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How a Hong Kong gas company went from bland to brand

Brand experience is the main differentiator for companies today. Nader Tavassoli introduces seven steps to achieving brand traction.

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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.

Seven steps for brand traction

The story of Towngas’s turnaround adheres to the seven steps of my brand traction model:

1. Define the brand purpose
2. Map the customer journey
3. Match brand touchpoints
4. Deliver brand acts at “moments-that-matter”
5. Provide brand leadership & alignment
6. Gain internal brand engagement via brand practices
7. Implement brand metrics


Re-energising the business model


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.


The power of consumer insight


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.


From bland to brand


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.


Gaining traction


All of this fits with my seven step brand traction model. Here is a summary of some of the insights from the Towngas story.

1. Brand purpose

Don’t think customer and selling, but think consumer and doing. Why are people buying from you? Gas does not have inherent value for consumers, but cooking and sharing a meal with friends and family does. The answer is often blindingly obvious with hindsight, but this only makes the lack of purposeful action by the company more of a short-coming.

 

2. Customer journey

Managers often confuse the “sales funnel” – from customer’s brand awareness to trial to adoption – with the consumer experience , as part of which the purchase stage more typically is perceived as a cost by consumers, rather than value adding. Telling customers about the cost benefits of gas or assuring them about its safety, is useful but narrowly product-focused. Mapping out the diverse steps in the cook’s journey – and these may differ across customer segments – provided a canvas of intervention possibilities.

 

3. Brand touchpoints

Branding is more than a communications function. Towngas has developed several successful advertising campaigns, but these communicate the brand promise and set expectations. Customers return when these expectations are met or exceeded in the actual experience, that is, along the consumer journey. And this is not as much about the cost or quality of the gas, than about their own behaviours as cooks. Think of brand touchpoints as opportunities to help consumers better do what they want to be doing.

 

4. Brand acts at moments-that-matter

Not every intervention should be “branded”, that would be overkill. But there are some moments, especially those that are important and matter to consumers. These can provide the most meaningful brand experiences. For example, during each visit to a customer’s home, the technician will not just check the equipment but also ask a series of questions to really engage with their customers. They might give cooking tips or advice on how to clean an appliance.

 

5. Brand leadership and alignment

Transforming your business is not an exercise to be left to the marketing director alone. It is a cross-functional strategic exercise that must come top-down from the top. In the case of Towngas, this is currently Managing Director Alfred Chan, who Harvard Business Review last year ranked as the only Hong Kong leader among the World’s 100 Best-Performing CEOs. As all senior managers, he is part of a customer focus team and visit customers twice a month. And to align the organization, for example to create better lines of communications to the top, Towngas instituted a flatter organisational structure, one aligned around business and consumer segments.

 

6. Brand practices & engagement

Building brands from the inside out requires culture change and continuous training to get employees engaged with the brand and not just their jobs. Towngas created new customer-focused values and frontline employees are empowered to make decisions on the spot. And they are highly engaged, knowing that their knowledge and actions have taken the company to where it is. Unsurprisingly, Towngas has also raked in employer awards. After all, building a strong brand is rarely just an outward-facing exercise. It starts with your people being motivated by the brand purpose, and changing their behaviours – and thereby the organizational culture – in a way that delivers a differentiated customer experience.

 

7. Brand metrics

Measuring success is about having internal and external metrics that are specific to your brand and that feed in to both customers and employees. At Towngas, it is not just about customer satisfaction and employee engagement in the generic sense, but people internally are engaged with the brand purpose, monitoring key touchpoints, and whether customers perceive them as a trusted lifestyle brand.


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.”

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