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CMO Council Study Finds Marketing by Utilities Must be Relevant, Targeted

May 24, 2011
PALO ALTO, CA—May 24, 2011—A new study by the Chief Marketing Officer (CMO) Council has found that utility marketers must turn an eye towards relevant, targeted content delivery and improved segmentation and targeting measures to improve outcomes, maximize profitability and effectiveness.

According to the findings of the “What’s Critical in the Utility Vertical” survey, consumers are making active decisions about bill payment priority, necessitating a shift in how utility marketers activate loyal consumers who would never consider making late payments or skipping them altogether. Nearly one in four consumers admitted that they have had to delay payment of bills, largely because funds were not available. An almost equal number indicate that their power bill is among their highest expenses alongside of their rent/mortgage, credit card and transportation costs.

Looking to address the wallet-depleting challenges of the customer, utility marketers are identifying key value-added communications and engagements to address key points of customer pain and need. Marketers intend to add value to the relationship by providing tips and ideas for conservation (62 percent); educating customers about charges, costs and service solutions (34 percent); and proactively addressing issues, complaints or concerns (34 percent). But only 19 percent of marketers are looking to deliver promotions, coupons or direct savings opportunities, despite a call from consumers for more opportunities to save.

The study, based on insights from an online survey of North America-based consumers (1,425) and global utility marketers (120), reveals that while general messaging about green practices is appreciated, specific conservation, reduction and savings tips are better received, recalled and actioned upon.

When asked to recall messages sent by utilities:

• Nearly 45 percent of consumers surveyed recalled receiving information about how to reduce consumption.

• 40 percent of consumers remember receiving information on how to lower or manage payments through various payment options.

• Only 30 percent of consumers recall receiving general information about going green.

“Relevant, targeted and trusted content is moving the needle for customers,” said Donovan Neale-May, executive director of the CMO Council. “Marketers must move towards ensuring that the multitude of channels reacting customers leverages the most relevant, fresh and targeted content possible to maximize Content ROI.”

Utility marketers, the report reveals, have a significant opportunity to impact solution adoption and even purchasing decisions through the delivery of relevant, targeted communications. An impressive 40 percent of customers indicated that they purchased the products recommended to them by their utility companies. And, among consumers who recalled receiving communications from their utility companies, 73 percent took action based on messages offering specific offers, tips or solutions compared to 67 percent of consumers who were compelled to respond or react to general messages around green practices.

Of the consumers who did not act on the messaging, 36 percent felt that the messages were either unrealistic, impossible to implement, or that not enough information was provided. Twenty-five percent rejected the recommendation or solutions because they felt no real advice was offered—just an abundance of marketing messaging.

“What the study reveals is a real opportunity for the utility industry to improve business outcomes by leveraging content relevance and customer engagement,” stated Sandra Zoratti, vice president of solutions marketing for InfoPrint Solutions. While consumers acknowledge their continued struggle through financial hardships, even in a constrained economy there are loyal consumers who are open to building deeper, more engaged relationships with companies who provide more on-target service and support without adding to operational overhead.”

Marketers are answering the call for relevance by focusing on better targeting and segmentation of their customers while developing programs that leverage customer insights to provide relevant content. The top three engagement priorities for the year ahead include educating customers through relevant and understandable content (35 percent) gaining a deeper understanding of needs and expectations (34 percent) and improving the relevance and value of content (33 percent).

While utility marketers are well versed in aggregating data and demonstrating a willingness to more effectively segment and target populations, they still struggle to measure and justify program investments. Of the 77 percent of marketers who conducted some form of green messaging campaign, only 29 percent failed to use any segmentation strategy to better target communications and 28 percent failed to measure the effectiveness of the campaign. Among those marketers who segmented their market by broad location based segments (zip code, etc) 50 percent deemed the program a success based on positive response or advocacy from customers.

However, among the marketers who took a more targeted approach, leveraging individual household usage and behaviors, 73 percent rated their campaign a success. Interestingly, those marketers who failed to segment or target communications almost unanimously agreed that their campaigns were not a success as 90 percent felt few customers actioned on the message, few were able to recall receiving the message or that there was no way to know as no measures were placed on the campaign.

“Precision marketing demands measurement as much as it enables the delivery of relevant content through the optimal delivery channel,” continued Zoratti. “Utilities marketers have an audience ready, willing and eager for engagement, so long as it is relevant and speaks to service and solutions. They don't want wasted marketing messaging. They want engagement that they will repay with advocacy and positive word of mouth—and the continued belief that on-time payment of their bills is critical.”

The complete results of “What’s Critical in the Utility Vertical” summary can be accessed through the Precision Promotion portal, where readers will also find information and resources on how thought leaders are crafting more timely, targeted, relevant engagements with customers, and where and how the customer dynamic has changed. The 25-page paper includes expert insights along with complete detailed findings of the survey consumer and marketer surveys. To access the report, got to http://www.cmocouncil.org/cat_details.php?fid=205

Source: CMO Council.
 

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