Wednesday, February 17, 2010
Thursday, February 4, 2010
Guest Blog: Insights From Jon Drost on Utility Marketing
Jon Drost is a respected market research and segmentation expert within the utility industry. He also happens to be a great guy and someone I have had the pleasure of getting to know over the past several years. I appreciate his taking the time to guest blog with his informed perspectives about our shared industry and some of the issues communicators and marketers need to be looking at in 2010 and beyond.
When Matthew asked me to guest blog my first question was “How much are you paying me?” He called my bluff and said “Nevermind”. In all seriousness, I felt honored that he would be willing to post my thoughts about marketing within the Utility Industry. Hopefully, he doesn’t cancel my show after the pilot episode.
This forum provides me with the unique opportunity to get out from behind the Marketing Segmentation role that I breathe day in/day out and view Utility Marketing in a more Macro sense. My team works directly with Electric and Gas Utility marketing departments on a daily basis on behalf of a small/boutique market research firm.
There are many different views and opinions on how a Utility should attack their marketing strategy. Hopefully one aspect that everyone can agree on is that the Customer is King. When companies fail to recognize this, they tend to fail in general. For this reason, it is very important for Utilities to take a Consumer-Centric stance for their organization…after all it is the consumer who is filling out the customer satisfaction scores in the regulated market and switching providers in the de-regulated market.
For the purpose of this blog entry, I’m going to focus on a variety of marketing channels. (very briefly)
Social Media
Let’s start with the hottest topic out there in the marketing space. Social Media/Consumer Generated Content…or any other name associated with it. While Matt is much more of an expert on the use of Social Media techniques within the Utility industry regarding marketing, outage communications, and listening. I am able to add a little fuel to his fire regarding this topic. Globally, time spent on Social Media sites is up 82% year over year.
In the US, total minutes spent on social networking and blog sites increased 210% year over year.
So as you determine if engaging in Social Media is the right move for your organization, it is important to keep in mind that consumers are migrating to social sites at an alarming rate. Not only is it a great way to listen what is being said about your brand…it allows you a forum to control outgoing information. For instance, consumers tend to complain that their Utility does not do an adequate job with Environmental Stewardship or Community Involvement. Those of us in the industry know this may not necessarily be true but it is a perception of the consumer. While a lot of accomplishments are highlighted in the shareholders annual report, not a lot of your consumers are going to be reading that. Social Media can help you get the word out of your accomplishments as an organization and mainstream media does look to social media for topics and article ideas. A few Utilities are doing this with the aid of Twitter but there is tremendous room for growth in this area. I also want to highlight Sempra Energy’s micro-site www.sempraeveryday.com , this is a text book example on highlighting the topics mentioned above.
E-Mail as a marketing channel
This will be a quick topic. ABSOLUTELY
According to the 2009 Nielsen Energy Audit survey (32K+ respondents), which tracks the home energy usage behavior and attitudes of the US Consumer, approximately 30% of consumers PREFER to be contacted via email from their local utility regarding their programs/services. If your Utility does not have 30% coverage of email addresses in your data warehouse, you are certainly not alone. There are two ways to increase your coverage and I recommend doing them in succession.
First, I would use this as an opportunity to drive the adoption of Online Bill Payment, Paperless Billing, etc through segmentation and direct mail. Not only will you be enrolling a customer into a more convenient program for the them (and a more cost effective one for the utility), you’ll capture the email address for future campaigns and education regarding DSM, Renewable Energy, Community Involvement, Environmental Stewardship, Smart Grid, PHEV, etc.
Secondly, you can purchase an email address append from a variety of sources.
Why should you go in this in order? Guaranteed e-mail accuracy with the first step and then supplement with a Third-Party data set.
Direct Mail is not Dead, not even close
In the same 2009 Nielsen Energy Audit Survey state above, approximately 68% of consumers PREFER to be contact via Postal Mail from their local utility regarding programs and services. Since a direct mail campaign is not as cost effective as an e-mail campaign, it is crucial to employ sound segmentation and messaging tactics in order to have the most successful campaign possible. As an industry we should be well beyond “spray and pray” and “income targeting”…a lot of people might argue but I maintain the stance that “household income” is not the driving factor behind the decision criteria for today’s home energy consumer. It is definitely a solid variable in any segmentation schema but it will never the THE variable.
Tying it all together through Segmentation
These are just a few of the questions my team gets on a daily basis.
Which of my customers engage in social media? Who prefers to be contacted via certain marketing channels? I’m doing a direct mail campaign for a Critical Peak Pricing Program (you can substitute for any program here), who should I target? Which customers are beating us up on poor satisfaction scores? What areas in my service territory look like high potential for PHEV adoption? Where should we advertise on TV, Radio, etc? What messages should I use for the audience? Can this information help me in front of the PSC?
When a company makes the consumer the focal point of their organization, the answers to the above questions can be answered fairly easily. Market research and segmentation is the GPS of any organization, helping navigate the strategic direction.
For more information about any market research/media measurement from Nielsen. www.nielsen.com
When Matthew asked me to guest blog my first question was “How much are you paying me?” He called my bluff and said “Nevermind”. In all seriousness, I felt honored that he would be willing to post my thoughts about marketing within the Utility Industry. Hopefully, he doesn’t cancel my show after the pilot episode.
This forum provides me with the unique opportunity to get out from behind the Marketing Segmentation role that I breathe day in/day out and view Utility Marketing in a more Macro sense. My team works directly with Electric and Gas Utility marketing departments on a daily basis on behalf of a small/boutique market research firm.
There are many different views and opinions on how a Utility should attack their marketing strategy. Hopefully one aspect that everyone can agree on is that the Customer is King. When companies fail to recognize this, they tend to fail in general. For this reason, it is very important for Utilities to take a Consumer-Centric stance for their organization…after all it is the consumer who is filling out the customer satisfaction scores in the regulated market and switching providers in the de-regulated market.
For the purpose of this blog entry, I’m going to focus on a variety of marketing channels. (very briefly)
Social Media
Let’s start with the hottest topic out there in the marketing space. Social Media/Consumer Generated Content…or any other name associated with it. While Matt is much more of an expert on the use of Social Media techniques within the Utility industry regarding marketing, outage communications, and listening. I am able to add a little fuel to his fire regarding this topic. Globally, time spent on Social Media sites is up 82% year over year.
In the US, total minutes spent on social networking and blog sites increased 210% year over year.
So as you determine if engaging in Social Media is the right move for your organization, it is important to keep in mind that consumers are migrating to social sites at an alarming rate. Not only is it a great way to listen what is being said about your brand…it allows you a forum to control outgoing information. For instance, consumers tend to complain that their Utility does not do an adequate job with Environmental Stewardship or Community Involvement. Those of us in the industry know this may not necessarily be true but it is a perception of the consumer. While a lot of accomplishments are highlighted in the shareholders annual report, not a lot of your consumers are going to be reading that. Social Media can help you get the word out of your accomplishments as an organization and mainstream media does look to social media for topics and article ideas. A few Utilities are doing this with the aid of Twitter but there is tremendous room for growth in this area. I also want to highlight Sempra Energy’s micro-site www.sempraeveryday.com , this is a text book example on highlighting the topics mentioned above.
E-Mail as a marketing channel
This will be a quick topic. ABSOLUTELY
According to the 2009 Nielsen Energy Audit survey (32K+ respondents), which tracks the home energy usage behavior and attitudes of the US Consumer, approximately 30% of consumers PREFER to be contacted via email from their local utility regarding their programs/services. If your Utility does not have 30% coverage of email addresses in your data warehouse, you are certainly not alone. There are two ways to increase your coverage and I recommend doing them in succession.
First, I would use this as an opportunity to drive the adoption of Online Bill Payment, Paperless Billing, etc through segmentation and direct mail. Not only will you be enrolling a customer into a more convenient program for the them (and a more cost effective one for the utility), you’ll capture the email address for future campaigns and education regarding DSM, Renewable Energy, Community Involvement, Environmental Stewardship, Smart Grid, PHEV, etc.
Secondly, you can purchase an email address append from a variety of sources.
Why should you go in this in order? Guaranteed e-mail accuracy with the first step and then supplement with a Third-Party data set.
Direct Mail is not Dead, not even close
In the same 2009 Nielsen Energy Audit Survey state above, approximately 68% of consumers PREFER to be contact via Postal Mail from their local utility regarding programs and services. Since a direct mail campaign is not as cost effective as an e-mail campaign, it is crucial to employ sound segmentation and messaging tactics in order to have the most successful campaign possible. As an industry we should be well beyond “spray and pray” and “income targeting”…a lot of people might argue but I maintain the stance that “household income” is not the driving factor behind the decision criteria for today’s home energy consumer. It is definitely a solid variable in any segmentation schema but it will never the THE variable.
Tying it all together through Segmentation
These are just a few of the questions my team gets on a daily basis.
Which of my customers engage in social media? Who prefers to be contacted via certain marketing channels? I’m doing a direct mail campaign for a Critical Peak Pricing Program (you can substitute for any program here), who should I target? Which customers are beating us up on poor satisfaction scores? What areas in my service territory look like high potential for PHEV adoption? Where should we advertise on TV, Radio, etc? What messages should I use for the audience? Can this information help me in front of the PSC?
When a company makes the consumer the focal point of their organization, the answers to the above questions can be answered fairly easily. Market research and segmentation is the GPS of any organization, helping navigate the strategic direction.
For more information about any market research/media measurement from Nielsen. www.nielsen.com
Monday, February 1, 2010
What Utilities Should NOT Do In 2010!
2009 was filled with a lot of bad choices. Below are suggestions for making 2010 a little better, based on some of the insanity I saw last year.
- If you are thinking about giving out big bonuses...don't.
- Thinking about increasing your CEO's or exec pay? Don't do that either.
- Corporate jets are out. Take normal planes, like the rest of us.
- Don't provide money saving CFLs to your customers and then charge them heavily for it. 3 for 0 last year. Don't think you are any different.
- Don't dismiss social media as the "silly Twitter and Facebook stuff that kids do"...information vacuums continue to blind side organizations in these days of Web 2.0.
- Smart meter deployment can be wrecked by a poor communications plan. Don't assume cool technology speaks for itself. Be communication ready before, during and after your deployment. Perception is king and Smart Grid has gotten a lot of taxpayer money and a lot of unrealistic hype, which makes for a potentially volatile environment to work in. Look for a backlash in 2010 - 2011.
- In difficult situations, being opaque and obtuse is no longer a viable strategy. "Silly Matt...what do you know of such corporate operational things?" What I do know is that there is bloody trail of politician, athlete, celebrity and corporate reputation carcasses littering the 2009 landscape. People expect big companies be slimy, so surprise them by explaining what is going on, how it impacts them, how it impacts you, what you are doing about, why you care, and how people can provide feedback that you will listen to.
Is anyone else tired of seeing big baseball players cry as they admit to doing things they didn't know they were doing, but now realize that what they did was wrong, even though they didn't know they knew it was wrong at the time when they were knowingly doing it...but haven't actually admitted to doing anything at all. BAH!!!
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