How to sell energy efficiency to domestic customers (with or without the Green Deal)
Posted by Cathy Debenham on 18 July 2012 at 9:23 am
Cost savings are not the most effective way of selling energy efficiency measures according to new research. In What's in it for me? Consumer Focus has analysed 15 projects that set out to increase energy efficiency behaviour in householders. It concludes that "saving money on bills is a useful, but problematic, benefit to use when promoting energy efficiency measures."
So what is the best approach for companies that are promoting energy efficiency to take? Based on its research Consumer Focus found two other benefits that are more effective.
1. Avoiding loss
There are two reasons why this may be more powerful than talking about future savings. By talking about the 'energy you are wasting' you will tap into people's aversion to loss, which tends to be stronger than their desire for gain. In addition, you are bringing the benefit from the future into the present. "As humans, we often value what is immediate over what may happen in the future," says Consumer Focus.
The research also found that being protected from future losses and future energy price rises can also be an important motivator for some people.
2. Increased comfort and warmth
Many of the projects in the study found that increased warmth and comfort were benefits that people often commented on after energy efficiency measures had been installed in their home. The ones that used them as explicit benefits in their marketing and communications also found it improved take-up.
Comfort and warmth are likely to be particularly useful as a benefit in marketing targeted at elderly people, those with young families and people living in properties that are likely to be draughty. Using a strong visual depiction of these benefits, as insulation project Cosy Devon did, is likely to be more successful than just using words.
Why not use lower energy bills as a benefit
There are a number of reasons that saving money is problematic as a benefit, especially for those who are not struggling to pay their bills.
1. Measures do not automatically equal savings
For example, people who were under-heating their home before may take the benefit in extra warmth and energy prices are rising all the time. This may undermine trust.
2. People prefer certainty
Not surprisingly, people view things that will 'probably' happen very differently from things that will 'definitely' happen, and for the reasons given above, you cannot guarantee bill savings.
3. People may not know how much they spend on energy, or check their bills regularly enough to notice a change.
4. Energy bills are a blunt instrument for demonstrating the effect of energy efficiency, as it is difficult for people to relate their actions to the change in a quarterly bill.
Barriers to energy efficiency retrofit, and how to overcome them
1. Energy efficiency isn't at the top of most people's priority list - in many cases it may not even be on their horizon. The research found that tailoring information, so that it was relevant to their particular type of property, was one way to gain people's attention. Making use of thermal imaging (to show the lost heat) also helped some of the projects to gain traction.
2. Paying back the loan
Green Deal research found that a third of people prefer to pay the cost up front, and only a fifth were keen on the spread of payments over time (which begs the question of why the Green Deal has been designed as it has - but this isn't the topic for today's discussion!). These findings were mirrored in Consumer Focus's research, with householders more interested in whether they could afford monthly repayments, than they were by the idea of making it cost neutral (as the green deal's golden rule aims to do).
3. Use previous customers as advocates
The research found that "people trust the experience of others who have acted more than almost any other source". One way of doing this would be to ask customers to recommend you on YouGen.
4. Reduce the inconvenience
Ideas such as helping people to clear their loft, or adding a loft hatch, are examples of ways to make the process as smooth and easy as possible for people.
What all this means for your marketing
It's clear from the research that one size does not fit all. As the research says: "Different people will be attracted to different measures, seek different benefits and face different barriers". As a result it makes sense (as with all marketing) to segment your market, and to be very clear about which segments you are targeting, which benefits are relevant to them and which barriers they face.
Too general a message, or one that gives too many benefits in the hope that one will hit home, are more likely to be ignored.
Here are some of Consumer Focus's recommendations:
- Take the customer's perspective. Make sure you understand the audience you are targeting.
- Segment the audience - don't assume that one size fits all.
- Ensure the benefits outweigh the barriers.
- Consider non-financial benefits and barriers
- Bring the issue into the present.
- Make it personal. Energy is invisible, so make it about their house, their family.
- Provide opportunities to touch and feel - this might be seeing the measures in a neighbours home, or a showroom.
- Encourage word of mouth (and word of mouth on YouGen - if you're not already a member, you can sign up here).
Photo by Jacek.NL
If you have a question about anything in the above blog, please ask it in the comments section below.
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