Watching the World British Gas: Get into Goldfish

With David Knott from London [email protected] Gasoline retailers have compensated for falling profits from fuel sales by opening convenience stores at their service station sites. Now retail operations typically earn half their income from chocolate bars, canned drinks, barbecue charcoal, and so on. British Gas plc closed many of its gas appliance shops after government ended its U.K. monopoly, viewing retail operations as a bind. Now the company is increasingly losing customers as

Sept. 23, 1996

3 min read

Gasoline retailers have compensated for falling profits from fuel sales by opening convenience stores at their service station sites.

Now retail operations typically earn half their income from chocolate bars, canned drinks, barbecue charcoal, and so on.

British Gas plc closed many of its gas appliance shops after government ended its U.K. monopoly, viewing retail operations as a bind.

Now the company is increasingly losing customers as Britain's residential gas market is opened to competition from new suppliers.

But British Gas has hit on a unique way of diversifying to find new income. It has set up a consumer finance joint venture with HFC Bank plc, a subsidiary of U.S. finance firm Household International Inc.

The joint venture, called Goldbrand Development Ltd., has launched a new credit card in a bid to compete with high-profile cards issued by traditional banks.

Credit lure

The card is called Goldfish, and its novel enticement to consumers is that users can gain points for money spent with the card that can be credited against the user's gas bill, cutting a typical home's gas costs by as much as 20%.

A British Gas official said the loss of gas customers to new rivals forced the company to look for other areas where it can get a return on investments.

He said profits from the card will be split 50-50, but expectations of profit levels are not being disclosed.

"We've got ambitious plans to make it a mainstream credit card," the official said.

Meanwhile, British Gas is trying out some other "money industry" schemes. In Wales and Southwest England the company is testing the market for an insurance policy that pays utility bills after a job loss caused by an accidental injury.

In Southeast England, British Gas is offering, for payment, safety checks of gas equipment without the usual accompanying maintenance.

The official said the company plans other financial products and may also enter the electricity supply market when that opens to competition in 1998.

The Goldfish credit card is being launched with a 6 month, 10 million ($15 million) TV and press advertising campaign.

Central mystery

The press ads have the headline, "He who seeks to warm his home with a Goldfish is wise indeed."

The TV commercials feature an equally enlightening dialogue between a Mystic and a Seeker After Truth.

Mike Parsons, managing director of Goldbrand, rhetorically asked the burning question at the center of this whole story: "Why Goldfish for the name and branding of the credit card?"

"There are a number of reasons. We wanted to gain the attention of people who are concerned about the cost of running their home but don't want another boring product.

"Goldfish brings color into a gray market and stands for common sense values, combined with a sense of enjoying life. Also, cardholders will rapidly come to understand why in Eastern culture, the Goldfish symbolizes wealth and prosperity."

And there was innocent old me thinking British Gas was being refreshingly open in admitting it is fishing for gold.