Recently, we announced our 2017 Environmental Champions to highlight the utilities that have developed effective approaches and struck a chord with their customers who like to hear about the dedication of their utility to the environment. These utilities are, in turn, rewarded with high Brand Trust and Customer Satisfaction scores.
The fact is, most utilities utilize environmental dedication as a key brand attribute, but only some utilities’ environmental positionings are effective. The difference between success and ineffectively tying your brand to environmental benefits can be found in fundamental marketing principles. Jerome McCarthy’s classic four P’s of marketing—Product, Price, Place and Promotion—hold true when it comes to effective environmental positioning. Utilizing his principles will allow you to build and maintain an effective and believable environmental brand for your utility.
Product offerings serve as the ultimate proof statement of environmental dedication. Any utility’s plan to position itself as an environmental champion has to start with a product portfolio assessment to gain an understanding of how each offering, or lack of offerings, impacts perceptions of the utility’s environmental dedication.
First, electric utilities that offer renewable energy have a built-in commodity value to environmentally focused customers. In our recent fielding, 78% of customers would prefer their utility use renewables as a fuel source. And natural gas was preferred by 65% of customers, so offering renewable energy also benefits natural gas utilities. Other consumption management offerings can be tied to green offerings and bill savings. Energy audits can be tied to a broad segment of utility customers, as are rate programs that reward customers for their at-home efforts. Offering online carbon footprint calculators is also an easy way to demonstrate interest in a cleaner environment. Finally, solar programs can be marketed to your environmentally focused customer segments. And solar programs aren’t just for electric utilities anymore—natural gas utility holding companies such as New Jersey Natural Gas’s parent company have developed solar offerings to customers in its trading area. This is in direct competition with PSE&G, which serves many of these customers with electricity. PSE&G, in turn, offers a loan program for customers to install solar.
Develop a product plan that inventories your offerings that can be tied to the environment, and enumerate the key features and benefits of those offerings. Also, develop marketing plans for programs you intend to launch in the near future using the same marketing principles.
While any utility’s environmental marketing plan starts with a product portfolio assessment, price is how the utility shows how much it values its dedication. Offering attractive net metering and green rates can be effective in certain markets. Touting a strong and growing renewable energy portfolio as well as natural gas investments to provide affordable clean energy to customers for the foreseeable future has broader appeal. Utilities should leverage the demand for renewable pricing options to gain as much environmental advantage as possible.
Demonstrating your support for the next generation of energy-efficient innovations is a great way to position yourself as a leader in helping customers lower both their carbon footprint and bill amounts. Our energy industry research shows that customers are open to practical, cost-effective environmental solutions. Customers will appreciate these solutions and reward you with higher brand value.
Do you have price programs that help the environment or does your fuel provide a more environmentally friendly alternative (such as natural gas)? Map your price programs and advantages to customer segments with the highest demand.
Most utilities’ customer base is broad but their resources to reach it are limited. So where you concentrate your efforts is key to your success. It is important to thoroughly understand your customer base so you can effectively target your efforts to your most environmentally focused customer segment. Likewise, it’s essential to track the effectiveness of your efforts by circling back with quality market research. Have your customers heard about or do they appreciate your environmental programs? The following chart shows that utility environmental understanding and support varies greatly by customer segment.
Your customer base is unlike any other utility’s. Every utility must take ownership of what its customers want from it and define its environmental role in the communities it serves.
None of your environmental strategies can bear fruit if you don’t promote them properly. Customers won’t give you credit for what they don’t know about you.
You need to know which channels are most likely to reach which customers, then target your message mix to key customer segments: home energy audits might resonate most effectively with new homeowners, time-based rate programs could be more attractive to those on fixed incomes, and solar programs and renewable investments could score big points with your greenest customers.
But utilities should think beyond what they traditionally view as products when designing their environmental offerings. In fact, the cause customers think their utility should support over all others is “clean environment.” Therefore, increasing awareness of your environmental programs and local support is crucial.
Many utilities have generated environmental goodwill by showcasing their stewardship programs. These efforts can be improving natural landscapes, supporting like-minded local environment organizations such as those dedicated to keeping local roadsides and parks clean, or focusing on clean fuels. And these efforts score points with a swath of customers.
Also, since we are talking marketing, branding environmental programs and adding promotional incentives to purchase can be very effective. For instance, SMUD offers Greenergy®, a branded program that allows its customers to add up to $6 every month to receive up to 100% renewable power. SMUD also promotes the program as Green-e Energy Certified. Meanwhile, MidAmerican Energy offers Renewable Advantage, a program that allows its customers to make one-time or ongoing donations to build renewable energy in their market. MidAm customers can sign up for the program through their monthly bill simply by checking a box. Using the bill for easy access to environmental programs can be an ongoing promotion of your dedication even if your customers don’t “check the box.” And, NYSEG offers Smart Savings Rewards, a smart WiFi thermostat program. This program provides customers an $85 bill credit for every thermostat they enroll in the program and $5 for every event they participate in. Customers using these programs have stronger customer engagement.
Promoting what you do is the most important part of your environmental marketing strategy. If customers aren’t aware of your environmental efforts, then a lot of great work will not be appreciated.
Creating effective environmental initiatives and then leveraging them to build brand trust isn’t easy—but it’s not too complicated either. Your customers are used to being appealed to in a specific way, so using time-proven marketing principles will resonate with them. Utilities should develop environmental strategies based upon the sound tactics utilized by marketers for the last half-century, and create cost-efficient, specific and supportable brand appeal. That’s the key to building a sustainable environmental brand.
We will be releasing our Most Trusted Utility Brands soon. Sign up for our webinar on The Value of Utility Brand Trust.