Can You Help These Harried Customers?
Residential customers and small business owners are telling us they`re pressed for time, and too harried to deal with separate telecommunications and energy services. A clearly defined market segment is emerging–consisting of people who are busy, technologically astute, and seeking increased simplicity and control in their lives. Are you prepared to serve these consumers, or will you yield the market to new entrants?
A rigorous market study conducted last fall by RKS shows that residents and small businesses are increasingly interested in simplified “bundles” of energy and communications products and services. In fact, these customers say they want one-stop shopping. They are increasingly receptive to the idea of a single bill for a bundle of heating, air conditioning, home-appliance repair and electrician services, combined with energy. If these customers could receive local- and long-distance telephone service and cable or satellite television as well, so much the better.
Likewise, small business owners would opt for a package that includes power quality consulting, energy audits, telecommunications and Internet access along with energy. And because they are inclined to invest their dollars locally, business customers told RKS they would look first to their current energy supplier for these new offerings.
Survey results also showed that many products and services naturally come together as logical packages in the customer`s mind. For example, residents are intrigued with a “technology” bundle containing such products as “smart” thermostats, whole house surge protection, home automation and control devices, ground fault equipment and home security. People most interested in this package are affluent, highly educated and live in the suburbs. These findings don`t point to a new mass market, however. Nearly half of the residential customers surveyed maintain very positive feelings about their energy and long-distance providers. They have stayed put despite growing competition and choice, and, most significantly, they evidence little interest in buying additional products and services.
Instead, the brightest prospects are among people who are least satisfied with their present energy supplier. Survey data points to younger, less affluent and predominately female customers, individuals who are computer-savvy, short of time and eager for simplified sources of service on a single bill.
But these customers are more restless, skeptical of large organizations and less loyal. Small business owners have many of the same characteristics, along with a focus on cutting costs and a concern for the reputation of the provider. Based on these findings, what`s an interested supplier to do? I would suggest the following:
One size won`t fit all. Unlike traditional mass marketing, winning over small business owners and the interested pockets of residential customers will require highly targeted niche marketing techniques.
Consider strategic alliances and partnerships. Some of the most powerful combinations, which surfaced in the conjoint analysis phase of RKS` research, matched the local energy supplier with a national brand, such as AT&T, with MCI and Sprint trailing behind. Likewise, consumers saw increased value in services from highly regarded contractors, backed by the energy supplier`s brand.
Exploit the hometown advantage. Survey results show that residents and small businesses alike are inclined to turn first to their local energy supplier for their package of products and services. This is an important attribute for the incumbent supplier–and represents a significant barrier to market entry for a competitor.
The whole has to be less than the sum of the parts. In all cases, residential and small business customers expect that any package of products and services will be offered at a discount.
RKS` findings demonstrate that people are ready to consider the purchase of simplified bundles of products and services from a single source–preferably the local energy supplier. The challenge now for energy providers is to make the transition from traditional mass marketing to highly focused target marketing to the interested new segments. If this interest isn`t tapped, incumbent suppliers risk losing these promising customers to new entrants. Isn`t it time to start assembling, pricing and testing your product and service packages? n