The likelihood that your company won't be touched by today's frenetic business climate is probably close to nil. But a strong communications plan based on managing brand reputation can be an insurance policy in the fray of mergers and acquisitions, consolidations, divestitures, alliances and global partnerships.
In this article, we examine how gas and electric utility giants are effectively using PR to help them grow their brands. In the information din surrounding deregulation overseas and in the United States, PR is evolving as one of the principal ways electric utility providers are protecting their brands from a blackout.
Electric companies are now using everything from bill inserts to building new services to educate consumers about competition.
A report released last week by Coopers & Lybrand, London, highlights the promise of corporate communications as a way of managing energy brands for tomorrow's market. Survival means going beyond Wall Street to explain to customers how your company is handling deregulation and what it's doing to keep rates low.
Brand management is a tactic that may have less to do with how the financial community perceives revenue, and more with longevity. It's nearly impossible to guarantee blockbuster profits that elate shareholders every year, but it's not impossible to guarantee that your company's reputation is something you consistently benchmark and track, which is what the C&L report underscores.
The study, which has yet to be released in full, indicates that a majority of company directors believe the $14.7 billion British electric industry will lose up to half of its 14 public utility supply companies as deregulation takes hold. And it concludes that "innovative marketing and a powerful identity will be the major influences on consumer choice."
In the U.S., Coopers & Lybrand has not released a similar report, but U.S.-based companies find themselves in just as much turbulence. To stay competitive, electric companies are undergoing mergers, acquisitions and consolidations as well as beginning new ventures in telecommunications. PR and marketing are surfacing as the darlings in all of these initiatives.
Companies are learning that the key to surviving deregulation is balancing the good with the bad.
For instance, Washington, D.C.-based Potomac Electric Power Co. announced several weeks ago its joint venture between its subsidiary Starpower and phone company RCN Corp., Princeton, N.J., to offer area residents long-distance phone services and Internet connections.
But PR NEWS learned last week that ventures such as the Starpower/RCN deal are taking place while Pepco negotiates hefty buy-out packages for some 100 employees who work at its six power plants where future growth isn't targeted.
What's All This Brand Buzz?
Earlier this year, Fortune ran a multi-page report that analyzed the American Customer Satisfaction Index, a four-year-old endeavor by the University of Michigan, that companies pay thousands for access to the results of annual customer-satisfaction surveys. This year's list included close to 30 companies in the electric/utility/energy sector or telecommunications.
In the 1998 study, for example, Duke Energy ranked 62 out of 190 and received a 79 on a 100-point scale. Duke Energy, Charlotte, N.C., is the product of a year-old merger between Duke Power and PanEnergy and one of many recent marriages between natural gas and electricity providers.
The Public Service Commission of South Carolina unanimously approved the merger March 19, 1997, and the North Carolina Utilities Commission on April 22. Overall, the company has laid off 300 workers out of a workforce of 22,000 because of the merger, according to Roberta Bowman, VP of public affairs.
But despite the merger, there hasn't been an extreme departure from the company's core business philosophy. The business strategy Duke is relying on to create customer satisfaction goes back to 1989 when the company began conceiving business goals based on treating customers as if they had a supplier choice then. Slowly, it has continued to align those business objectives with brand management and customer relations. New efforts include a 24-hour call center and Saturday hook-ups.
"Deregulation has created a massive education issue," Bowman reminds. She knows that M&As, in this case a by-product of deregulation, can be one of the most tenuous kinds of communications PR executives handle. Audiences tend to scrutinize these events because of their ability to topple, or grow, companies.
Making the Call on Brand Mgt.
Telecommunications is offering those in the electric/utility and gas industries some pretty significant examples of lessons in brand management. Ever since the Bell system was broken up in 1984, Bell Atlantic has been rolling out PR based on educating stakeholders about regulatory reform, says Mark Marchand, director of media relations. He is one of more than 100 in-house communicators helping close the information loop on how Bell plans to stay competitive.
"We decided to embrace it and to work with regulators," says Marchand. "With us, we know there's a carrot at the end of the stick, which for us is gaining access to the long-distance business."
Bell in New York has completed the necessary steps in getting the preliminary go-ahead to compete in the long-distance sector. In the Fall, it will seek formal permission from the FCC and could begin providing service within 90 days if the plan is approved.
But Marchand links speculation that the FCC will provide the okay to PR that was based on sharing with external stakeholders what it's done to "open the market" and how it's dealing with competition.
To communicate its position, Bell publishes every month or bi-monthly (depending on what issues are brewing) a Competition Update newsletter. A recent issue highlighed Bell Atlantic President and COO Ivan Seidenberg urging the FCC to open communications markets.
"You need to decide what missions and values in business you have," agrees Dr. Larry Chiagouris of CBD Research and Consulting, a business venture of Creamer Dickson Basford that has been spitting out research on deregulation.
Chiagouris cautions that when a company is going through a major industry change such as deregulation or major restructuring, long-term brand strategies can't be determined unless an internal audit is completed. (Band & Brown for C&L, 0117/927-2444; Pepco, 202/872-2680;Duke, 704/382-8347; Bell, 518/396-1080; GP, 404/506-2156; CDB, 212/367-6858)
Georgia Power's Idea Bank For Deregulation
Atlanta-based Georgia Power's base rates haven't jumped since 1991 and are 15 percent below the national average, but GP's hinging its future on new ventures as well. They include security and bundling business units - services which are handled out of parent company's The Southern Company Energy Solutions Customer Call Center. The center has handled more than 12,000 calls since it was launched Jan. 29, 1998, according to Tyndall Chapman, customer service supervisor.
"We're using a variety of PR strategies, instead of a political mindset," says Jackson Hauck, advertising manager for GP, which has 8,000 customers.