Smith. It is a diversification hailed by Centrica earlier this year as already making a "material contribution" to British Gas profits, which stood at £169m for the half-year to June 30.

"I don't think this is really that different to what we have done before," says Smith. "We almost always do the right thing by our customers. Of course, there are times when we get it wrong, but the important thing is that we take immediate corrective action."

Improving experience

The statistics seem to bear out Smith's argument. Account and billing complaints about British Gas fell from 0.077 per thousand customers in 2002 to 0.066 per thousand this year, ranking it third-best in the industry.

And the company has been undertaking a programme to improve customer experience.

About £400m has been invested in back-end infrastructure, including customer contact and call-handling technology, while 5000 additional engineers are being recruited over a five-year period.

The company wants to speed up response times and react more appropriately to the most needy customers, such as elderly homeowners whose central heating breaks down in winter. British Gas has already made a considerable contribution to serving such people through its 'Here to Help' cause related marketing programme.

Smith believes this long-term investment vindicates the new campaign and provides the impetus for building customer value. Having earned customers' loyalty by proving that it is 'doing the right thing', the idea is that people will buy an increasing array of home services from the British Gas portfolio.

That is the theory, and it is not unprecedented. British Gas sister company the Automobile Association, for example, has been inviting consumers to 'Just AAsk' for help with their motoring needs for some time. Tesco's promise that 'Every Little Helps', has been successfully applied to financial services, is now adorning telephony packages and will soon be extended to the car market. In short, most service brands claim to act in the best interests of their customers.

Smith believes 'Doing the Right Thing' will also play a key role in motivating staff. The campaign, showing Tomlinson in the role of a British Gas academy trainer, is supported by an internal brand video, which traces the history of the company and its commitment to serving customers. For a company employing 27,000 people, many of whom are in customer-facing roles, the importance of keeping staff on-message is obvious.

Nick Hurrell, joint chief executive of M&C Saatchi, which handles the AA business and pitched unsuccessfully for the British Gas assignment earlier in the year, believes Smith is on the right path.

"Making a firm commitment to service is the only way firms improve delivery," says Hurrell. "The more explicit the promise, the more likely it is to be fulfilled. There is no alternative for businesses like this."

This premise underlies the strategies of other businesses making public commitments to customers. Perhaps the most prominent current example is that of abbey, the rebranded Abbey National bank, which boldly promises to "turn banking on its head".

But opinion is split about which of them is approaching consumer champion positioning in the right way. One brand consultant points out that many of abbey's branches, which the bank has pledged to overhaul, will retain the old name, look and feel for months, undermining the timing of the new campaign.

Strong position

Mish Tullar, head of communications at British Gas, draws another distinction between the two companies. "Abbey is having to do this because it operates in an industry that has been failing. We are different because we are launching this campaign from a position of strength," he says.

Not everyone shares this view. Some believe, for example, that British Gas will face public ridicule when - as is inevitable - a tabloid newspaper exposes a poor example of customer care. John Williamson, a board director at Wolff Olins - the consultancy behind the abbey rebranding - believes British Gas has got its focus wrong.

"This is not a company that should be positioning itself as some kind of citizens' advice bureau. It is an example of a brand that is struggling to find anything interesting to say about itself," he says.

Smith maintains the quest for consumers' trust is essential if the company is to reduce churn and boost its share of the various markets in which it now has a presence. In telephony, for example, the firm believes it can increase its 1.1 million-strong customer base (the figure includes customers of OneTel, also owned by Centrica) by cross-selling to its energy customers.

And 'Doing the Right Thing' will have to be credible if potentially sensitive products such as equity release are to get the green light. British Gas wants to get it right first.

If this brand campaign succeeds, it won't only be customers praising British Gas - with ambitious growth targets in place, Centrica investors will be watching the results carefully.

BRITISH GAS CUSTOMERS AND SHARE

First half First half

2003 2002

Residential gas customers 12.761 mil 13.025 mil

Market share 63% 65%

Residential electricity 6.042 mil 5.592 mil

Market share 24% 22%

Telephony customers 378,000 371,000

Market share n/a n/a

Source: British Gas

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