Wednesday, July 30, 2014

Fixing a break

Utilities are one sector of the U.S. economy that seem to constantly struggle with reputation.  Service interruptions. Rate hikes. Allegations of over-paid workers.

Is reputation maintenance a losing battle?
LATimes: The broken water main near UCLA

Because they provide much-needed services to, well, almost all of us (there are those who are "off the grid"), utilities are constantly on consumer's mind.  We scrutinize our water and power bills on a regular basis. We need trained workers to turn on our natural gas if the service is interrupted.  If we don't pay for these services, these utilities will shut them. If a supply interruption occurs somewhere else in the world, the shortage means higher fuel costs in winter.

Then utilities get hit by a catastrophe.  Storms knock down power lines. And, as was the case this week in Los Angeles, underground pipelines rupture.

Havoc ensues, and the no-win game of perception vs. reality begins.  The news media feeding frenzy begins. Leadership is questioned. 

This week, a 3-foot-diameter water main ruptured under a major thoroughfare. Before it could be turned off, an ocean of water flowed into the nearby UCLA campus and flooded buildings, a revered basketball stadium and parking lots.

Within the first hour of the rupture, the city water utility came under instant attack from local talk radio stations and from other news media for the perceived slow response of utility crews.  Reasonable explanations were not believed.  Snarky attacks came from all corners.

Why? There are two possible answers.

1.  Studies are showing a disturbing trend:  Utility reputation continues to erode, in part by rising rates and bigger profits.
2.  Expectation.  In today's speedy world - from instant access to information to online shopping - consumer patience is razor thin.  The "assumption rate" that solutions can instantly appear is rising at exponential rate.

Utilities need the trust of their customers - if only to reduce the rancor when rate hikes are proposed, or in the case of publicly held companies, to prevent stockholder revolt.

Large municipal-run utilities such as the Los Angeles Department of Water and Power have been on the defensive for decades. (In the case of LADWP, one can start with its rough beginning - aka "Chinatown" - and look to today with customers receiving $5,000 water bills because of glitches with its new computer program).

Authenticity Gap

They do try to make things better. 

Utilities do make some attempts at building trust and reputation - through community programs, improved customer service, etc.  But these small efforts do not build the necessary foundation to create wholesale swings in sentiment.

As Richard Mullinax at FleishmanHillard and others have pointed out, utilities must focus their reputation-building efforts at those areas in their operations and overall "presence" with the biggest authenticity gaps, and not spend any more time in areas where they have earned success.   

Understanding the gap begins with research.  In my experience in working with and for utilities, many assume they know their customers (because they deal with them every day). But those who have conducted attitude research invariably find underlying sentiments they never new existed.  What research usually shows is that a visible action or negative response from a customer may have been fostered or created from an entirely different issue - and may have been festering for some time.   

Strategic public relations is all about understanding the audience, and developing a comprehensive plan to reach these audiences in the way they want to hear you. 

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