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British Gas turns on the Buzz

Posted in General, Marketing February 20th, 2007 by Branwell Johnson

In our latest analysis in conjunction with YouGov’s BrandIndex we assess the impact of the latest price cuts from British Gas.

British Gas has just signalled the start of a new energy price war for the hearts and minds of customers with an announcement of domestic price cuts from 12 March. As a result it has seen one of the most dramatic turnarounds ever in a brand “Buzz”, as measured by YouGov’s BrandIndex.

Until its price cut revelation, British Gas had been the whipping boy of the energy industry, accused of being the driving force behind rising energy prices and consequently haemorrhaging customers.

It may have attributed rises to wholesale prices but the consumer doesn’t care about the origin of a price rise - it’s what’s in the bill that matters. Last September energy comparison website Uswitch said that British Gas was losing customers at the rate of one every 34 seconds.

However, British Gas seems to have sharply turned the corner and its new Buzz figures, a measure of whether people have heard positive or negative things about the brand, show a massive bounce.

The company’s figures were looking more like a below zero thermometer at the Arctic last year – hitting an incredible -61 on 2 August. However, following its announcement on 8 February, the company has seen an amazing rebound. The day of the announcement the Buzz was at -12 and within two days it had moved to 18. The rating was at 12 last Friday (16 February) and is likely to see the benefit of customer goodwill.

The company has had a new hand at the tiller since last September when Phil Bentley, group finance director and MD of parent company Centrica, became MD. Centrica is due to release annual results on Thursday (22 February), sadly the period does not include the new developments.

British Gas should also be seeing the benefit of its multimedia campaign developed by Clemmow Hornby Inge. There has already been print and radio advertising promoting the price cut and television activity will follow next month.

Other ratings such as “Quality” and “Recommend” have still to benefit from the company’s news. Quality was still at -26 last Friday although Recommend had begun to recover from – 31 in July to -17 by Friday.

Maybe the only grey cloud on the horizon for British Gas is that it has let rival Npower snaffle its old 80s icon Sid. Npower, which has just announced its own price cuts, has cannily brought Sid out of retirement to front its own campaign. Time will quickly tell if there is public recognition for this old brand icon and if it translates to customer sign up.