SMB Segmentation: Trends and Opportunities for Utilities

Transcription

1 SMB Segmentation: Trends and Opportunities for Utilities March 9,

2 Most utilities segment business customers Demographic profile Geographic variables 75% 81% Energy usage 63% Behavioral variables Transactional RFM Psychographic profile 44% 41% 47% Ethnographic variables 22% We are not currently using segmentation 9% Source: Chartwell 2017 Communications Survey, n=43

3 Why segmentation matters Geographic Behavioral Demographic Psychographic Allows utilities to precisely reach customers with specific needs and wants Enables more effective use of resources, better strategic marketing decisions and expanded opportunities for growth Supports more personalized marketing which leads to greater customer satisfaction and loyalty

4 Our Industry Is Facing a Powerful Change Growth in consumption is being offset by green energy technologies Green Energy Regulator Energy Storage Distributed Generation Smart Homes New Entrants Increased profitability must come from reduced cost to serve and new products and services. Energy Efficiency

5 SMB defined Small business 100 or fewer employees Annual revenue less than $50 million Mid-sized business employees Annual revenue more than $50 million but less than $1 billion Most utilities have unique metrics to define mid-sized business On average, mid-sized businesses generate annual electric revenues between $35,000 and $200,000 and have demand levels between 20 kw and 100 kw

6 Small Business Midsize Business Key Accounts Many utilities differentiate SMB customers Q: Does your utility differentiate among the following types of business customers? Yes 93% No Yes No Yes No 7% 39% 41% 61% 59% 47% of utilities that are not currently segmenting mid-size business customers plan on doing so in the next 12 months Source: Chartwell 2017 Business Customer Care Survey, n= 46

7 Common segmentation criteria 90% 80% 70% 60% 50% Most utilities use usage, peak demand and revenue to segment business customers 81% 74% 72% 67% 68% 57% 48% 48% 50% 40% 30% 20% 10% 0% Small business customers Mid-size business customers Key accounts Usage Peak demand Revenue Source: Chartwell 2017 Business Customer Care Survey, n= 46

8 Commercial segmentation Tier 1 Data Tier 2 Data Contact name, title, gender Telephone number Sales, local or total Ultimate ID/Name/Number Fax number Fortune 1000 (Y/N & rank) Parent ID/Name Primary/secondary SIC or NAICS Advertisement size Street, city, state Location type Home-based business Secondary address Total employees Zip Code + 4 Census tract & block group Match flag

9 Unique challenges Cost-effective engagement Segment diversity and disparity Reaching decision makers Handling volume of requests Lack of flexibility Creating a customized experience

10 Utilities have found no particularly effective marketing tool when communicating with mid-size business customers Q: How effective (with 1 being not effective at all and 5 being extremely effective) are the following marketing tools your company is using for outreach to mid-size business customers? Source: Chartwell 2017 Business Customer Care Survey, n= 46

11 Opportunities: Billing, payment options Q: Please indicate how satisfied your mid-size business customers are with the following: Energy Efficiency Rebates Outage Alerts Energy Efficiency Incentives Online Energy Management Tools Budget Billing Energy Audits Bill Alerts Auto Pay Paperless Billing Summary Billing Online Payments 48% 74% 71% 67% 65% 60% 91% 88% 84% 82% 81% Source: Chartwell 2017 Business Customer Care Survey, n= 46

12 Salt River Project: Business customers Business Customer Outage Experience ratings were on a decline Focus: Business Customer Segments Strategic Large Mid-size 69% 77% 51% % 9/10 RATINGS 37% 38% Highest revenue/kwh High load factor High PQR sensitive Frequent faceto-face relationship High revenue/kwh Med-High load factor Med-High PQR sensitive Regular face-toface relationship Med revenue/kwh Med load factor Med PQR sensitive Occasional face-to-face relationship FY15 Q1/Q2 FY15 Q3/Q4 FY16 Q1/Q2 FY16 Q3/Q4 FY17 Q1/Q2 Source: OMTS Business FY17 Q3 Study

13 Southern California Edison: Outage Schools Informative seminars provide customers with information regarding SCE s communication processes for both maintenance and repair outages with a focus seasonal, economic and infrastructure challenges Sessions 578 OUTAGE SCHOOL GROWTH Sessions Sessions (YTD) 585 Internal Customers External Customers

14 Tucson Electric Power: Driving performance Segmentation goal: Uncover new markets of opportunity for new and existing products Target our most profitable customers and high-potential prospects Value proposition: Treat people differently Identify potential new energy consumer segments

15 Toronto Hydro: Trusted energy advisers

16 Pacific Gas & Electric PG&E utilized data analytics to identify small businesses with usage and demand patterns that possess the potential to benefit from behavioral energy usage changes as well as upgrades to more costeffective technologies.

17 Utilities new initiatives for 2018 and beyond Better communications for maintenance outages Website upgrade (single login, better analysis tools, self-service options) Marketing self-service options Business advisory panel meetings Increased segmentation and triggered outreach Pilot program, person-to-person outreach Changing account assignments to focus more on frequency/complexity of transactions Using success stories in different business segments such as farming, health-care facilities, manufacturing and the food industry to help draw similar type businesses to participate Source: Chartwell 2017 Business Customer Care Survey, n= 46

18 Thank you! Chartwell provides timely insights, benchmarks, best practices and opportunities to collaborate that save utilities time and money, increase customer engagement and improve customer satisfaction. Scott Johnson Vice President ext. 226