As energy costs rise and inflation continues to impact household budgets, a growing number of utility customers may qualify for low-income assistance programs. And while these customers share many of the same interests and needs as utilities’ general customer base — from an interest in smart home technology to reducing their energy usage — identifying and reaching customers in need of low-income bill assistance is often a challenge for utilities.

To connect with low-income customers, your energy utility needs to take a closer look at this unique audience and what barriers exist to reaching them.

Easing the Energy Burden for Low-Income Families

Low-income customers come from every walk of life, from rural communities to major metropolitan areas. They represent all ages and are made up of households with and without children. According to the American Council for an Energy-Efficiency Economy, low-income households spent an average of 8.1% of their income on energy bills. In contrast, the average U.S. customer spends just 2.3%.

While income is the major characteristic that differentiates this group from higher-income customers, demographics also come into play. The median energy burden is 43% higher for Black households, 45% higher for Native American households, and 20% higher for Hispanic households. These customers look to their energy provider for support and understanding, as well as utility low-income assistance programs to help ease their energy burden.

The reality is that barriers exist for many customers to take advantage of utility low-income assistance programs. One of the biggest hurdles is basic awareness of these programs. In fact, only 46% of these customers are familiar with utility assistance for low-income families to help with their monthly electric bill, according to the Smart Energy Consumer Collaborative’s (SECC) research. Awareness was even lower for energy efficiency programs. Only 33% knew about energy efficiency upgrades offered by their energy utility.

Connecting Customers to Relevant Low-Income Assistance Programs

For energy utilities, building awareness is key to driving interest and participation in financial assistance programs. This starts with utilizing various communications to connect low-income customers with relevant programs like low-income utility bill assistance and budget billing.

FirstEnergy took advantage of a segmented email campaign to reach low-income customers in multiple states, including Ohio, Pennsylvania, Maryland, West Virginia and New Jersey. Each message focused on a specific government assistance program that either helped to pay a portion of their energy bill or provided more consistent monthly bills.

The emails utilized personalization with the customer’s first name in either the headline or email salutation. Some of the programs were segmented based on homeowners or renters. This email campaign was successful in enrolling customers into utility low-income assistance programs, especially during the winter high bill season.

Sample email promoting low-income assistance programs to utilities LMI customers

National Grid wanted to get the word out to multiple communities about available financial assistance programs. The utility partnered with Questline Digital to produce a series of four educational webinars. To reach a wide range of customers, the webinars were produced with closed captioning and broadcast separately in Spanish and Portuguese. The webinars also included a video of an American Sign Language (ASL) interpreter.

“The webinar format lends itself to education because of the interactivity,” said Brian Lindamood, Vice President of Marketing and Content Strategy at Questline Digital in a recent American Public Power Association webinar. “You can answer customer questions live during the event, and you can also reach a lot of customers at the same time. For the four webinars in this series, almost 9,800 customers registered.”

Budget billing is another relevant program to promote to a low-income audience. Encourage customers to sign up for this program to keep their bills more consistent and avoid any surprises.

To relate to customers who face hardship with unexpected expenses like doctor visits and car repairs, Duquesne Light Company used the message, “Life is unpredictable. Your electric bill shouldn’t be.” The email campaign communicated the key benefits of Budget billing: consistent bills (even with high electric usage) and easier budgeting.

Example of email from utility communicating low-income customer assistance

Energy Efficiency Help for Low-Income Customers

In addition to offering payment options to make it easier to pay their monthly bill, low-income customers benefit from energy efficiency tips and advice. To ease the energy burden for both homeowners and renters, energy utilities are making energy efficiency programs a priority.

By improving energy efficiency, low-income customers can better manage energy use in their homes, which has a profound impact on their monthly bills. Energy providers should reach out to low-income customers with energy-saving products and utility low-income assistance programs focused on energy efficiency upgrades.

PSEG Long Island educated income-eligible customers about the utility’s Residential Energy Affordability Partnership (REAP) to help them lower costs through a free home energy assessment. Each email message included a testimonial from a PSEG Long Island customer who benefited from the REAP program.

“I’m a huge fan of testimonials,” Lindamood said. “If you can get a customer to share their real-life experience with a program that helped, that will really resonate with other customers. Testimonials add a lot of authenticity to your message.”

Sample of utilities using an email to promote low-income assistance programs

For energy utilities, another aspect of improving energy efficiency is a focus on multifamily building energy efficiency. According to the U.S. Department of Energy, more than 36% of people in the United States currently rent — and 60% of renters live in multifamily dwellings. That’s why an increasing number of utilities are creating programs to help property managers make energy efficiency retrofits.

One example is the City of Los Angeles Department of Water and Power’s Comprehensive Affordable Multifamily Retrofits Program (CAMR), which helps property owners of low-income multifamily buildings take advantage of energy savings opportunities. The municipal utility has 8,000 multifamily buildings currently in the pipeline. The program, launched in 2022, features three key approaches:

  • Energy efficiency opportunities
  • Building electrification (natural gas to electric)
  • Onsite solar through virtual net metering

“There’s a lot of opportunity, but it’s a challenging market, especially here in L.A. where we have a lot of old apartment buildings that have not been upgraded in a long time — if ever,” said David Jacot, Director of Efficiency Solutions at LADWP. “Many property owners are struggling and don’t have the ability to invest in their properties.”

Adoption of Smart Technologies for Low-Income Customers

Smart energy technologies, ENERGY STAR® appliances and rooftop solar panels can seem like luxuries to even the typical energy consumer. However, it’s not only higher-income customers who have an interest in them. Beyond communications about low-income utility bill assistance, energy utilities should provide educational resources about smart home technology.

When making purchasing decisions, a variety of drivers spark an interest in smart energy technologies for low-income customers. For example, the primary driver to purchase smart thermostats is saving money and making their home more comfortable. When purchasing smart appliances or smart lighting, low-income customers are motivated by the ease of use. For rooftop solar panels and community solar, a passion for helping the environment is a significant motivator.

Despite these drivers, smart energy adoption remains a challenge. According to SECC research, 28% of low-income customers believe that these smart energy technologies are not worth the effort. To encourage adoption, reinforce the fact that these technologies are beneficial for both saving money and maintaining comfort in their homes. It’s also important to provide insights on the positive impact on the energy grid and local community.

Reach Utility Low-Income Customers with a Relevant Message

As this research demonstrates, low-income customers share many of the same values and motivations as higher-income customers. To better connect with this audience, it’s vital to increase awareness about utility low-income assistance programs, energy efficiency programs and smart energy technologies.

With the right messaging, your energy utility can effectively reach this audience with relevant utility bill assistance and other resources and help them achieve their energy goals.

Learn how a payment assistance campaign from Questline Digital can proactively reach low-income customers with important program information.

Staying connected with energy utility customers is more important than ever. Utility marketers are constantly looking for effective ways to engage with their audience and deliver timely information about programs, services and energy-saving tips — all while cutting through the digital clutter that make it hard to attract customers’ attention.

Two popular marketing channels have emerged as top contenders in this space: SMS (Short Message Service) marketing vs. email marketing. While both channels share an ability to connect with customers efficiently, they differ in terms of reach, immediacy and user preferences.

Chart comparing the differences between sms marketing vs email marketing

The Differences Between SMS Marketing vs. Email Marketing

It’s essential for utilities to employ effective marketing strategies to reach their target audiences. While SMS marketing vs. email marketing have their own strengths and weaknesses, which one is more effective for utilities?

SMS marketing involves sending promotional messages directly to customers’ mobile phones. Research shows that the average SMS marketing campaign has a high open rate of 98%, making it an effective way to grab people’s attention quickly. Additionally, we know that 95% of text messages are read and responded to within three minutes of being received. SMS messages can also be tailored to specific audiences, allowing utilities to send personalized messages that are more likely to convert.

On the other hand, email marketing involves sending promotional emails directly to customers’ inboxes. It has a lower average open rate than SMS at only 20%, but offers more customization options such as dynamic information about customers, images and videos. Your utility is also more likely to have a greater number of customer emails than phone numbers.

When comparing SMS marketing vs. email marketing, it’s important to consider:

  • Customer preferences
  • Campaign data
  • Communication circumstances

Customer preferences

While the 98% open rate achieved by SMS marketing is impressive, it doesn’t tell a full story. In fact, according to Statista, between 2020 and 2021 almost 50% of survey respondents preferred receiving business communications through email, while only 25% of respondents preferred SMS.

When compared to email, one study says that 2023 will be the year we reach 4.37 billion email users worldwide — more than half of the global population. In 2023 alone, the number of emails sent and received is 347 billion, and that number is expected to reach 393 billion by 2026.

All of this data makes one thing clear: customer preferences are fluid.

There will always be customers who prefer email over SMS and vice versa. Choosing to use just one of these communication mediums isn’t recommended. Your customers want the option to choose which is best for them. 

Campaign data

SMS marketing campaigns and email marketing campaigns differ in the types of performance metrics that are available for evaluation.

SMS marketing campaigns typically yield information such as delivery rates, open rates, click-through rates (if using short links) and opt-out rates. Additionally, utilities can track the time it takes for customers to open and engage with messages, enabling them to optimize future campaigns based on user behavior patterns.

However, due to the character limitations of SMS messages and the absence of visual elements, the data collected through this channel may be less comprehensive compared to email marketing. Still, the high open rates and immediacy of SMS marketing make it an effective tool for utilities to communicate time-sensitive information and gauge customer responsiveness.

On the other hand, email marketing offers utilities a more extensive range of data points to analyze, thanks to its versatile format and richer content options. Besides open rates, click-through rates and conversion rates, email marketing allows utilities to track user engagement with specific elements within the email, such as images, videos and call-to-action buttons. This granular data helps utilities better understand their audience’s interests and preferences, allowing for more targeted and personalized communication.

Additionally, utilities can gather demographic information through email sign-up forms, enabling them to segment their audience and tailor content accordingly. While email marketing may not boast the immediacy of SMS, its ability to collect in-depth engagement data makes it an invaluable tool for fostering long-term customer relationships.

Communication circumstances

One element that you must consider in the SMS marketing vs. email marketing conversation is their different use cases. For example, email marketing can provide more personalization and creativity in its messages, connecting with customers not only through written text, but with design, too.

SMS marketing campaigns, on the other hand, focus on brevity and immediate impact. You must tell a customer exactly what they need to know in a matter of a few characters, using only text and short links.

When considering which circumstances to use SMS marketing vs. email marketing, one thing is important to maintain across both sectors: ask for permission.

Your utility wants to communicate essential information to customers, not annoy them. Therefore, it’s important to ask for permission from your customers before messaging them, especially when it comes to SMS marketing. Text messages are considered more personal, and sometimes more invasive, than emails, so getting permission is critical.

In fact, it’s not just a best practice — it’s the law. The Telephone Consumer Protection Act (TCPA) is the federal legislation that governs telemarketing, text messaging and the Do-Not-Call List. One of the rules of this legislation is that companies must receive prior written consent ahead of contacting customers with commercial or marketing offers.

Other elements to consider between SMS marketing vs. email marketing include:

  • Timing: Maintain a regular cadence with email marketing so customers know when they can expect communications from you. But only send SMS messages to customers on a limited basis — they don’t want to hear from you every day.
  • Content length: Share long-form content and messages via email. With SMS, brevity is critical; only send brief updates about programs or services.
  • Personalization: Input dynamic customer data into emails to deliver a truly personalized message. Realize that texts come across more personal no matter what, as they are in a more intimate setting.
  • Content types: Share general updates about programs or marketplace products via email. But share time-sensitive offers and updates via text, such as an exclusive coupon on an electric vehicle charger or a last-minute chance to register for an e-bill giveaway.
Example of mobile solutions text alerts for energy utility

Which Communications Channel is Best for Utility Customers?

While it’s great to understand the differences between SMS marketing vs. email marketing, it’s important to understand which ones are right for your utility and, more importantly, your utility’s customers.

SMS marketing campaign use cases:

  1. Outage notifications: SMS marketing campaigns are ideal for sending real-time power outage alerts, ensuring customers receive crucial information promptly, even when they don’t have internet access.
  2. Billing reminders: Utilities can send timely SMS reminders for upcoming bill payments, helping customers avoid late fees and keep track of their monthly payments.
  3. Emergency alerts: In case of urgent situations, such as gas leaks or severe weather warnings, SMS messages can quickly inform customers about the issue and any necessary actions to take.
  4. Energy-saving tips: Short, actionable tips can be sent via SMS to encourage customers to reduce their energy consumption, especially timely messages during seasonal high-bill situations.

Email marketing campaign use cases:

  1. Newsletters: Email marketing is perfect for distributing utility newsletters that contain detailed information about new programs, services, industry updates and energy-saving initiatives.
  2. Personalized recommendations: Based on customer data, utilities can send personalized emails suggesting relevant energy efficiency programs, rebate offers, or home improvement tips tailored to individual needs.
  3. Educational content: Utilities can leverage email marketing to share in-depth educational resources, such as energy efficiency advice, infographics and videos, helping customers make informed decisions about their energy usage.

BONUS: Customer surveys and feedback. Both SMS and email are effective channels for inviting customers to participate in surveys or provide feedback on your utility’s services to gather insights for continuous improvement. The type of service provided and the length of the survey will be deciding factors in which channel your utility should use to promote surveys.

When to Use Both SMS Marketing and Email Marketing

Although the impending death of email has been predicted for decades, and text messaging was once seen as an ephemeral chat tool for teens, the truth is that these two marketing capabilities are valuable and dependable ways to connect with customers. The best marketing strategy isn’t comparing SMS marketing vs. email marketing and picking one or the other, but rather determining how to best combine both marketing channels to improve customer communications.

Incorporating both an SMS marketing and email marketing strategy is critical to connecting with all customers. In doing so, your utility will maximize its ability to communicate about programs and services on the platforms that customers prefer.

Learn more about how Questline Digital can help your utility develop an engagement strategy to connect with customers on all channels.

Artificial intelligence (AI) is transforming various industries, including energy utilities, by offering innovative ways to improve the customer experience, enhance efficiency and streamline communications.

Our recent webinar, “Boost Customer Engagement with AI,” shared expert insights from Questline Digital’s Brian Lindamood, VP of Marketing and Content Strategy, and Zach Hardison, VP of Innovation. They explored how AI can be used tactfully by energy utilities to create personalized content, automate customer onboarding and support targeted communication campaigns for utility customers.

Lindamood reminded audience members that, “AI is a tool to improve our work, but still requires humans to operate and leverage results in a strategic way.”

Why We Care About AI Now

The growing interest in AI can be attributed to several factors that have made it more accessible, relatable, and widely adopted across industries, including energy utilities. These advancements have demystified AI and showcased its potential for enhancing efficiency, streamlining operations, and improving customer experiences.

Notably, AI is nothing new. Hardison shared that AI has been integrated for many years now, one example dating back to 2007 with Netflix’s ability to recommend “Top Picks for You” based on user preferences. He pointed out that the current buzz around AI stems from ChatGPT’s rise to fame in late 2022, thanks to its broad release and free public access.

“What this [public access] does is greatly remove the apprehension and barriers around AI,” says Hardison. “You can do things that are silly, you can do things that are professional. It reduces that apprehension. It reduces the fear factor that folks have around AI. And that’s why you’re suddenly seeing a lot more adoption because it has reduced the stigma and the barriers around AI.”

Benefits and AI Use Cases for Utilities

Hardison and Lindamood shared a variety of ways that AI can assist both outside and inside the energy utility industry.

“AI has been a boon in the fields of marketing and communications,” says Lindamood. “AI has the ability to analyze a vast amount of data, learn about customers’ preferences and behavior, and then help us personalize the customer experience to better meet their needs.”

One significant benefit of AI in the utility industry is its ability to share personalized content with customers based on their interests and engagement with previous communications. AI can be used to ensure that the right information reaches the right people at the right time, enhancing the overall customer experience.

Hardison shared an example of utilizing AI to create dynamic newsletters that send relevant content to customers based on their chosen preferences and interests. He shared that the importance of sending this customized content is to connect with customers in a way that shows your utility is listening.

Another valuable application of AI in the utility industry is its ability to identify characteristics that make customers eligible for programs like energy assistance, even if they are unaware of their eligibility. By using AI algorithms to analyze customer data, utility companies can proactively reach out to eligible customers and inform them about available aid.

One of the most immediate benefits of AI is its ability to scale up human efficiency. It excels at handling monotonous, repetitive, low-value tasks that would otherwise consume a significant number of human resources. By providing AI with boundaries and structure, it can operate within a defined scope, enhancing productivity without compromising on quality.

Limitations of AI for Utilities

It’s important to remember that artificial intelligence isn’t perfect. While AI offers numerous benefits to the energy utilities sector, it’s essential to recognize that the technology also has its limitations. By understanding these constraints, your utility can make informed decisions about AI implementation and manage expectations.

  1. Machines can’t understand user intent: AI can’t know for sure what a searcher wants; data will help improve algorithms but it will never be perfect
  2. AI doesn’t understand nuance: Computers see things in black and white and can’t offer perspectives from multiple lenses.
  3. AI-created content can be wrong, biased or misused: It needs to be fact-checked by humans.

Best Practices for Implementing AI in the Utility Industry

Chart showing best practices for using AI for utilities

To maximize the benefits of AI in the utility industry, it’s important to begin by following the data and using that information to guide your AI decisions. Consider the following template in analyzing the path for your AI strategy:

  1. Determine the use cases for AI and prioritize the data accordingly.
  2. Set clear business goals and metrics to measure success.
  3. Clean and explore data to see what opportunities rise to the surface and remove irrelevant data.
  4. Test and develop AI before putting it into production and maintain and review it regularly.
  5. Don’t get distracted by shiny new AI tools; be guided by business goals and objectives.

Remember, AI is a powerful tool that can greatly improve customer experiences and streamline operations, but it still requires human input and strategic thinking to be genuinely effective. You know your audience best. Use your human intelligence to guide the decision-making process and add AI when helpful to assist your strategy.

Want to use AI to improve customer engagement at your utility? Check out a demo of Questline Digital’s personalized newsletter solution.

Personalization can be a powerful force in helping energy providers build engaged relationships with customers. In fact, 55% of consumers believe that targeted communications create a more enjoyable experience.

By using data to personalize the customer experience, energy providers can achieve:

  • More effective marketing messages
  • Higher engagement rates
  • Increased program conversions

However, it’s important to remember privacy and security considerations when collecting and using data. Although customers expect relevant messages, they also expect their privacy to be respected and protected.

In Questline Digital’s webinar, “Data Privacy & Personalization,” our expert speakers, Brian Lindamood (Questline Digital) and Marianne Holohan (BlastPoint), shared insights into:

  • What is personalization
  • How personalization differs from segmentation
  • The benefits of personalization and segmentation for energy providers
  • Legal considerations and data privacy best practices
  • Examples of personalization in customer engagement campaigns

Personalization vs. Segmentation

“Personalization and segmentation work really well together,” Lindamood says. “Campaigns are most effective when you create segments based on the relevance of a program or the motivations those customers have, and then you personalize some piece of information for each customer within those segments.”

In the data privacy webinar, Lindamood explains that personalization is an engagement approach that treats customers as individuals. You do this by customizing the content, format or channel of messages for individual customers and you send relevant messages to customers based on:

  • Needs
  • Interests
  • Behaviors
  • Channel preferences

The benefits of personalization are expansive. Energy providers can achieve:

  • More effective marketing messages
  • Higher engagement rates
  • Increased program conversions
  • Build customer satisfaction through stronger digital relationships

Secure Data Analysis

“Many people think of segmentation as a one-and-done situation where you segment your customers broadly and then you use those segments over and over again to reach different objectives,” says Holohan. “However, we found that objective-driven segmentation is a much more effective personalization tool.”

Holohan shared BlastPoint’s process for secure data onboarding and analysis, including:

  • Review
  • Clean
  • Append
  • Analyze
  • Activate

She then described BlastPoint’s process. The first step is to collect and clean existing customer data. This is followed by enriching the data with external data sources and generating specific intelligence tied to the energy provider’s business goals. Last, the data and intelligence is put into action to achieve those objectives.  

Holohan also highlighted various third-party data information that can be used for personalization, such as

  • Residential demographics
  • Financial data
  • Media engagement
  • Psychographic data
Chart listing the third party data that can be used to personalize the customer experience for energy providers

Legal Considerations and Customer Expectations

When it comes to data privacy, there are a variety of legal considerations and processes for both incoming data and outgoing data.

Incoming data is defined as data that is purchased from third-party vendors. If the data is personally specific data, it’s important to ask the vendor to validate their permission to use the data. If it’s modeled or inferred data, it means the data is less accurate, so your organization shouldn’t rely too heavily on it.

Outgoing data is defined as sharing your customer data with third-party vendors. When doing this, Holohan suggests:

  • Limit the scope of the data being shared, especially if it includes personally identifiable information (PII)
  • Review vendors’ data security practices to ensure the legality (under GDPR) of transferring data.

In terms of information security, customers have high expectations for the privacy and security of their data, such as:

  • “Don’t leak my data”
  • “Don’t gather more than you need to know about me”
  • “The data you are gathering should benefit me, not annoy me”

To respect and meet these expectations, Holohan shared some best practices for using data in the data privacy webinar, including:

  • Validate third-party organizations’ security practices.
  • Use objective-driven, targeted segments for personalization instead of broad, multi-purpose segments.
  • Make data actionable with AI to ensure effective personalization practices.

Opportunities for Energy Providers to Personalize Communications

The data privacy webinar went beyond high-level definitions and shared real-world success stories. Lindamood and Holohan each shared examples for data privacy and personalization on various topics, including:

  • Energy efficiency
  • Electric vehicles
  • Payment assistance

For energy efficiency use-cases, Lindamood suggests:

  • Target users with relevant programs based on their interests
  • Segment based on past participation
  • Create messages that reflect their motivations or interests
  • Include personalized data, e.g. energy use
Examples of email marketing from energy provider using data personalization

He shared an example from a smart thermostat campaign. The utility used targeted messaging to segment and send emails to customers. One segmented message was about adopting a smart thermostat to help the environment, while the other pushed the benefits of saving money. By segmenting the messages, the utility found more success in its smart thermostat adoption program.

Holohan shared an example of BlastPoint’s process of working with a utility to increase engagement in its energy efficiency messaging. By acknowledging the utility’s goals of providing relevant programs and identifying income-eligible households, BlastPoint was able to gather and analyze data to assist in achieving these goals. They reviewed:

  • Internal residential data
  • Psychographic data
  • Demographic data

The data analysis led them to develop customer segments around energy efficiency, including income-eligible segments, and identify a target segment that had a high propensity to adopt efficiency measures. Using this technique and secure data access, the utility had 47% more income-eligible customers engaging in energy efficiency.

The Power of Data and Personalization

When done correctly, data-driven personalization can lead energy providers to achieving increased engagement and satisfaction among customers. The data privacy webinar highlighted the many impacts of data privacy and personalization.

Learn more about how Questline Digital can help your utility with targeted customer communications.

Personalized communications are no longer a nice-to-have when engaging with energy utility customers. In fact, 74% of customers feel frustrated when content is not relevant to their interests. For energy utilities, segmentation is critical to better understanding their customers and developing long-term relationships.

In Questline Digital’s webinar, “How to Segment and Personalize Utility Customer Communications,” our expert speakers Jason McGrade with the Smart Energy Consumer Collaborative (SECC) and Tony Todesco and Kristen Calvano with Con Edison shared insights on how they are using segmentation to improve their research and marketing efforts.

Understanding Utility Customers Through Segmentation

Segmentation is a vital component of SECC’s 2022 “Consumer Pulse” report, which focuses on consumer attitudes toward technology and energy. According to McGrade, this was a significant departure from previous reports that focused heavily on the environment. SECC is a nonprofit organization made up of about 150 utility partners working to better serve consumers.

“For this year’s report, we really wanted to look at the attitudes and values of utility customers around technology and engagement with their electric provider,” McGrade says. “We wanted to know where they stand in that customer journey, so we created five new segments focused on technology and electricity attitudes, moving away from an environmental focus.”

SECC commissioned Maru/Matchbox to answer the following questions:

  • What devices do consumers own and do they use them to save electricity?
  • How do they view their electricity provider?
  • What information do they want and how do they want to receive it?
  • Do consumers know what impacts their bill?
  • Do consumers know the impact their behaviors have on the grid?
  • How do these answers vary by consumer segment?

Maru/Matchbox conducted an online survey of 2,500 American households with energy decision-makers (ages 18 and older). The survey utilized Implicit Association Testing (IAT) to better understand what sentiments consumers unconsciously associate with their energy provider. Survey respondents were shown a series of statements and asked to either agree or disagree if it applied to them.

The survey responses created five new customer segments:

  • Simply Sustainable (28%): Customers who are environmentally conscious and open to new technology.
  • Connected Pragmatists (22%): Younger and tech-savvy, but not fully engaged with their energy provider.
  • Green Pioneers (21%): These customers are the sweet spot for utilities. They want to engage with their energy provider to maximize energy savings.
  • Trusting Traditionalists (17%): These customers have a high level of trust in their energy provider, but they are overwhelmed by technology.
  • Comfort Seekers (12%): These customers value comfort and convenience over everything else. They are typically older and middle-income.
Example of a customer segmentation strategy for energy utilities

SECC’s “Consumer Pulse” report provides insights and advice on the best ways for energy providers to reach these segments of unique customers. To increase trust, most consumers are looking for rebates or discounts and reduced outages. Overall, energy providers are viewed as the best source of information for all segments. The majority of consumers would like to see more energy-efficient products and offers from their provider, with email being the preferred channel, McGrade explains.

Key takeaways from SECC’s utility customer segmentation:

  • Green Pioneers are the ideal customer. They should be the target for new energy efficiency programs and offers.
  • The Simply Sustainable segment needs further education on technology, while Connected Pragmatists need to develop a sense of urgency toward energy efficiency to take action.
  • Trusting Traditionalists and Comfort Seekers are the most difficult groups to reach. Efforts should focus more on Trusting Traditionalists due to the high level of trust in their energy provider.

“In terms of the key segmentation, we really want energy utilities to take advantage of these marketing opportunities and better understand who their customers are,” McGrade says. “It’s not just about marketing to everyone in the same way. Utility customers have individual values that will motivate them to either gravitate toward or away from a particular marketing message.”

Uncovering New Utility Customer Segments

Con Edison, which serves 10 million people in New York City and Westchester County, took advantage of segmentation to deliver more relevant marketing communications. The utility has 3.5 million electric customers, 1.1 million gas customers and 1,600 steam customers.

According to Todesco, Con Edison finds great value in survey-based segmentation like SECC’s research. To complement survey findings, Con Edison began layering insights from third-party companies to create data-driven segments specific to their customer base.

The utility partnered with Experian Marketing Services to develop personas that uncovered new customer segments, which helped define the marketing strategy for a variety of programs, including heat pump incentives. “Our residential customer database has been appended with these fields so other departments can leverage this data in their analytic platforms as well,” Todesco says.

For example, Con Edison has an outreach team that frequently hosts events in local neighborhoods, Todesco explains. They now have a dashboard that allows them to look up zip code-level statistics when preparing for outreach events. The team can use data, such as language preference or the number of families in an area, to help fine-tune their approach.

Leveraging Data to Personalize Utility Communications

The customer analysis created personas for customers who own geothermal heat pumps and mini-split heat pumps. Through segmentation, the marketing team discovered that geothermal customers are more likely to own or be in the market for an electric vehicle. While geothermal customers aren’t necessarily innovators in tech adoption, they do have an above-average interest in EVs. With this research, the marketing team discovered a great cross-promotion opportunity between the two technologies.

Example of research conducted by a utility to create customer segments

“In marketing, we’re primarily using this data to analyze key customer segments, like electric vehicle drivers, solar adopters and low-income customers, and use the findings to refine our marketing strategy and act on opportunities,” Todesco says. “This data typically takes the form of personas characterizing specific users of technology. We always learn something new with personas.”

The insights for mini-split customers revealed that their homes are much more modest than geothermal homes. They are also older homes (built in 1942 on average) and don’t have the ductwork common in post-war construction, making mini-splits a great solution for heating and cooling. According to Todesco, the team was surprised to learn that over a quarter of mini-split installations were occurring in rental units. While not as costly as geothermal, it seemed unlikely that renters would take on such an expense.

Example of a customer persona created by a utility to personalize communications
Example of a persona used by a utility to personalize customer communications

“What we found through the data was that renters had lived in their units almost as long as homeowners,” Todesco says. “They are considered ‘settled renters’ who would be more invested in making their space comfortable. Targeting both long-term tenants and their landlords/property managers presented a new opportunity for us.”

Demographically, 44% of mini-split customers are Asian and Mandarin speaking compared to 13% of Con Edison’s overall customer base. They are mainly multigenerational family homes based in Brooklyn and Queens. The main takeaway for Con Edison’s marketing team is that the heat pump communications should be written in Mandarin to connect with this multicultural segment.

Impact of Personas on Marketing Campaigns

Prior to these findings, Con Edison was utilizing its existing email list of 23,000 oil heating customers to promote geothermal technology. According to Calvano, the messages were mainly based on cost savings. They started seeing a decline in readership despite retargeting efforts and creative refreshes.

When the research team conducted the persona data, the marketing team was able to gain new insights into the detailed demographics of the utility’s customers who were geothermal adopters. They used various filters, like home type, mosaic segments, land square footage and home value to create a new list of 13,200 gas customers. The new email campaign consisted of four total sends (to oil and gas customers). The oil customers received a cost savings message, while the new list of gas customers received an environmental benefits message. Both emails surpassed industry benchmarks:

Email to oil heating customers:

  • 1.59% CTR
  • 5.07% CTOR
  • 31.44% Open Rate

Email to gas heating customers:

  • 1.53% CTR
  • 5.84% CTOR
  • 26.27% Open Rate
Example of emails using customer personas to personalize utility communications

Due to the mini-split offering winding down from overperformance, the marketing team didn’t have a chance to utilize the Experian data in 2022. When they first launched the Clean Heating program in 2020, the utility was only targeting single-family homeowners to promote mini-splits. After learning that 26% of mini-split adopters are renters, Con Edison’s marketing team plans to expand targeting to renters once the program relaunches in 2023.

Segmentation is the Key to Personalize Utility Communications

For both SECC and Con Edison, segmentation has been vital to better understanding utility customers. According to McGrade, it’s best to let the data speak for itself and not make any assumptions along the way. As Con Edison’s experience demonstrates, segmentation has the power to create targeted program promotion campaigns that resonate with customers.

Learn how Questline Digital can create a segmentation strategy for your utility to better understand your customers and personalize communications.