Utilities seek magic formula for promoting ancillary products

ATLANTA, Jan. 14, 2003 — While utilities primarily rely on traditional, “utility-based” advertising avenues like bill inserts and company newsletters when it comes to promoting non-commodity products and services, Chartwell research has determined that utilities which are successful in selling non-energy-related products and services use less traditional promotional strategies such as print ads, web promotions and telemarketing.

Chartwell researchers surveyed executives at 50 utilities about the strategies they use for advertising mass market products and services, and 50 utilities about the avenues they use for promoting non-commodity offerings for commercial and industrial (C&I) customers.

The findings are detailed in a new Chartwell report, Advertising and Promoting Ancillary Products & Services in the Utility Industry. The 35-page report also includes information based on lengthy interviews with more than a dozen utility executives regarding their product promotion strategies, market research, and the structure of their marketing departments; as well as two in-depth case studies on successful utility product promotional programs.

According to the Chartwell report, marketing budgets for mass market products rose between 2001 and 2002, while budgets for promoting C&I offerings stayed about the same. While bill inserts continue to be the most popular way of promoting mass market products, IOUs operating in reregulated territories are the heaviest users of direct mail; and IOUs operating in still-regulated areas are the heaviest users of telemarketing. The use of telemarketing rose dramatically between Chartwell’s 2001 and 2002 surveys, primarily because it works, according to utility sources.

Utilities still rely on one-to-one marketing for selling products and services — such as green power, energy management consulting, and a variety of other offerings — to large C&I customers, the report says.

Advertising and Promoting Ancillary Products & Services in the Utility Industry, which is available from Chartwell, is part of The Chartwell New Products and Services Research Series, an ongoing information service that provides utility case studies; topical analysis and research centered around specific products or services in the utility and energy services marketplace; and a database of 70 utilities and the products and services they offer.

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