FreshMinds Research Blog

I am very conscious that I am in the middle of a battle ground. You see, before joining FreshMinds, I spent most of my undergraduate life in the low budget offices of my student newspaper, and the subsequent two years pursuing a career in journalism. But for the last 18 months, I have been equally submerged in the world of blogging (both here, for our sister blog at FreshMinds Talent, and on my personal blog View from the Terraces) - the 21st century’s egalitarian answer to newspapers, magazines and old media.

Like the infamous grey squirrel, the rapid growth of new media is threatening to make traditional journalism an endangered species. And the red squirrels in this strained metaphor know all about it. I was lucky enough to be invited by the trustees of the Phillip Geddes Memorial Prize to a lunch at the headquarters of the Financial Times last Friday. The message from some of the grandees of old media there on the day was that good journalism has to be a product, and a product that customers pay for. Lionel Barber, the editor of the FT, joked that he was “fully behind Gordon Brown in tackling inflation” after doubling the price of the FT to £2 in little over three years. But he also made the point that all his publication’s content was paid for - including all the online content on their website, in stark contrast to the likes of Guardian Unlimited and Times Online.

The crisis has reached a head in the States, where the emergence of a host of now world famous political and celebrity spotting blogs and bloggers (The Huffington Post, Perezhilton, Josh Marshall at Talking Points Memo, to name but a few) has undermined the country’s network of powerful local newspaper titles. In May this year Paul Harris at The Observer wrote a poignant article about the plight of Philadelphia, which was in danger of becoming the USA’s first major city to be without a local newspaper. The Daily News and once great Inquirer were both bankrupt - and faced with annihilation, have since decided to circulate the Daily News as a supplement within the more illustrious Inquirer.

In the article, Harris describes the “race no one wants to win: which major US city will be the first to lose all its daily papers? Los Angeles, Boston, Detroit, San Francisco, Miami, Denver and Newark are just a few of the other reluctant participants.” But there are bigger fish on the brink of extinction. The New York Times (which also owns 17 other titles including the Boston Globe and International Herald Tribune) lost £51 million in the first quarter of this year alone. Even the Wall Street Journal has been subject to uncertainty since slipping behind USA Today as America’s most read newspaper. Here in the UK, my local paper back in Bath has gone from a daily to a weekly - a process that is being repeated across the country in countless cities and towns.

Protecting good journalism needn’t be at odds with new media. Blogs like this one should ignite interest and hopefully encourage you to go back and read the salaried Harris’ original article (do it, it’s just here). Then there are blogs, like The Huffington Post, that are actively reinvesting advertising revenue into investigative journalism. But ultimately, this is more than just a battle over how to put money into journalists’ back pockets. It’s about whether, in the age of web 2.0 and 24 hour news, old media and new media titles alike can convince consumers to pay for their content. A penny for your thoughts…

Read more here

• Will Philadelphia be the place where the American newspaper dies?
• Huffington Post launches investigative journalism venture
• Philadelphia Inquirer and Daily News owners file for bankruptcy protection

About the author

Charlie Boss is a former sports writer and freelance journalist turned marketeer for FreshMinds. Since joining FreshMinds in 2007, he has helped getting this blog off the ground as well as contributing to the recruitment consultancy’s PR, direct mail and speaking campaigns.

Many of the great public service innovations were created by the military, including, of course, the internet. But while the technology had been used by the American Department of Defense for decades, public use standardised names, formats, and practices, the defining feature of the World Wide Web.

Sir Tim Berners-Lee, creator of those standardisations, and, as such, the god creator of the web, has just been hired by Gordon Brown to bring our government data into the light. The idea is, if you will excuse the management-speak, to break down the siloes, so that everything is in a comparable code. This is great news, as it gives Sir Tim the public mandate to do what his World Wide Web Consortium has long been campaigning for; in short, taking standardisations to the next level, especially for the most important public data. In this excellent TED talk, he cites FreshMinds Research favourite Hans Rosling, and shows how early versions of Linked Data are already facilitating medical research.

Linked Data takes Wikis to the next level, by incorporating the kind of data that would usually get missed by a search engine. In a sense, this is easier with science, as the precise and limited hypothesis will always be clearly noted in each experiment. So what about more qualitative data?

At this point, the cutting edge may again be the military (with an interesting social media twist). The US intelligence community has been using an internal Wiki called Intellipedia since 2006, but, Marc Ambinder explains, the problem is that:

“it is still viewed as an adjunct to the traditional “agency product” and not a key part of that product itself. If the White House wants information about Iranian opposition leaders, they’re going to be sent agency-specific information from analysts not working together. (If they order a national intelligence estimate, then they’ll get everything at once, but the process […] is less collaborative and more combative.)”

The proposed solution comes via this video, made by Chris Rasmussen. It suggests that Intellipedia profit from “Living Intelligence”, an elegantly simple combination of Wikipedia’s open-access philosophy and the various agencies’ authority. In this model, each agency can insert its stamp of approval on the internal Wiki page, or else insert a comment such as ‘this account differs from the approved version. Click here to compare the two’. The key is that it would reduce the 50,000 reports prepared by the various agencies, without homogenising the information. Instead, attention is immediately drawn to points of agreement and of debate.

The video cites the example of the Mumbai terrorist attacks, perhaps the first international crisis in which Wikipedia became the up-to-date information source of choice. (Twitter was also a source of the very latest information, though the heading at the top of the page summed up its shortcomings nicely: “16,405 more results since you started searching. Refresh to see them”).

Living intelligence could be applied well beyond the US intelligence community, of course. It might also provide the answer to those periodical broadsheet articles about the failings of Wikipedia. The format of these is usually as follows: “I checked Wikipedia, found something I know about, saw that it was wrong and so I … wrote this article to let people know.” For some reason, they never mention whether or not they changed the offending article. Now, those who are part of a recognised authority (the BBC, say, or where appropriate, NGOs, professional organisations and even governments) can stamp either approval or disapproval on the entries that matter to them. Indeed, Tim Berners-Lee’s Consortium has proposed just such a system, not limited to Wikipedia. The key is that these organisations merely voice dissent, rather than blocking the original content. It would encourage them to put well-reasoned, easy-to-grasp objections in close proximity to the information they felt to be misleading.

If the US intelligence community takes Rasmussen’s advice, I hope he lets us know, and that people like Sir Tim then help to apply the principles more widely. After all, it’s a formula that’s had not a little success in the past. While this interactive, properly linked and unobtrusively kitemarked web doesn’t suggest a shift as radical as that into Web 2.0, it could certainly be that start of a new phase. Web 2.1, anyone?

Read more here

• Tim Berners-Lee gives first insight into government data plan
• Hans Rosling on displaying statistics
• Intellipedia inches toward acceptance

About the author

Dave Bevan is an Interim Analyst working mainly in the Education Team at FreshMinds Research. He previously worked for the G77 (group of developing countries) at the Rome Chapter of the United Nations, and before that was a dessert chef, a tour guide on London’s open-top buses and an inconsistent stand-up comic. Dave’s interests include this, this and this.

Wimbledon is well into its swing as I write this, and the crowds thronging Murray Mount (or whatever they’re calling it this week) bear witness to the lasting appeal of the tournament, even in the current economic climate. Wimbledon really shouldn’t be this popular – it takes place mostly in the week, for a start, is expensive, and is struggling to shake its image as trenchantly middle class (so much so that the LTA hired Max Clifford last year to help broaden its appeal). When we factor in the poor performance of British players – only two made it past the first round in the singles – the figures that surround this year’s tournament make for fascinating reading.

Attendance for the opening day reached 42,811, an increase of nearly 3,500 on the previous opening day record from 2001. More than 14,000 lined up in the ticket queue - 1,600 more than last year. Pre-tournament ticket requests are thought to be up 20%. As if this isn’t enough, the All England Club recently sold out 2,500 Centre Court seats in five-year blocks for £27,500 each. Buyers have the right to one reserved seat on Centre Court for every day of the tournament between the years 2011-15. The five-year debentures sold out in May and have raised a total of £58.9 million. Throw into the mix the staggering amounts spent by businesses on corporate hospitality (including, controversially, the £300,000 spent this year by RBS) and the coffers are healthy in SW19.

No wonder the term ‘recession-proof’ is being thrown around by the media. While the figures surrounding the tournament are certainly impressive, British performance is not. With the amount of money being made by the LTA, close scrutiny of how this money is being spent is to be expected. Max Clifford doesn’t come cheap, nor does Brad Gilbert (allegedly paid £800,000 by the LTA to coach Andy Murray before he hired his own team). Looking long-term, while the state of the economy will improve, tennis is in danger of becoming ever more niche, both as an activity and as a spectator sport.

While 12% of 11-19 year olds played tennis on a weekly basis in 1998, that figure had slumped to 5% by 2008 according a survey by the British Market Research Bureau. And although there are currently 10,000 park courts in the UK, the Tennis Foundation says there were about 33,000 three years ago. It doesn’t take an economics degree to make some connections – fewer kids playing tennis equals less chance of the next Andy Murray, meaning less sponsorship, less media buzz, and, ultimately, declining attendance at the tournament. While there will always be the attraction of foreign stars such as Federer and Nadal, the Wimbledon atmosphere is traditionally powered by the hope of a British victory, however slight it may be. Andy Murray, fitness allowing, will be at the top of his game for at least seven or eight years. But the current monetary popularity of the tournament may be undone ten or fifteen years down the line if grassroots popularity continues to nosedive. What will Murray Mount be called after Murray is gone?

Read more here

• Is the global recession going to cut into players’ pay?
• Wimbledon brand appears to be recession-proof
• Wimbledon sets record for opening-day ticket sales

About the author

Richie Jones

Richie is a Research Manager in the Financial Services team at FreshMinds Research. Joining FreshMinds originally as a temp, Richie has worked for all of the sector teams, and on pretty much every type of project FreshMinds carries out. Graduating from Cambridge University in 2003 with a degree in English, Richie has put this to use by amassing an encyclopaedic knowledge of Blackadder quotes for every social occasion.

In the sixth and final part of our ‘research in utilities’ mini-series Ruth Evans looks at the problems utilities firms and energy providers face when trying to garner customer loyalty:

I wrote a few months ago about the struggles utilities firms face in trying to make their customers love them and asked what they could try next. Well here’s another idea.

We’ve recently been working with a major public services support provider. Their customers are local authorities, for whom they provide such essential services as street cleaning, waste collection and road maintenance. We’ve found that our client is increasingly taking into account the views of the residents who benefit from their services. In fact, when we think about it, why are the local authorities the customers anyway? Sure, they get to decide who provides the services but it’s the residents’ tax money that’s being spent. The Place Survey, run by DCLG, now offers a nifty way for firms to check how they’re measuring up, but providers are still left wondering how they can improve things. Should their brand be visible to residents or should they work through the face of the local authority? How can residents best make their opinions heard?

The utilities industry clearly faces the same quandary and Northern Gas Networks (NGN) have just come up with one solution. They have appointed seven Consumer Liaison Officers to deal directly with the public. Part of each Officer’s job is to respond to public concerns, but they must also pre-empt them by doing risk assessment surveys of areas before work starts, taking into account any ways in which the work might adversely affect the community. After the work is complete, NGN conducts a survey to find out what affected members of the public thought about the way it was completed. More paperwork or a real example of how to change grass roots opinions?  Is this the end of pneumatic drills keeping us awake at night with no-one to scream at except your poor beleaguered local councillor?

Time will tell, but it does offer one potential way of deflecting attention from the usual response that “it’s all about price”.

Read more here

• How can brands survive the great recession?
• Quality, loyalty, unity
• Research in utilities: the case for renewables

About the author

Ruth heads up the FreshMinds Research Professional Services team, working with companies across a range of industries, from legal through to private equity. She joined FreshMinds from Rocket Science and brought a wealth of experience which has been invaluable across the research team. It comes as no surprise that Ruth knows a thing or two about energy – if she isn’t climbing, running up, or swimming across something, she’s hurtling down it on a board – and makes the rest of us feel rather lethargic by comparison.

We’ve recently come across this YouTube video, from consultancy Engage ORM:

It’s a fun piece suggesting that social media is the new punk rock. The argument is essentially that punk drove the democratisation of comment through music while social media performs a similar function through technology. If you haven’t seen it, let me summarize. But do watch it – its well worth it. The authors paint a nice picture of the lazy corporate world of pop in the early 70s – controlled by big record labels, and beset by safe, sensible, soft styles. They suggest that punk was a reaction to this – a demand from a jaded audience for a radical shake-up, and for a music that reflected their concerns, their demands, their anger and frustration. OK, the music was rough, the instruments cheap and the production values low. But that wasn’t the point. Quality become secondary – it was more important that everyone had a voice – and they used it.

When put like that, the parallel is pretty compelling. Social media is often rough and ready. Blogs (like this one) are written swiftly, in natural tones. The polish and technical perfection of the medium is not important. It’s the fact that anyone can do it. Everyone can get their message across. And those messages, by their very existence, demand notice. They stimulate reaction and maybe, just maybe, they make a difference.

The producers then go on to suggest that latterly the punk movement was co-opted and corrupted by big corporations. Watered down, the rough edges were smoothed and re-packaged for a mass-market. I guess the message is somewhere between a warning and a rueful acceptance of inevitability – the money men always win in the end. Watch out Twitter – you’re next.

As I’m one of the few people at FreshMinds who can remember seeing a punk band live, I feel I should stick my safety-pinned nose in to the debate. Give me a second to lace up my Doc Martens and I’ll be right with you.

It’s certainly an interesting video piece. It’s a neat comparison, and a well produced argument (despite a slightly cheesey ending). But I do think it’s a slightly rose-tinted view of punk to be honest. There’s a lot of talk of ‘being heard’ and ‘talking about things that mattered to them’. To be honest, I think that punk was a lot more interesting and more dangerous than that. It was nihilistic, anarchistic and largely defined by what it was against, rather than what it was for. And it was against pretty much everything.

Quite apart from that, there’s also the issue that the integrity of punk was pretty much compromised from the start. This lack of a positive direction meant that it had a very cynical core. The Sex Pistols were about making money. Those people that accuse John ‘Country Life’ Lydon of selling out are missing the point. As Johnny Rotten he was always pretty clear – it was about the money. It was the Great Rock n Roll Swindle from the start.  McClaren and Westwood grasped the anger of a frustrated generation and created a fashion movement from it. A fashion movement, mind you – not a social phenomenon, not a call to arms. A style of music, a ‘look’, an attitude.

This is very different from social media. Sure, many people are trying to make money. Who hasn’t dreamt of launching the next Facebook, MySpace or YouTube? But it’s a not a product that’s being sold, and it’s the exact opposite of nihilism and despair. Its enablement that is on offer – ubiquitous communication and universally interaction. Every person is equal, everyone’s views carry equal weight. 

Actually, given that it is Glastonbury week, I am inclined to suggest a far better music comparator to social media - the hippy movement of the late sixties and early seventies. A free, open, all-inclusive culture. Different genres and mediums mixing, cross-fertilising and building upon each other. Poetry, music, art, it sounds to me like the coming together of computing, mobile telephony, design and journalism. The feeling of raw, limitless power is the same: together we can change the world… with words. Anything is possible. Dare to dream.

Woodstock had half a million people coming together in field outside New York. Twitter has 55 million people accessing monthly. Wikipedia has hundreds of millions of ordinary people using, adding to and developing a global knowledge base. 

I have my scepticism about many aspects of social media. I think its still in its infancy, and we have literally no idea how it will develop. But I do agree with the final sentiment of the piece – after this, the world will never be the same again.

Read more here

• Punk Rock and Social Media: a post from speaker Gerry McCusker
• What Green Day Can Teach Us About Social Media
• Social Media Fraud: Twitter Punk’d?

Following on from yesterday’s post on how nuclear power looks to be here to stay, today instalment in the ‘research in utilities’ mini-series looks at the potential for growth in the renewables sector, considering the viability of wind and solar power as sources of energy in the years to come.

In March this year Will Dawson wrote in the FreshMinds Talent blog about the threat to UK green energy plans as Iberdrola slashed investment in British wind farms. In mid-April Will then told how EDF, E.ON and RWE had nominated 11 sites for the next generation of nuclear power. The word on the energy street in the Energy sector was that, like it or not, nuclear power is needed if energy demands are to be met. So what about the increasing drive towards green, sustainable energy sources that we’ve witnessed in recent years?

Just days after BP announced it was cutting 620 of the 2,200 jobs inside its solar operation, a survey by the Renewable Energy Association (REA) found that more than three quarters of Britain’s green energy companies are facing major difficulties in accessing loans and investment. As other countries continue to commit huge stimulus monies to their renewables industries, the UK is finding itself at a serious competitive disadvantage.

However, the future might not be as bleak as it seems. In April’s Budget the government declared a £7.8 billion stimulus package for the energy sector. This included £1.365bn for green energy supply and energy efficiency, £6.5 bn in capital support through the European Investment Bank and other means, and an unspecified ‘funding mechanism’ for up to four carbon capture demonstration projects. The Chancellor also introduced five year carbon budgets for all sectors of the economy.

Furthermore, it seems that innovation hasn’t yet been totally relegated to the back seat. British Gas has teamed up with Romag Holdings, a specialist manufacturer of glass and plastic composites, to develop a product that they hope will become part of the UK’s electric vehicle infrastructure. Romag’s solar car parking canopy uses photovoltaic panels to generate electricity for charging electric vehicles.

What impact will the new dawn of risk aversion have? Regulation is certainly hotting up, with introduction earlier this year of the Environmental Damage (Prevention and Remediation) Regulations 2009 (which enact the European Environmental Liability Directive). These regulations dictate the responsibilities of EU member states to prevent and remedy environmental damage, including holding operators financially liable for any damage they have caused. With investors, customers and regulators continuing to scrutinise companies’ CSR efforts (new research has revealed that 18% more people intend to invest ethically this year) these regulations only add to the pressure.

So does all this mean that the renewables movement is still alive and kicking? Evidence suggests that despite the financial crisis, investment in renewables is up and UK companies are continuing to push the green agenda, even if, for the moment at least, it’s not enough to challenge the likes of nuclear power.

On Monday, in the final part of our ‘research in utilities’ mini-series Ruth Evans writes about building brand loyalty in the energy and utilities sectors and considers the best ways of connecting with your customers.

Read more here

• What is renewable energy?
• Renewable energy key to economic development
• Research in energy: the case for nuclear power

The fourth and fifth posts in our ‘research in utilities’ mini-series look at the debate surrounding nuclear power as a viable energy source for the future. Today we consider the benefits of taking France’s lead and joining the nuclear brigade.

Nuclear energy is a steady producer of power and is increasingly being adopted as the chosen producer of electricity around the world. But does it really present a serious challenge to global warming? With the constant development of new technologies, nuclear power is becoming both safer and more efficient. But countering these beneficial developments is the anti-nuclear public opinion pervading the UK that regards nuclear as an invasive and risk-heavy solution to global warming. So what are the viewpoints, where do we stand, and what does it all mean?

The UK produces 19% of its total power through nuclear. This compares with 79% in France. Can we ever compete with the likes of the French? As a nation France loves  nuclear. Us Brits seem to have little issue with the nuclear concept, buying nuclear energy from the French to supplement our own supplies. Rather than produce it ourselves we are  sufficiently risk-averse that the best option for us is to import. So, we’re negating risk whilst also benefiting from the ‘green’ power generation process. That’s two points ticked off - nice.

Those against nuclear love to bring up the associated dangers, but in actual fact, throughout history nuclear disasters have killed far fewer people than the oil and coal industries. So there was the Windscale fire in the UK in 1957, the Three Mile Island disaster in the US in 1979, and Chernobyl in the Ukraine in 1986, but have there been any others? In comparison, in the US in 2008 alone 30 people died as a direct result of working in a coal mine. More alarmingly, between 2000 and 2005 the number of mine workers in China killed as a result of coal mining didn’t drop below 5,000.

Naturally, renewable power sources would be the ultimate dream, but the technology to produce mass power from these sources just doesn’t exist yet. Despite a huge global investment of over £85 billion on wind, solar and other clean technologies, a third of which is destined for British and European shores, realistically, renewable forms of energy won’t be available to the mass market for a decade, if not longer. Nuclear technologies, on the other hand, are already in place and need little adaptation, other than in the public opinions surrounding their use.

Nuclear energy, it seems, is an inevitability. It just needs a good face-lift in order for it to be embraced as a clean and safe source of energy across the UK.

You’ve heard the case for nuclear power; now hear the case for renewables. In the penultimate instalment of our ‘research in energy’ series Pierluigi Catilli writes tomorrow on the benefits of wind, solar and other ‘clean’ sources of power.

Read more here

• Permanent Revolution: the pros and cons of nuclear power
• The revival of nuclear power gathers pace in Europe, but will a free market finance it?
• Research in utilities: the new kid on the block?

About the author

James Bakewell is a Research Manager within the Professional Services team at FreshMinds. Having worked within the team for the last 2 years, James has a strong understanding of the issues facing numerous professional services firms, including those within the utilities sector. James especially enjoys the challenges of finding strategic solutions for a number of top-end clients at the forefront of their industries.

The third part of our ‘research in utilities’ mini-series looks at the growth of the Liquefied Natural Gas (LNG) industry. LNG has been around for more than 60 years and yet it is still considered a relatively new concept. Here we look at its growth potential and consider why it has taken so long to get this far.

In a downturn-fuelled push to diversification, countries are looking at different ways to capitalize on their natural assets. Amidst this Iran is apparently entering the LNG market. What is LNG and how significant will this move become?

LNG is the result of removing certain components from natural gas and reducing its volume to 1/600th of what it was as a gas. This makes it much more cost-efficient to transport over long distances where pipelines do not exist. It is simply re-gassified on arrival to give pipeline natural gas again.

It sounds simple enough, so what’s all the fuss about? Well, a cursory glance at the outlook for LNG on the web shows that a lot of optimism about its unfulfilled potential.

From a global perspective, there are bubbles of activity across North Africa and the Middle East. LNG producers - Qatar, Abu Dhabi, Oman and Algeria – are being joined by new entrants - Nigeria, Egypt and Libya.  Angola and Equatorial Guinea are also considering their options.

A more active market, complete with short-term trading, is also emerging in which barrels of gas destined for one country may be re-routed to a higher paying one. The US is emerging as the hungriest for LNG, closely followed by Europe as prospects from North Sea production decline in the medium-term.

Is this the next big thing? At the 14th Asia Oil and Gas Conference last week in Kuala Lumpur, delegates certainly thought so. Several spokespeople for the energy majors (Chevron, Petronas and ExxonMobil) commented that the long-term outlook for LNG looked bright, despite the recession.

But it isn’t a new phenomenon. The first LNG trade took place almost half a century ago between France, the UK and Algeria, yet it still only makes up 7% of the world’s natural gas demand, which in turn makes up about a quarter of our energy mix. If its growth potential is large, it’s partly due to the fact that usage is still less than 2%. What’s holding it up?

Building the infrastructure is expensive – very expensive – and investors want to tie buyers into long-term contracts. The LNG buyers have also changed since the early days. Then it tended to be government monopolies and regulated utilities: new buyers are more risk-averse.

Furthermore, LNG only tends to be exported to foreign markets when there is surplus capacity in plants and on tankers. As a result of this, and political instabilities, reliability of supply may become an issue. Liquefaction and regassification plants and gas-carrying ships are seen as soft targets for terrorism and the rise of piracy in the Indian Ocean is an additional cause for concern.

So does this mean that LNG has no future?  Not necessarily. Hydrocarbons (of which gas is one) are set to remain important pieces of our energy jigsaw until 2030, although they are not especially “green”. Demand for natural gas is expected to grow 1.8% per year between now and 2030 compared with 1% for crude oil. Just take with a pinch of salt what some of its advocates say, that’s all.

In the first of two instalments on nuclear versus renewable energy, join James Bakewell tomorrow as he outlines the case for nuclear power as the energy source for the future. 

Read more here

• Global LNG market - the road ahead
• Global demand and supply scenario of LNG
• Research in utilities: the perfect energy bill

About the author

Paul Bush is a lead Research Manager in the Professional Services team at FreshMinds Research. His background is predominantly professional services - he worked for Accenture for five years across a variety of sectors (financial services, government, healthcare and retail) and prior to that was on the Unilever three year graduate scheme.

Paul’s interests include swimming, running, going on adventure holidays and reading history/20th Century fiction. He is part way through completion of the Chartered Financial Analyst (CFA) exam.

In our second instalment in the ‘research in utilities’ mini-series we consider what the ‘perfect’ energy bill would look like and discuss how feasible this actually is.

Saving energy is one of the most talked about issues at the moment, with seemingly more reasons to do it appearing everyday. The two most frequent I hear are to be more “green” and to save money. There is no doubt that both causes are extremely worthy, but regardless of whether your reasons are ethical or economical, have your energy saving exploits impacted the bottom line of your energy bill? More to the point, would you even know if they had?

A recent survey by Which? shows that UK energy customers are confused by complicated energy bills, with 7 out of 10 Britons claiming bewilderment at the number of tariffs available (there are over 4000 of them!) In the light of these results, Which? have called on the regulatory body Ofgem to force suppliers to make their tariffs more straightforward and their bills easier to read.

This is, perhaps, easier said than done.  Is there such a thing as the perfect energy tariff? Furthermore, how can a bill that has to contain detailed technical information be presented in a more easy-to-understand way?

Let’s start with tariffs, all 4000 of them. Surely they weren’t dreamt up for the sake of it – there must be different benefits and drawbacks to each, right? For something as important as energy I would have thought that wide choice is a good thing, but maybe the number of options aren’t the problem, rather the way in which they are presented. 

Lots of things in life come in more than 4000 varieties and people manage not to get confused. It’s not often I find myself in a state of befuddlement when faced with having to choose a new book to read, for example. I guess I might do if I had to find my way to all the book manufacturers and read every book they made, but luckily for me there are these large buildings called “bookshops” which people use to keep all the books in one place. Not only that, they’ve categorised them into genres so it’s easy to find the type of book I’m after. And best of all there’s a summary of what’s inside written on the back so I can see at a glance if it’s for me. 

So instead of getting rid of all these tariffs and options, perhaps the utilities industry could take a leaf out of the book industry’s…um, book. Retain the benefits of having such a large selection to choose from, but make the choosing process a little less demanding.

The physical bill provides an altogether trickier proposition. Speaking to a number of colleagues, the consensus was that the bill should feature “£0” in the bottom right hand corner - I can’t see many utility companies adopting that practice any time soon! Even Which? can’t provide a suitable solution.

Looking at consumer feedback, one company stands out as keeping ahead when it comes to bills. Not only is Ebico the UK’s sole not-for-profit energy company, it also has a thoroughly transparent pricing structure. Each product – electricity or gas – is charged at a single flat-rate with no standing charge, so customers only pay for what they use. In addition, the same unit rate applies whichever payment option the customer selects.

So if transparency is one pillar, what are the others? The point is no-one really knows what consumers are looking for. Ironically, to figure out how to present a simple bill that informs the customer of all the information required would probably require a pretty complex consumer study.

Join Paul Bush tomorrow as he takes at look at the LNG industry and asks whether this really is the future for energy supply.

Read more here

• MPs demand simpler bills and fewer domestic energy tariffs
• Consumers ‘confused’ about energy tariffs
• Research in utilities: competition finally trickles into the water industry

About the author

After working for FreshMinds research as a freelance analyst, Aidan Barnes joined us full-time as an Associate Analyst earlier this year, working primarily for the Professional Services team. In his spare time he plays Ultimate Frisbee for ‘London Revolution’, and claims it’s a proper sport. Considering he also supports Tottenham Hotspur, we’re glad that he knows more about research than he knows about football.

This week our utilities team will be taking turns to write daily blog posts on research in the utilities industry. We start our ‘research in utilities’ mini-series with a discussion of competition in the water sector.

Water is one of the primary elements we need to survive – we need it to shower, to rehydrate, to wash up…I could go on. As water is so integral to our daily lives, why should we have to pay for it? More importantly, why do we have so little control over what we pay?

Deregulation in the gas and electricity sectors has seen consumers gaining more control over their monthly bills as they are able to choose their own suppliers. Websites like uswitch.com let us compare the best deals, take advantage of new schemes and switch easily between companies – incredibly useful in a climate in which every penny counts. So what about water?

Rumours have surrounded the water industry for years. In March 2008 these finally brought about an independent review of competition and innovation within the sector, and the findings of the Cave Review were released last month. The detailed report argues that to meet future challenges such as climate change and rising demand, steps must be taken to deliver benefits not only to the consumer, but also to the environment. Cave believes the key to this is encouraging innovation and competition industry-wide, from upstream processes to the far less glamorous waste water and sludge.

This might sound revolutionary, but in practice facilitation would require considerable planning and process change, from strengthening infrastructures to cope with the surge of supplier switching, to water companies changing their mindsets and business practices. In the interim, a step-by-step approach is recommended, whereby competition is initially open to businesses only. Currently, companies with an annual consumption of 50 megalitres can choose their own supplier, with the plan being to drop this to 5 megalitres. If successful, this would be reduced further to include households.

So, what does this mean for water companies? Through our research in energy, FreshMinds has seen first hand the importance for companies of staying one step ahead of the competition in a deregulated market. This covers a wide range of issues, from building effective, revenue-sustaining pricing structures, to understanding consumer expectations for segmentation and customer acquisition purposes, to keeping abreast of competitor innovation and proposition development.

Whereas supply currently centres around local monopolies, future winners will be those who can guarantee superior benefits, whether through better choice, lower prices, better service or more environmental initiatives. In practice, the Cave Review can only give recommendations – it is for the government to take the next steps. Hidden in the shadow of a huge economic crisis and the apparent near breakdown of the current government, this may not seem a priority. However, it is only a matter of time until it happens and, as such, it is crucial that companies start preparing and acting now to ensure they aren’t flushed out by the competition in the future.

Tomorrow Aidan Barnes considers what the ‘perfect’ energy bill would look like and asks whether such a thing could exist.

Read more here

• Global water business, a growth industry attracting more investors
• Will the Cave Review lead to forced separation of water companies?
• The rules that favour water companies

About the author

Amanda Gray works as a research consultant at FreshMinds Research. Amanda’s previous roles at L’Oreal and Unilever help her get right to the heart of evaluating clients’ branding strategies, which she combines with a flare for identifying commercial opportunities across different markets and industries.