The E.ON work is interesting, because it does the rare and unusual thing of encouraging people to use less of its product. In comparison to all other company-funded advertising, ‘The message is the reverse of the medium’ if you will.
As Brand and Communications Director Jeremy Davies (ex-JWT on ntl:) puts it:
“We genuinely want to engage with people about the energy issues that matter to them. We wanted to give consumers a clear, simple and honest answer: helping people use less energy, means they will have lower bills and lower bills mean happier customers who want to stay with us for longer.”
So, as you’d expect, it’s still about the £, but it’s about measuring the Lifetime Value of customers, with the understanding that you’ll take a hit on the ‘Average Revenue Per Customer’ per year, but you’ll keep them for more years.
The interesting thing about this is that it counters the entire concept of advertising and marketing. This seems to be the logic for everyone else:
Every company promotes higher consumption.
They need to sell more to grow.
Because every company promotes higher consumption, overall, the market will grow.
With enough markets growing, the economy grows.
E.ON is different because it promotes lower consumption.
As a result of this and customers saving money, it will steal share from the competition.
If they are successful, then the total revenue from their growing customer base will be greater than the total loss of revenue from encouraging all customers to use less. So the company will grow.
But what happens if they’re extremely successful? What if this approach ensured that they achieved a market dominant position? At some point, they would be responsible for a decline in the total market size. This is because the majority of the population (i.e. E.ON customers) would use less energy year on year.
What would happen then?
Would the government try and break them up for being anti-competitive (or because they weren’t making enough from taxes from the category)
With fewer potential customers coming in, E.ON would see it’s own growth slow and actually start to decline as their consumers continued to use less and less.
If that happened, and they stuck to their guns, E.ON would have to expand into other businesses in order to maintain their own growth. In the same way that Virgin enters new categories with its customer service/consumer champion philosophy, then E.ON could E.ON-ize categories with its ‘Use us and use less’ philosophy. So, they could reduce obesity by encouraging people to eat less. Or reduce petrol consumption by producing extremely fuel-efficient vehicles.
Or maybe other brands could learn from and replicate the E.ON strategy for themselves, before E.ON get there and beat them to it.
Here’s the copy in full: