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Many programs found that market research can help identify, segment, and characterize audiences to understand how to prioritize them. A comprehensive evaluation of over 140 programs across the United States found that programs had greater success when they identified specific target populations within their larger target area, then tailored their outreach to the size of the target populations. Consider prioritizing audiences based on parameters such as demographics, values, housing type, fuel source, potential for savings, common problems with homes, property ownership structure, or program entry point (e.g., remodeling opportunities). For a starting point in your targeting efforts, look online for existing market segmentation data (e.g., municipal records, Zillow, a Nielsen segmentation system called PRIZM, U.S. Census Bureau).

In Their Own Words: Benefits of Market Segmentation

Doueck Video

Source: U.S. Department of Energy, 2012.

  • The ShopSmart with JEA program in Jacksonville, Florida, purchased Neilson PRIZM lifestyle segmentation data, which included demographic, consumer behavior, and geographic information, to identify, understand, and reach potential home energy upgrade customers. The data divided consumers into 66 demographically and behaviorally distinct segments. Through this market analysis, ShopSmart with JEA discovered that out of those segments, one of the most promising demographics to market its program offerings was older people without children. ShopSmart was able to use this information to market the program specifically to this demographic, as well as identify and target new demographics that had not been active in the program previously.
  • In Seattle, Washington, owners of oil-heated homes are ineligible for city-sponsored electric and gas utility rebates. Community Power Works purchased a mailing list from Data Marketing, Inc., that identified all owners of oil-heated homes in the city so the program could reach this previously untapped market. Given the lower efficiency and high cost of heating oil, the program recognized the energy and cost savings potential for these Seattle homeowners and engaged them in undertaking home energy upgrades by focusing outreach on the potential dollar savings that could be achieved by replacing old oil heaters. More than 700 Community Power Works customers who received the mailing then signed up for upgrades between April and August 2012. In the 11 months prior to the first mailing, only 20% of Community Power Works' upgrade projects involved oil-heated homes, and during the six months following the mailing, 50% of the homes were oil-heated. Among those homes, nearly 75% switched from oil heating to high-efficiency electric heating or high-efficiency electric heat pumps, as of mid-December 2012.
  • California utilities provided several examples of market segmentation that targeted energy efficiency programs. The report “Market Segmentation and Energy Efficiency Program Design” by the California Institute for Energy and Environment (CIEE) provides an overview of market segmentation purposes, examples, and methodologies. Another CIEE report, “Behavior Assumptions Underlying California Residential Sector Energy Efficiency Programs,” examines how to influence customer behavior and choice.

Target program messages to what customers want, not what the program does. Although residential energy efficiency programs deliver energy efficiency services, customers are more likely to respond to offers of comfort, cost savings, increased home value, health, community pride, or something else they need and value.

  • The RePower program in Washington state customized its marketing and outreach strategies to reach the environmentally conscious residents of Bainbridge Island, Washington, and Bremerton, Washington, a neighboring community with a lower income demographic. In Bainbridge, messaging focused on environmental stewardship, and an Island Energy Dashboard displayed real-time energy use in public spaces, such as local businesses and commuter ferries. Messaging geared toward Bremerton residents, meanwhile, emphasized job creation and reduced utility bills. Each location had its own community-specific website, color scheme, print advertising, online promotions, and case studies highlighting local energy champions to drive demand for residential energy upgrades.

In Their Own Words: Messaging to Motivate

Kraus Video

Source: U.S. Department of Energy, 2012.

  • In Florida, solar energy is in high demand, so the Solar and Energy Loan Fund (SELF) used this as a gateway to reach homeowners. Through SELF, homeowners could receive a loan for solar energy upgrades after meeting certain energy efficiency thresholds. For example, if a home energy assessment showed that the home's envelope was already sealed (or would be sealed as part of the work), a homeowner could qualify for a loan for solar panels offered by the program.