by Alan Brew, originally posted on Namedroppings

“Yes, we are an oil company. But right now we are also providing natural gas, solar, hydrogen, geothermal. Because we live on this planet, too.”

No, this is not part of a mea culpa from BP. It’s a couple of lines from a Chevron ad, and one which BP would do well to consider emulating given the situation they are in. With smart and refreshing directness, Chevron’s “Human Energy” TV ad from McGarry Bowen makes the case for oil and an oil company better than it has ever been made. Actor Campbell Scott narrates the 150 second spot that unapologetically states Chevron’s case and its position in the global energy debate as an oil company searching for solutions. “…today, tomorrow and the foreseeable future, our lives demand oil. But what’s also true is that we can provide it more intelligently, more efficiently, more respectfully”.

It is in marked contrast to BP’s “Beyond Petroleum” campaign. Chevron seeks to explain and educate; BP tries to obfuscate. The problem with the “Beyond Petroleum” campaign for me is that it has always smacked of rebranding spin. Why? Because BP is, undeniably, an oil company. And a very big one at that. Like Chevron, BP is one of the world’s six oil majors, along with ExxonMobil, Royal Dutch Shell, ConocoPhillips and Total of France. Any attempt to deny that fact, or at least mask it, was bound to tempt fate in an industry in which major shit happens, as with the 2005 explosion at a BP refinery in Texas, and the Alaska oil pipeline leak a year later. Now, with oil gushing into the Gulf of Mexico unabated and officials giving no indication that the flow can be contained soon, BP is unfortunately up to its oily neck in an imminent environmental disaster. Any lingering credibility attached to its pretense of being an energy company that has gone beyond petroleum has been deep-sixed along with the Deepwater Horizon oil rig.

Hold the oil

The “Beyond Petroleum” campaign was born opportunistically out of BP’s merger with Amoco in 1998. Back then, BP was British Petroleum. After a brief but respectable period as BP Amoco, the company was recast in 2000 as plain BP. Replete with its elegant, Landor-designed sunburst logo, the intent was to send the message that the company was looking past oil and gas toward a benign, eco-friendly future of solar and renewable energy. John Browne, the CEO at the time, wanted to position BP as a broader energy company, not just an oil company, ahead of the looming issues of climate change, energy security and supply scarcity. Just as all oil companies are now attempting to do, he saw it as a way to “gain a seat at the table, a chance to influence future rules.” The slogan “Beyond Petroleum” was a clever if specious way of utilizing the initials ‘BP’ to emphasize they no longer stood for British Petroleum. “Better people, better products, big picture, beyond petroleum” went the alliterative mantra. But idea was pushed way beyond the bounds of its limits. BP’s ill-advised attempt to position itself beyond the petroleum sector on the basis of its laudable but marginal investments in renewables is rather like China claiming to be “Beyond Communism” because it now owns capitalist Hong Kong. It is a huge stretch of a small, albeit desirable, truth.

How can an oil company be ”Beyond Petroleum” without actively distancing itself from its core product? It’s a very hard sell when your logo is emblazoned on 10,000 gas stations in the US alone and the vast majority of your profits come from the black stuff.

BP has really tried to clean up its act over the last few years. How the company extricates itself from its current predicament will be proof enough of whether we are seeing a new BP. One thing it can do is finally move beyond “Beyond Petroleum” and talk about the business it is in with conviction, not what business it isn’t in.

In the introverted world of solar, differentiation amounts to little more incremental increases in panel efficiency and then shouting louder to be heard above crowd.

“We don’t need branding” is the familiar cry, “we need awareness and PR”.

It’s an industry ripe for consolidation, and the winners will be those companies that dominate categories with strong brands. The category that is the most susceptible to consolidation is the installer market. It is highly fragmented and the ripest for roll-up and brand domination. There are 750 installers in California alone, a market that comprises 80 percent of the  US solar market. The top 10 installers in California have 40 percent of the market. The rest are small  “mom and pops”. Most are former electricians with little marketing or business savvy.

The consolidation straws are in the wind. The larger solar integrators are buying small installation businesses in a trend that’s bound to continue. Companies such as groSolar, SolarCity, Real Goods Solar and Acro Energy are said to be the most active. They have the brand potential, they have the resources and they have seen the opportunity.

There’s an interesting look at these companies on the Sustainable Business website (www.sustainablebusiness.com/index.cfm/go/news.feature/id/1736)

How will the consolidation happen, and what will it look like?

It’s will not be just about size and market share. It will be about brand and the relationship with the customer. At the residential/commercial end of the solar spectrum it’s a fundamentally different kind of business model than at the industrial end. The residential market requires much more of a retail mindset and approach to the market in which the buying experience is paramount.  Currently, installers think about what they do – install panels. The physical “installation” of the product, the solar panel, is in fact a small piece of the equation for customers.

This is a typical hardware/manufacturing mindset that is all about the product. Manufacturers are typically terrible marketers and retailers. The retail mindset is all about the buyer relationship and experience. The manufacturing mindset is all about product and technology. The buyer relationship and experience was at the heart of the Saturn proposition and success. Disconnected from the low-grade experience of the  GM dealerships, Saturn saw a chance to reinvent the industry and build a brand around a complete buying and owning relationship. And it worked until GM decided it could not resist the urge to interfere.

If the solar industry continues to remain infatuated with product and technology, it is destined for commodization. It will be up to the retailers to add value and make a business of solar. The panel itself will be just an item in a catalog (the solar panel manufacturers are going to be commoditized unless they take branding more seriously).

People trust retailers. They trust Nordstrom, Target, Walmart and Best Buy. They are trusted brands, and it’s easy to buy from them; hey back-up their merchandize with an enjoyable experience and service support.

Is the retail analogy too much of a stretch for solar? Not at all. There is speculation that Walmart is considering selling Chinese-made electric vehicles. At $35,000 each, a vehicle is a comparable investment to a solar panel system.

It’s not about the product. It’s not about installation. It’s about the value delivered around the product – the relationship, which is essentially a marketing/brand approach.

As the solar industry matures, the importance of building a strong brand built on a compelling and differentiating value proposition becomes vital to success. Participants in this session will learn from a brand expert about the value of branding as it relates to the solar industry, what a brand is and why it is more than just PR, and how to brand your company successfully.

More details at: http://s36.a2zinc.net/clients/sepa/sepa2009/public/SpeakerDetails.aspx?FromPage=SpeakerList.aspx&ContactID=2578&IndexInList=18&SortMenu=103005