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3 key findings to help utilities market successfully to small and medium-sized businesses

Posted by Randy Mitchell on February 5, 2015

The same questions are posed over and over at utilities and energy providers across the country. You can hear them in conference rooms, on status calls and in offices as energy marketers struggle with similar challenges.

“How can we get our small and medium business customers engaged?”

“Why haven’t they responded to our communications?”

“How can we connect with them on their terms?”

To determine actionable answers to these questions, it is imperative to recognize the marketplace challenges that utilities and energy providers face in this area. When marketing to small and medium-sized businesses, some common themes emerge.

Low involvement. Business decision makers are focused on their own operations and the day-to-day demands they face. Their time is always at a premium and energy management is not a priority for them. In short, it’s a low-involvement category for these individuals. This presents a major barrier for utility and energy marketing initiatives.

Cash flow concerns. Small and medium-sized businesses clearly recognize the necessity of maintaining their cash flow. Many decisions are determined based upon this priority. If an energy project or program is perceived as a potential disruption to cash flow, it is frequently disregarded.

Limited flexibility. Small and medium-sized businesses have very little flexibility to change their operations during peak operating hours. This can limit their interest and participation in programs such as energy efficiency.

Given these inherent barriers, utility and energy marketing needs to employ proven practices to engage small and medium business customers and motivate them to take action regarding energy-related programs. To learn what is working in the industry today, let’s examine the findings from a recent energy efficiency campaign by one of the nation’s leading utilities.
The campaign was targeted at the utility’s small and medium-sized business customers across a broad spectrum of industries. The primary goal was to engage business owners and managers in energy efficiency initiatives.

In order to make this happen, the utility needed to drive the target online to conduct a self-assessment of their current energy use and operations. The businesses could then leverage the individual findings they received to become more energy efficient and reduce operating costs.

As the energy efficiency campaign rolled out with multiple direct mail and email touch points, the utility was able to gain several important learnings about customer behavior and preferences. In particular, three key findings came to the forefront.

Driving Response in Utility and Energy Marketing Finding #1: Segmentation by industry drives engagement.
For a number of industries, campaign communications were more general in nature based upon the segmentation information that was available. However, one of the individual segments specifically targeted by the campaign was the restaurant and foodservice industry.

This segment received communications with industry-specific messaging and highly tailored recommendations based upon their unique energy needs and equipment use. As a result, the campaign was more grounded in the world of the target’s business, and the energy efficiency actions were more immediate and achievable. In addition, the recommendations came with associated costs, rebates and savings, which helped alleviate cash flow concerns.

Most important, this relevant approach worked extremely well. Response to the segmented communications was significantly higher than more general communications. In fact, the restaurant and foodservice industry communications performed approximately 50% better than more general business targets.

Finding #2: Frequency lifts response.
One of the important initiatives of the campaign was to educate small and medium business decision makers about their energy efficiency options. This was a practical strategy because business owners and managers needed to understand the benefits of making more efficient choices. If this approach was successful, it would allow the target to transform information into action.

Now here’s the catch. A single communication could not tell the entire story. For this reason, a series of informative emails was sent over the campaign. This series introduced energy efficiency resources, explained how the business could benefit and provided individual examples of energy efficiency initiatives and their associated savings and rebates.

The cumulative impact of the email series was impressive. In total, the five emails in the series lifted response by 330%. The frequency worked because business decision makers were educated and empowered by the information, so they engaged with the campaign.

Finding #3: Momentum matters.
Once business owners and managers were on board, the campaign still had a role to play. The utility wanted to keep these businesses active in energy efficiency efforts. But there was some doubt regarding the new enrollees’ likelihood to stay engaged.

After the businesses were on board, additional waves of email communications were sent. Overall, these emails had a significantly higher click-through rate than emails to non-enrollees.

As it turns out, newly enrolled businesses were 150% more likely to engage with follow-up communications. They had built up some energy efficiency momentum, and the campaign worked hard to ensure that this forward progress continued.

But the story certainly doesn’t end there.

Jacobs & Clevenger has many more valuable findings based on millions of offline and online marketing communication touch points with utility and energy customers.

Sign up for our free Optimizing Utility and Energy Communications webinar for the most effective best practices in utility and energy marketing, proven through 20 years of in-market testing and research.Discover the most effective best practices in utility and energy marketing. Optimizing Utility and Energy Communications. Register now.

Topics: Utility Industry

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