by Suzanne Shelton, Shelton Group
During the housing boom, consumers who bought new homes or upgraded existing havens were most concerned about features such as granite countertops, hardwood floors, bonus rooms, Viking stoves and refrigerators and steam showers. High seasonal efficiency energy ratio (SEER) ratings, increased levels of insulation, energy-efficient windows and lighting and Energy Star appliances were not driving forces in decision-making.
In the past when we surveyed consumers, they always chose aesthetic options over energy-efficient options when asked what they’d most like to do to fix up their homes. But in fall 2008, that changed. The Shelton Group’s Energy Pulse study found that for the first time, energy-efficient measures were most desired by consumers. Forget nicer carpeting or prettier cabinets, consumers now want to replace their windows or heating and air-conditioning units. Though windows may not be the most cost-effective, energy-efficient undertaking, consumers can feel drafts and assume that’s the place they’re losing energy. And they want to reign in their energy loss.
What Can We Take From This?
The economy is driving consumer thinking. Consumers would rather upgrade their homes with energy-saving measures than fix up their kitchens or bathrooms. This has nothing to do with consumers’ concerns about tree frogs in rain forests or polar bears in the Arctic. Thanks to the recession, they are worried about another type of green–the money in their wallets.
This is not a clear return-on-investment (ROI) issue. Emotional drivers are influencing consumers. In this economy, saving money is about feeling in control and gaining peace. The trick to marketing energy-efficient products is to convince consumers they’ll feel more control and peace by parting with money they’re scared to spend than they would by hanging on to it. It’s tricky, but not impossible. Our data shows they’re more open than ever to making that leap if they understand what the ROI is. The ROI delivers emotional security.
The Shelton Group recently completed a study, Utility Pulse 2009, to better understand why consumers do or do not participate in utility-sponsored energy efficiency (EE) programs and what utilities can do to spur participation.
The results indicate that consumers know less than you might hope about their energy consumption. Despite all of the attention on the environment, consumers are not well-versed on the best ways to save energy. For example, more than 60 percent do not think our society uses more electricity today than it did five years ago. Yet according to the Department of Energy, between 2002 and 2007, the nation’s electricity consumption increased 10 percent. More than 70 percent of those surveyed think their homes are efficient. More than 70 percent of the U.S. population lives in homes that are more than 20 years old, which means they’re likely not efficient.
What Is a Utility Company to Do?
Overall, Utility Pulse found that consumers show an increased propensity to participate in energy-efficient activities and buy energy-efficient products when they hear specific information about how they can immediately reduce their monthly bills or get specific rebates. Utility Pulse also found that significant public relations and brand perception benefits exist in demand-side management programs. Consumers like to know that their utilities are trying to help them save money.
Most utilities underestimate the value of these programs for brand-building and run them separate from their overall marketing initiatives. EE programs are important and go over well with consumers if positioned correctly and communicated well. For example, almost 75 percent of consumers think it is important for electric or natural gas utilities to offer home energy audits, information and rebates on products to improve a home’s EE and reduce consumers’ energy bills. Of equal importance is that 70 percent of consumers say it would make them feel a little to a lot better about their utilities if they offered all of these services. So there is a dual benefit for utilities that offer–and publicize–these programs. Utilities will see reductions in consumption, and consumers will like them more.
Finally, the study found that a strong potential for rebate programs focused on energy-efficient products exists. Even in this tough economy, if utilities provide the information consumers need to make informed purchasing decisions and provide rebates to help reduce their out-of-pocket expense, they will participate. Consumers need to know that an efficient water heater costs a little more at purchase, but it pays a dividend every month–they are essentially making money on the deal.
In the next 10 years, utility companies face a 17 percent increase in demand, which they will have a hard time meeting if consumers aren’t engaged. Thus, a utility’s job is to find ways to reduce demand–which can be done by convincing consumers that they will feel more in control and attain more peace by spending a little more up front for energy-efficient appliances or new insulation.
If more consumers participate, U.S. utilities will be able to mitigate growing demand. And consumers will feel a lot better about themselves and their utilities.
Suzanne Shelton is CEO of the Shelton Group, an advertising agency that motivates mainstream consumers to make sustainable choices.