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. 

Thursday, July 10, 2014

Carrot or Stick?

Motivating changes in public behavior is tricky.  Especially when the effort is handicapped by mixed messages.

California, it appears, is fed up with asking...and now is moving to a punitive effort to prompt its 38 million residents to be more serious about saving water.

State officials are close to allowing water districts across California to impose $500 daily fines on the worst water offenders - those who still waste water during the worst recorded drought in the state's history.

Up to now, the governor and others have asked residents to voluntarily reduce their water use by 20 percent. It's a hefty, but not impossible task for individuals to cut back 700 gallons a day. 

But so far, the best anyone can do is 7 percent. 

As reservoirs keep dropping and with no rain in sight for months, California decided to take the next step and force change through financial hardship.

Water officials know the final trump card in the water conservation game plan is pricing (and mandatory restrictions).  

But are residents at fault for not saving more water before now? Are residents simply being lazy?

Not entirely.

The state's water agencies received a wake-up call when the last big drought hit (from 1986 to 1991). They scrambled to build dams and additional storage because they knew it would happen again and they didn't want to come up short-handed with water for their customers.

Now, the next big drought is here and....these added reservoirs (and a whole lot of water-efficient toilets and other devices in homes) are making a difference.

When the official "drought" was declared earlier this year, and the governor asked for a voluntary 20 percent reduction - residents also heard a competing message from some water districts. It essentially was: "We've got this."

The message: We have enough water to get us through this year. Worry, but not too much. 

Even with advertising campaigns, public outreach efforts, and images of cracked earth on billboards - residents did not answer the call in dramatic fashion because they were told early on to relax. No mandatory water restrictions were in place for most urban areas. 

This was serious - but not urgent enough to take serious action. Californians were not prepared to let their lawns turn brown. 

In recent weeks, researchers have been probing Californians to figure out what will motivate them to save water in more extreme amounts. (As it, let's get more serious).  The results are showing up in a $5 million advertising campaign in Southern California - which focuses on protecting the state we love. Using humor, the radio, TV and web banner campaign should get people's attention - if only to remind them to remain diligent.

Yet, as more of California experiences the worst of the worst drought conditions (dark red circles on the drought map), other public-motivation tactics will likely be required. 

Plenty of studies show that consumers will curtail purchases or reduce an activity when the price/cost goes up.  Higher gasoline prices mean a decline in consumption. A higher electric bills usually prompts homeowners to turn off more lights and reset their air conditioning thermostats.

The same holds true for water.  Conservation-based pricing is currently used by dozens of California water agencies - and most, if not all, of these agencies report "water-efficiency" improvements among customers. 

If you see you are paying a "penalty" for using too much water, you likely will take specific steps to be more efficient.  That's motivation to fix the leaking toilet, finally adjust the sprinkler timer and don't leave the faucet running when you are brushing your teeth or washing your hands.

So which is it?  Can social change occur through public relations, or do we achieve real action through punitive measures and threats? 

Yes to both, but only in extreme circumstances and when the message is clear. 

Well-designed communications efforts clearly demonstrated that you can obtain some social change.  However, a 7% voluntary reduction is only slightly better than a previous water-saving campaign conducted during a non-drought period in California.  It is entirely reasonable to conclude that a larger water-saving percentage could have been achieved if the message was more serious at the beginning.