PRESS RELEASE 9 October 2017
European energy brands risk losing billions
Overvaluation of brand value by €30 billion worrying situation
European energy providers are threatened with the loss of billions. At this time, they overvalue the commercial brand value on their balance sheets by at least €30 billion. This is one of the most striking conclusions of research conducted by Brandhome and Professor Fridrik Larsen. Major international players such as Engie, E.on, Eni and Centrica massively overestimate their brand value, because the real commercial value of their brands is on average worth only half of what is represented, according to the calculation made using the Brandhome digital brand equity calculatorâ.
Erik Saelens, Brandhome: “It is a dangerous situation. There is too much hot air in the balance sheets of energy providers that is not guaranteed by any real value. The energy sector is currently a bubble. The commercial brand value on-the-paper, or what is stated on the balance sheets, is much greater than the commercial brand value off-the-paper, or the actual brand value. Sometimes as much as 42 times more! Dutch Eneco is the only positive outlier. Commercially, their brand is worth double what it says on the balance sheet. The Swedish firm Vattenfall is also doing well. The value expressed on their balance sheet is approximately the same as their commercial value in the market.”
Sector needs to reinvent itself
The energy sector has long been under pressure: thanks to liberalization, prices have become transparent and the obligatory “loyalty” of consumers has dropped sharply. In addition, it is an open secret that Big Tech companies want to take the battle for the home into the energy market.
Larsen has a clear message for energy companies: “Unfortunately, I expect that we will see many big energy providers going bankrupt in the coming years, being taken over by Big Tech companies, or that the government will have to lend a hand to keep these companies afloat. I hope our research will be a wake-up call and that energy brands will evolve to the point that they reinvent themselves and start offering their clients genuine added value.”
strategy | communication | implementation
CHARGE 2017
Energy Branding
Apple energy, anyone?
In the last few weeks, Brandhome also conducted research into the energy markets of Belgium and the Netherlands. This research shows that price is still the most important reason (62%) for choosing a provider. The research also shows that at least 59% of all customers would consider switching to brands such as Samsung, Apple or Google if they offered energy.
These brands have gained the trust of consumers, and consumers are willing to pay more as a result. Among Apple fans, 38% were prepared to pay at least 28% more for Apple energy! Saelens: “This is the first time we’ve seen a commodity offering, such as energy, having a brand pricing power comparable to that of a luxury brand. Brands like these could, therefore, in a very short time and in a highly regulated market like the energy market, turn everything upside down because they are able to dictate the switching elasticity of the market.”
International conference on energy branding
Erik Saelens will explain the research results in detail at CHARGE, energy branding conference, which will be held on 9 and 10 October in Reykjavik, Iceland. Saelens has been asked as a keynote speaker on account of his wide experience in branding and brand value in combination with his knowledge of the energy sector.
Brandhome is a communications agency that has developed a unique and effective method to build brands, the Brandhome method®. Among other things, one of the agency’s main goals is to constantly increase its knowledge of brands and branding.
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Note to editorial team / not for publication:
For more information concerning this research, please contact Machteld Schierbeek, [email protected], +32 (0)3 237 05 95