BrandingWhy is branding important for utilities?Branding is a relatively new conceptfor many utilities. In a largely monopoly industry, branding and the customer have not always been on the top of executives minds. This post will address what is a brand, why it is important, and wrapswith an example of a weak brand.1. What is a brand?An often cited definition comes from Marty Neumeier.A brand is the persons gut feeling about a service, product, or company.The marketing spot definition of a brand isthe emotional and psychological relationship you have with your customers.My spin on the brand is the accumulation of persons experiences with the organization. This includes all interactions including service reliability, the bill, calling the contact center, visiting the website, the direct mail, the TV and Radio commercials, billboards, news stories, word of mouth, and any other customer interaction. Simply put, consistently delivering positive experiences helpscreate positive feelings, builds trust, and ultimately builds the brand.2. Why is the brand important for utilities?Why would a monopoly want to create a strong brand?First, utilities must now influence energy usage. When utilities only supplied electricity, they only attempted to influence consumers when it came to paying the bill. Utilities simply met higher electricity demand with more generation capacity or long term contracts. In both cases, the approval centered on regulators and not consumers. This calculus is changing. Incrementing generation with carbon based fuels is already difficult and will become increasingly difficult with carbon and particulate concerns. Moreover, renewable energy is not ready to fill the demand void and nuclear has its own challenges. As a result, utilities must now focus on shifting and reducing demand, and unlike electricity supply, demand side programs are usually the consumers choice.Under this new paradigm, if there is no trust, there is little chance consumers will listen,believe, or be influenced bywhat is being said. Think about the people who influence you. My guess is there a high degree of trust and an emotional connection. This also holds for organizations.Second, is the emergence of the smart grid. This new digital channel provides non utilities with a method for communicating with utility customers. Microsoft, Google, and Opower have portals that provide utility customers with tips and recommendations. One can reasonably expect the content to increase both in breadth and depth as more people use these portals. If these portals and brands can deliver more information value than utilities, they could become increasingly influential and ultimately steal customer mindshare. Even more concerning, they could potentially move into utility business. For example, utilitiescould end uppaying these portals for everyload managementor TOU sign-up. To counter this, the utility must have a trusted, strong brand and the ability to determine and deliver valuable information.Third, the internet is connecting people as never before. In 2006, Time Magazines person of the year was You.1 A quote from the article sums it up. It's a story about community and collaboration on a scale never seen before. It's about the cosmic compendium of knowledge Wikipedia and the million-channel people's network YouTube and the online metropolis MySpace. It's about the many wresting power from the few and helping one another for nothing and how that will not only change the world, but also change the way the world changes.1This network effect empowers consumers and provides them with the tools to circle the wagons when they feel organizations are not acting on their behalf. This relates to the brand because trusted utilities will be more influential andwill be less susceptible to the rumors, misperceptions, and downright lies. 3. How much does a poor brand cost?Several utilities across California are implementing smart meters. PG&E hasspent millions of dollars to retest meters, attend CPUC hearings, create additional communications, meet with reporters, testify in front of legislators, and many other things I amsure. They even have some customerswho believe that smart meters aredelivering harmful levels of EMF. In contrast, there are alsoutilities in California that have implemented smart meters with little hoopla. Why is there a difference? Are some utilities communicating more effectively? Does the quality of the meters differ across utilities?I would argue that the primary reason PG&E is having so much difficulty is not what they have done since installing smart meters, but what they done over the last 20 years. Heavy handed tactics and poor customer experiences have turned into mistrust and anger. The chickens are simply coming home to roost and PG&E is paying for years of negligence.