The management proverb “Tough times call for tough measures” usually translates into an efficiency drive. That’s particularly true for industries dominated by price competition, such as commodities. And Hong Kong’s Towngas has had its fair share of price pressures, from deregulation starting in 1995 to competitors’ drastic fall in oil prices in 2015.
But there is another way to add value to the bottom line than cutting costs, and that is by investing in building a strong brand. For Towngas’ residential business this was a journey that began from the outside in – with consumer insight – and continues from the inside out via their people who enhance the consumer experience.
That might sound easier for a high-end consumer product manufacturer or an experience-oriented company like Disney, than a commodity company, but that’s why Hong Kong’s Towngas is such an interesting example.
Towngas is one of Hong Kong’s largest energy suppliers. It started life in 1862 as the Hong Kong and China Gas Company and was the territory’s first public utility. And, of course, Towngas knows the importance of keeping costs low. For example, its first digital foray was a mobile app that let people read their own meter, thereby saving on costly home visits by meter readers.
Yet top-level management realised that cutting costs and even good service would only get them so far. Simply being cheap and smoothly delivering the basics wasn’t going to be the best protection for the future. So what could they do?
A transformational step Towngas took was to try to understand its true purpose. And to discover this it turned to their core customers, those residential customers who consumed the most gas. Why are they such good customers, and why are they choosing gas rather than other sources of energy, such as oil or electricity? The answer was to not think of customers but of consumers. They are people who love cooking; for whom cooking is not a chore but a lifestyle choice. And it’s easy to imagine the great cast iron woks being used to create all that delicious Chinese food over hot gas flames. With hindsight the answer is obvious, but it was a consumer insight Towngas had never acknowledged, yet alone acted on strategically.
Once Towngas focused on what people were actually doing with their offering – an important question for any company to ask itself! – they could then map out what steps the consumer journey involved. In order to cook a meal, the cook has to know and decide what to cook, how to cook it, how to serve it, and what other than gas is involved. The journey was also not over when the food was prepared, as there was a mess to clean up. And many – though not all – of the steps in the customer journey were opportunities for Towngas to add value. For example, could they provide relevant input into helping one of their busy customers think of a meal to serve their family or friends? Could they improve on cookware, or how easy it is to clean the appliance?
The answer was yes, of course, especially once Towngas considered the 12 million yearly interactions their people had with over 1.5 million customers. Some touchpoints were less personal, such as billing, but others involved human contact such as the call centre. Employees also regularly entered their customers’ homes for safety checks, servicing and installation – far more often than any cookware, appliance or kitchen supplier would. And thus their people became the eyes and ears of the company, gaining new customer insights. People went from providing an efficient service, to providing a “view from the trenches”, one fed back into the organization via new communication’s channels, and a flatter organisational structure.
These brand touchpoints also provided the platform for bringing the brand to life, at “moments-that-matter” to consumers. For example, if you look at the company’s award-winning mobile app today, it is an in-hand pocket-size culinary guide that offers food lovers innovative culinary ideas and a variety of delicious recipes from around the world. And it includes a tab for daily recipes, step-by-step demonstration videos, and a recipe search. They also launched their own brand of condiments and Avenue, the first quality lifestyle magazine to be offered by a utility company to its customers anywhere in the world.
The company also thought about what Nike has done with its flagship stores and it started one-stop retail and service outlets for their more sophisticated customers called TownGas Avenue, as well as a restaurant called Flame that has won a best Western cuisine award. It has great food, hosts events with top chefs from around the world, and hosts cooking classes ¬– you can even get a diploma in culinary arts. And in order to encourage Hong Kong people to cherish food, Towngas partnered to launch a “Cherish Food Reward Scheme” on World Food Day last year, inviting local restaurants to offer rewards to customers who cherish food. All in the service of activating the new lifestyle brand.
Using their frontline insights, Towngas partnered with the French brand Scholtès to launch a new line of premium kitchen appliances. And it even started its own line of kitchens, Mia Cusina, with slick advertising campaigns. It has won awards for both and extended their business model through a partnership with property developers, who are selling apartments with their pre-installed kitchen appliances and cabinets.
It also aligned their CSR efforts around the brand purpose. For example, it is a partner in the social enterprise CookEasy that helps provide nutritious and fresh food packs for families in need.
At the core of the brand is the deepened customer relationship. Towngas is so trusted – winning Hong Kong’s most trusted brand in 2011 for the first time – that it now sells customers household insurance and has one of Hong Kong’s leading credit cards. This might seem ridiculous for a gas supplier, but the alternative was to compete on cost. Today, its whole business model has been transformed from being highly commoditised to highly differentiated: from bland to brand.
All of this fits with my seven step brand traction model. Here is a summary of some of the insights from the Towngas story.
And the final lesson is that a brand can never stand still. In a recent interview, Towngas’ CFO John Ho noted – after making the on-brand observation that he cooks with gas himself and enjoys cooking – “We’ve seen a lot of century old companies disappear: look at Kodak. One hundred and fifty years is about going forward.”
You must be a registered user to add a comment here. If you’ve already registered, please log in. If you haven’t registered yet, please register and log in.Login/Create a Profile