In Part 2 of our series Engaging Lower-Income Customers about Energy Efficiency, discover utilities’ go-to segment for boosting low-income enrollment in energy efficiency offers and meeting regulatory benchmarks.
If you missed Part 1, read it here!
New research from BlastPoint shows that a segment of lower-income customers–those who earn below 150% of the federal poverty line–are often the most willing adopters of utilities’ energy efficiency programs. This might seem counterintuitive, as these customers generally have fewer upfront funds to invest in things like smart thermostats and appliances. It’s also important from both a regulatory and a bottom-line standpoint: utilities have to meet benchmarks for lower-income customer adoption, and take-up from this group can disproportionately save the utility both time and money.
The challenge for utilities is deploying cutting-edge customer intelligence to recognize which people in this group to target, what their motivations are, and how to reach them. It’s notoriously difficult to engage with lower-income customers on energy efficiency programs, so utilizing household-level data to effectively target them is critical.
At first glance, these target customers don’t appear to be low-hanging fruit – they are the ones, in fact, who have most often struggled to pay their utility bills. They also have the highest current and overdue balances by far, and are 3x more likely than other customers to have had their service shut off. They require more dunning letters and warning phone calls and are nearly twice as likely to have had write-offs than any other customer segment.
In terms of demographics, they are the least likely to be married, the most likely to be the only adult in a household with children, more likely to live in multi-dwelling units, and less likely to own their residences than nearly all other groups. They are also the least likely to have completed college, the most economically unstable, and have the least access to banking.
Engagement with Utilities
It turns out that these customers’ historical engagement with utilities, because of their higher bills, actually makes them more likely to sign up for energy efficiency programs. BlastPoint research shows, in fact, that people who have been on customer assistance programs (CAP) or have received LIHEAP grants are much more likely to enter these EE programs.
This segment of lower-income customers has engaged with the utility before, and is likely to do so again – especially if the energy efficiency program is pitched as affordable and as a way for them to lower their energy costs, rather than to benefit the environment. After all, they are currently paying a higher proportion of their income on energy costs than any other customer segment. They are even more likely to sign up for these programs, of course, if any equipment they need to get started is provided for free.
Renting as a Barrier
The fact that nearly half of the customers in this segment rent may be the biggest barrier to them adopting energy efficiency programs. One way to overcome this is by targeting landlords who own properties with clusters of these customers. BlastPoint can help utilities identify these clusters, and this may be the best way to get these customers engaged.
Unlike higher-income customers who, according to our findings, tend to engage predominantly with print media like newspapers and magazines, these targeted lower-income customers are most reachable through radio and prime time TV. They are also much more likely to be active on Facebook than on LinkedIn.
BlastPoint’s customer intelligence platform can help you target specific customers like these with the most effective message in the most effective way. Download our Energy Efficiency one-pager to learn how we can help your utility boost program participation, meet your benchmarks, and save money. You can explore more of the energy-focused solutions that BlastPoint’s customer intelligence platform is perfect for, or reach out to us here to kick off your energy efficiency optimization strategy!