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Data analysts look at customer segmentation info

Segmentation: A Critical Tool for Energy Utility Communications

Segmentation is one of the best tools at your energy utility’s disposal to maximize the impact of its communications. By splitting your target audience into multiple segments, your message can be personalized to each of your customers, resulting in increased engagement with your utility’s brand, content and program promotions.

With market segmentation, you can target groups of consumers with personalized messages rather than your entire list with a generic message. Both residential and business customers pay attention to messages that address their unique needs, wants and interests. That’s why a personalized message increases the effectiveness of your marketing campaigns.

Quick tips for segmenting your audience

Only segment when necessary or relevant. It’s easy to create many conditions, especially when segmenting a large population. Your audience segments should be large and distinct enough to justify creating a separate marketing campaign or content calendar. You should also be able to identify the specific needs of your intended segments. If you don’t know the unique needs of customers interested in clean energy, for example, this segment won’t be of much use.

Strategize for long-term segments. Some segments are based on fixed conditions, and your strategy should involve a long-term supply of content to address each group. For example, you should have ongoing content directed to specific industry segments. Think of restaurants versus manufacturing. These industries have very different needs and their managers are looking for very different content about their energy use.

In a six-month pilot program to test the performance of a small business newsletter, the industry-segmented newsletter performed 12% better in customer engagement (CTOR) than the control (unsegmented) newsletter.

Look for shorter-term customer interests. Other audience segments may be built around a transition point. For example, residential customers can be segmented into homeowners and renters. Although not as permanent as industry segments, it’s a useful option for utilities to explore. You can also dig deeper and segment customers based on customer interests (i.e. electric vehicles or solar power) and behaviors (i.e. signing up for a utility program).

Test your segment. You’ve created a segment based on a group of conditions, but you’re not sure if this segment is effective. You can split the segment into two groups, one being a control group. Test your campaign with one group and send a generic message to the control group. Is your segmented group engaging with your message more than your control group? If so, you have a good segment.

To learn more about how your energy utility can use segmentation to improve communications, download Questline’s digital marketing tip sheet, “Best Practices: Segmentation.”