PRESIDENT'S POST
May 23, 2023
President's Posts
Topics
Research, Segmentation, Customer Engagement
When we updated our consumer segmentation framework last summer, we focused primarily on two areas – interest in home electricity usage (and how this usage impacts the grid) and comfort with and use of technology – as a means to assess potential consumer engagement in utility programs and services.
This analysis resulted in five consumer segments, ranging from the Green Pioneers, who are considered the “sweet spot” for innovative utility offerings, to the Comfort Seekers, the 12 percent of the U.S. population who are primarily interested in their personal comfort and are unlikely to engage in energy-saving programs and services.
Between these two ends of the spectrum are three other segments, including the Simply Sustainable, an older segment that has strong environmental values but not much interest in technology, and the Connected Pragmatists, a younger segment of consumers that has a strong interest in both technology and the environment – despite their reticence to participate in utility programs.
Among this middle ground of American consumers, there’s also the Trusting Traditionalists, a segment that is often overwhelmed by technology and isn’t strongly motivated by the environmental benefits of utility programs and services, especially compared with the Simply Sustainable and Green Pioneers.
Like the Simply Sustainable, the Trusting Traditionalists – 17 percent of the general population – tend to be older and are not likely to currently be using smart home devices for energy-related purposes. Further, only three percent strongly agree that they “enjoy learning about new technologies [they] can use at home” – by far the lowest of any of the five segments.
That said, they have several attributes that make them a good target for electricity providers to engage. Notably, they are the most likely to trust their electricity providers and the most likely to be satisfied with their service. They’re also looking for ways to reduce their electricity bills at a similar level to the mean for all five segments, despite having taken very few steps already.
Electricity providers have a great opportunity to harness these consumers’ trust, satisfaction and desire for lower bills and help them take easy, proven actions to lower their electricity bills. For example, less than half have installed energy-efficient lighting – less than even the disengaged Comfort Seekers (51 percent) – which can be a great entry to other upgrades.
Surprisingly, though, the Trusting Traditionalists are interested in some programs at levels similar to more engaged segments. They’re interested in peak-time rebate programs at about the same rate as the Green Pioneers, and one-third are very interested in conducting an energy audit.
However, when we look at barriers, upfront costs are a considerable barrier. Given their trust of their utilities, these consumers may respond to direct outreach regarding in-person energy assessments from their utility, especially if upgrades are made easy for them and if rebates are available to help with the upfront costs.
Upcoming research around consumer interest in and support for renewable energy also reveals some notable findings that illuminate the Trusting Traditionalists. When made aware of the clean energy goals set by the government and their utilities, consumers overall are very supportive. For example, when informed of the federal government’s goal of 80 percent renewable energy generation by 2030, 72 percent are in favor of achieving the goal.
However, there is significant variation among the segments. Less than one-third (27 percent) of Comfort Seekers believe that this target is either very or somewhat important. Yet, for the Trusting Traditionalists, who are not known for their environmental values, this number is 71 percent – roughly the mean across the five segments. And 44 percent of the Trusting Traditionalists believe it should be a high priority for their electricity provider to contribute to this goal (15 percent for the Comfort Seekers and 44 percent for the Connected Pragmatists, respectively).
Furthermore, respondents were asked whether they would be willing to pay more on their monthly electric bills in exchange for more electricity coming from renewable sources, and again, there is a significant gap between the Comfort Seekers and the other four segments. Thirty-six percent of Trusting Traditionalists are willing to pay $5 more, compared with just 10 percent of Comfort Seekers and 44 percent of the Simply Sustainable segment.
While the Trusting Traditionalists may not be your Green Pioneers who are willing to lead the way and participate in innovative, tech-based pilot programs, they are also far from the Comfort Seekers in their values and are an important segment to consider to maximize engagement among residential customers. As the research shows, their high level of trust means they will participate if programs are designed to overcome their financial and technological barriers.
To learn more about SECC’s five consumer segments and how to successfully engage them, read the “Segmentation in Action: Advancing the Customer Relationship” paper here.
About the President & CEO
Nathan Shannon
Smart Energy Consumer Collaborative President & CEO
I am the President & CEO of the Smart Energy Consumer Collaborative where I lead the organization's research, membership and policy initiatives. I came on as SECC's Deputy Director in early 2015, and in this role, I grew membership almost 40% to over 150 members. Along with my work on the Research and Policy committees, I lead member recruitment and engagement and routinely present SECC's research at major industry conferences and policy workshops. Before coming to SECC, I served as the Director of Operations and Major Gifts Officer at Athens Land Trust with a focus on policy and sustainability through my work with land conservation and carbon credits. I also gained extensive knowledge in the realm of non-profit development and capacity building.