Building consumer trust in the energy market.
BLOG: Consumer trust in the energy sector is at an all time low.
For too long, consumers have felt powerless when it comes to their energy usage. Unsurprisingly, but alarmingly, consumer trust in Australia’s energy sector is falling; in fact, trust has dropped from 50% in 2017, to just 39% in 2018. Further, according to Energy Consumers Australia, only 1 in 4 consumers believe energy retailers are working in their long-term interests.
A complex market
How do we resolve this? Addressing the trust deficit is difficult for several reasons:
- The energy market is complex and opaque, consumers don’t know – and don’t necessarily need to know – all the backroom goings on of the wholesale and distribution markets. But this means they have little context to draw from to explain the aspects of energy that affect their daily lives, including prices.
- Energy companies operate in a highly politicised environment – where debates about technologies, climate change and consumer interests on an essential services collide. Energy companies are a lightening rod for the climate wars, drawing entrenched views from both sides.
- Energy is a homogenous product, and the effort required of the consumer to compare differences and prices is high. This leads to difficulties in consumer engagement, and we know that consumers spend, on average, 8 minutes per year thinking about energy.
But this isn’t the fault of the consumer, and with the energy jargon, soaring bills and incoherent arguments on whether coal or renewables are best, consumer anxiety about energy is rising. Engagement is clearly a challenge. Therefore, people need to be given information that interests them, to entice greater engagement. To achieve this, there are key considerations:
- Consumer expectations have changed, and energy companies have been a little slow to keep up. Consumers expect services to be easy, adaptable to their needs, digital, fast. But for a long time, energy has felt like something done to the consumer, rather than something done for them.
- In marketing of energy, the focus has remained on price. This represents a functional need of the consumer’s being met, but their emotional and personal needs are being neglected. The emotional need that can be tapped into, to drive deeper consumer engagement, is the need to claim back control.
We recently implemented this with the Take Charge campaign, for the Department of Environment, Land, Water and Planning’s Victorian Energy Compare tool. The campaign aligned with the consumer desire to take back control, to take charge.
The case for shared value
As consumers demand more, a business driven by profits alone is no longer enough. As a narrative, profit-driven business is what is partly to blame for the drop in trust in the energy sector (and also other sectors such as banking). Consumers feel fatigued by their minimal engagement with the energy sector.
In contrast, an organisation focused on meeting consumer needs, both functional and emotional – can begin to pivot, to putting purpose at its core, benefiting both the business and the society it serves. Increasingly, society is demanding that companies serve a social purpose and create social impact, and research shows us that 84% of people believe that an organisation that has purpose at its core will be more successful in transformational efforts.
By putting intrinsic and emotional values at the core of energy, consumers can begin to feel like they’re back in the driver’s seat.
Want to know more about the nexus between energy and shared value? Talk to us.
This blog was initially presented at the All Energy Conference in October 2018, by Ellis Jones Director of Communications, Melinda Scaringi.