CLOSE-UP: NEWSMAKER - NICK SMITH. Can British Gas escape its cumbersome image?

Nick Smith's appointment of CHI reflects British Gas' ambition, Glen Mutel says.

Nick Smith is a very busy man. And, as British Gas' director of marketing and strategy, he has just overseen the appointment of London's busiest agency, Clemmow Hornby Inge. It's something of a miracle that the two ever found time to meet.

But meet they did, and Smith was impressed. So much so that British Gas was willing to choose the two-year-old outfit ahead of BMP DDB, its agency of 12 years, and the service brand veterans WCRS and M&C Saatchi, who were also invited to pitch for the account.

When one considers the pitch success rate of CHI, the win should have surprised no-one. Yet British Gas is an established brand with a big reputation, a rich advertising tradition and a lot of money to spend. If ever there was an advertiser to shun the agencies of the moment in favour of a "safe pair of hands", surely this was the one?

The appointment reflects the extent of British Gas' ambition. Despite the restrictions of its name, the company is looking to establish itself in new territory, and aims to convince customers that it can not only supply their gas needs but also their electricity, telephone, plumbing and security.

It has already had success in this field. Earlier this year it overtook Powergen to become the country's largest supplier of electricity.

However, the telecoms market will be a far harder one to conquer. A recent BMP-created British Gas ad, which showed confused customers using a phone as if it were a naked flame, highlights just how difficult it will be to convince people of the company's credentials as a phone supplier.

So how will this issue be tackled? The CHI planning partner, Simon Clemmow, explains one option: "British Gas has the tremendous asset of trusted people in vans. This is a good thing to leverage. There aren't many organisations that people trust enough to let into their house. This presents us with a great marketing opportunity."

Much of the coverage given to the British Gas review has focused upon the company's telecoms offering. This is largely thanks to the perceived conflict presented by CHI's other clients BT and The Carphone Warehouse.

CHI was able to assure British Gas that it would not be involved in the marketing of either BT's or Carphone's fixed-line telephony services.

Still, agencies have been disqualified from pitches for less.

"We'd be far more concerned about sharing an agency with someone who has the same strategy as us," Smith says. "You can copy products but not brands and service delivery."

Smith is adamant that British Gas' telephony service is just part of a bigger story. Yes, the company is moving into new markets. But what's more important is its adherence to its parent company Centrica's customer-driven ethos. This will be the crucial factor if it's to shake off its old image as a cumbersome monopoly.

"Our objective is not to be a multi-utility provider," he says. "Our objective is to be a brand leader in the provision of services for the home. If we were going to launch a standalone telecoms service, there'd be no point doing it under the British Gas name. It's more about developing relationships and providing benefits to existing customers."

The importance of customer relationships is a subject that Smith returns to often. Although he has an above-the-line agency background, having worked at both Bates Dorland and Gold Greenlees Trott, Smith was awakened to the potential of data management and direct marketing during his time as a client with both Sekonda and Alliance & Leicester.

Now he oversees one of the most integrated rosters around, one that sees the direct marketing giants EHS Brann and WWAV Rapp Collins enjoying equal status with CHI and the media agency Carat.

Smith's multi-discipline experience has fostered in him and his department a need for more than just good ads from his creative agency. CHI was chosen because it came up with the elusive "big idea", one that could be applied to internal and customer-facing processes as well as brand communications.

With a new agency on board, and a below-the-line review imminent, part of the marketing challenge for British Gas is to update its image.

The company has something of a mixed profile. On the one hand, it's a trusted brand, one synonymous with product expertise. On the other, it has an unwanted reputation for being both expensive and ruthless. This reputation hasn't been helped by the frequent censuring the company has received recently from the industry watchdog Energywatch. Its list of misdemeanours includes inaccurate and late billing, blocking customers from changing to rival suppliers and increasing retail prices.

Smith is aware of the image problems his company has. "We are looking to remove the bad experiences people have had of the brand, and we're using data and customer relationship management to do this," he says.

"But in regards to pricing, the difference between us and our competitors is not that great. We are more expensive when it comes to servicing, but we have a premium product that can justify that."

Clemmow agrees that the company does have some "image baggage". But he is adamant that his agency is representing a dynamic company that has come a long way since its "Gas Board" days.

"Their move from Staines to Heathrow was a big part of this. The physical move announced a commitment to change, and this has percolated through to the whole organisation," he says.