How PECO is using direct marketing to reach new commercial customers

Energy efficiency has been around for decades, and it continues to play a big role both for utilities and their business customers. As utility data gets smarter, they’re able to provide better services to their customers and deliver more personalized, targeted outreach about how and why commercial businesses (and residential customers!) should invest in energy efficiency measures.

And they can expand beyond the traditional “feet on the street,” one-to-one approach. Now, utilities can use the latest targeted advertising techniques to reach commercial customers, build awareness, garner interest, and ultimately increase participation.

In this podcast, join the discussion with Tom Brubaker, senior marketing specialist at PECO, and Nancy Caplan, vice president of marketing and engagement for commercial energy at ICF. They’ll focus on:

• The evolution of utility marketing campaigns in the commercial sector
• The importance of data in identifying business customers with the highest likelihood of participating
• The role of targeted messages in encouraging businesses to invest in energy efficiency

Full transcript below:

Emily: Hi everyone and welcome to "The ICF Podcast" where we discuss the work and perspectives that ignite real and lasting change. This episode, we'll be discussing trends in utility marketing and customer engagement, and some emerging priorities. I'm Emily Kleiman and I'll be your host for today. And we have two guests joining us, Tom Brubaker, who's a Senior Marketing Specialist at PECO, and Nancy Caplan, who's Vice President of Marketing and Engagement for Commercial Energy at ICF. Tom, can you tell us a little bit more about PECO, where you're located, how many customers you serve?

Tom: Sure. PECO is Pennsylvania's largest electric and natural gas utility. We're headquartered in the city of Philadelphia and we deliver energy to about 1.6 million electric customers and more than 529,000 natural gas customers in Southeastern Pennsylvania. We are a subsidiary of Exelon Corporation, which is the nation's only Fortune 100 utility and leading competitive energy provider. We operate in a deregulated market as it applies to supply in Southeastern Pennsylvania.

Emily: That's great. And I know we'll be hearing a lot more about PECO's marketing and engagement with customers. So Nancy, over to you. Can you tell us a little bit about the marketing services group at ICF as well as our work with PECO?

Nancy: Sure. I'm specifically within the commercial energy division of marketing services and helping utilities across the country market to their customers - who used to be called end users. And we provide everything from advertising and brand awareness, to lead generation, to any kind of marketing services you can imagine that's needed to engage your customer to get them to act.

Emily: That's great. Thank you both. So diving into our topic for the day, I wanted to set the stage a little bit for our listeners. Tom, traditionally, what has PECO done from a marketing perspective to reach commercial customers?

Tom: That's a really good question, Emily, because traditionally the utility model in general has been to build awareness about programs and pretty much take orders as they come in. That's something that we certainly do continue in building awareness campaigns, matching it with a number of different initiatives that I think has brought success to the PECO programs. The increased awareness with the combination of multiple tactics has really helped us increase awareness among our small commercial customers. We recently surpassed a 50% awareness mark which was a big accomplishment for the program team.

I would say also, traditionally we've relied on utility data. And utility data is one of those things that I think notoriously is not the best from a marketing standpoint. So we have utility data that's based on meters, based on what our customers are using, where they're located, and the meter type. But from a marketing standpoint it hasn't always been that useful in contacting and engaging commercial customers.

Nancy: You said that you have a 50% awareness level of your commercial business customers of your programs. That is such a significant leap from what traditionally utilities can do in really communicating with their customers.

So it's usually, what, in the 30s and 40s and you're over 50 now, 50%, and that's really understanding a whole lot more about that particular business and what are the different types of buildings and not necessarily just the meter that is servicing those buildings. Historically, utilities have used the data because they need to know, is the power on or off? Am I billing you correctly? And do I have enough supply on the grid to be able to support you?

Emily: So it sounds like utilities can really be valuable partners for these businesses. You know, how are you seeing the emergence of industry challenges and opportunities kind of moving forward in the partnership space?

Nancy: Yeah, I think that's probably one of the biggest changes that has happened especially, I would say on both the residential and the commercial space. But within the commercial space it’s big... Utilities had traditionally been the guys that come and put your power back on, or they send you a bill and you have to pay it. And as a customer, you either like them or you don't. They're heroes or else they're the bad guys. But now the utilities are changing that relationship with their customers because it's a mutual benefit to both.

Utilities are the lifeblood of every community and of this nation. And it's that power and that energy that really powers people's ability to do business and to live. And so that partnership of making sure that that energy is being used to the best that the resources can allow and to help make sure that the businesses have the energy when they need it and the type of energy that they need at particular times, that's become critical. With smart meters, utilities now know the time of day, how they use their energy, and when they use their energy, so that they are able to better manage the resources coming into those businesses for commercial customers.

Tom: Yeah, that's exactly right, Nancy. And I think the availability of interval data allows customers to actually take more control of how they're using data, both on the commercial and the residential side. And I'd also say that through many of the focus groups that we've conducted, listening to small business and medium-sized business owners about what their issues are, undoubtedly reliability is at the top of the list. But moving beyond that, we've seen a trend where customers certainly with higher awareness numbers are now talking about energy efficiency and what they can do to become more efficient.

In a local focus group that we had up in Philadelphia, the customers talked about how when they have a need, they're not necessarily reaching out to the utility, but they've “got a guy” that'll take care of that. And that guy's a contractor or maybe somebody that's on staff at the business and they're not really thinking of the utility as a resource, which is something that we're determined to change.

In the medium size, there's always the challenge of the facility versus the business. Are they a tenant? Are they an owner-occupied customer in their facility? And how do we get to the decision maker? At PECO, we took a look at all of the different titles of everyone that had signed an application who was making a decision on an energy efficiency upgrade. And we got about 1,600 different titles of people that were actually making those decisions. We were able to classify it down into finance and facilities, which is how most of them fall out. But it just gives you a sense of how broad a range of the decision makers that are out there for business customers.

Emily: What are you seeing trend wise from your large commercial customers from the smaller mom and pop shops?

Tom: So I would say from a larger commercial customer side, there's still a reliance on the relationship they have with the utility through the large customer service account manager who really is there to answer the phone when there's power out or when they have an issue. It's very difficult to penetrate the medium business segment. Medium and small, I would say -- small a little less so. If you're a small business owner, you're probably still opening your paper bill, you're getting the bill insert, and there's an individual we can go to. The challenge there is that small business owners don't necessarily have the resources, either time or the money, to invest in energy efficiency upgrades.

Emily: So I understand though that in the small business space, you did have some pretty impressive results from some of the marketing activities that you've put in place. Can you talk a little bit more about those examples?

Tom: So through utility-owned channels, smaller mom and pop and small business owners typically receive those paper bills. They're opening the bills or paying the bills. And our bill inserts are really catching attention. We've practically doubled our lead gen in using bill inserts to capture that small to medium size business market, which has really been really been helpful for us.

Emily: Yeah, that's definitely powerful. It shows how delivering that right message to the right person through the right channel can really drive those results. You know, you and Nancy have both touched upon data, right? It's a hot topic in every industry. And there's so much of it out there, and you can slice it and dice it so many different ways. Can you tell us how PECO's relationship with data has been evolving?

Tom: So I would first say that today's data is much richer. There's a lot more available. Certainly in looking at combining both the utility data that we do have, whether it's usage data, interval data from our smart meters, and blending that with third party data, so whether it is firmographic information, from compiled sources, or other data that we have on a customer, that blend and bringing together those two or multiple data sources gives us a more complete target to market to. And I think much more productive in the end.

Nancy: PECO has always been stellar in making sure that their largest customers are well taken care of and that they understand what's going on and they have that personal concierge service. When you get down to your smaller medium size business, they don't. And so it's always been how do you reach that part of that market that is so critical? How do you reach them when you don't have that feet-on-the-street personal concierge service? And so that's where data has become so essential in allowing us to engage them digitally, to allow them to really have a relationship with the utility and the utility to have a real relationship with them through digital channels.

PECO has instituted in the past three years a very large platform for all of its email communications, called Eloqua. That in itself has allowed marketing automation and an intelligence -- a digital intelligence -- of the customer that utilities have traditionally not had before, and being able to communicate to them and send more effective messaging that resonates with the issues that they might be dealing with at that time.

Tom: You know, large commercial customers at PECO, we have about 2,500. Every other customer is about 160 to 164,000 customers. So the difference in being able to provide that one-on-one to our larger customers is a little less practical when you look at the numbers that we have in the medium to small. So being able to use a platform like Eloqua, keeping energy efficiency top of mind, communicating with customers on a regular basis, and showing them that we understand who they are. So where possible, understanding the vertical, understanding that the email we're sending is going to a pizza shop owner. So maybe sending it at 12 noon on a weekday is not the best time to send an email.

Emily: Yeah, that makes a lot of sense. It's all about relevance, really, when it comes down to it, regardless of the channel. Hiven that, what are your current goals for marketing to PECO commercial customers?

Tom: That's a good question, Emily, and I'd say that we're in the midst of Act 129, phase 3. Pennsylvania Act 129 is the state act that basically mandates all EDCs in the state of Pennsylvania provide energy efficiency incentives both on the residential and commercial side to their customers.

Phase 3 ends in 2021, May 31st, 2021, and it's a five-year phase. We've been working through that. The commercial savings in the program are fairly aggressive and we're striving mightily to meet them. I would say because of those savings targets, lead gen has become a really strong part of what we do in marketing to commercial customers to be able to have commercial customers indicate if they're interested in energy efficiency. One of those driving benefits or features that we always try to get across to our commercial customers is that we're here to help you in your planning and budget cycle, so our incentives should factor into how you're determining and how you're going to line up your capital investments.

Emily: So with that in mind, who are your untapped customers?

Tom: It's the middle customers that have really been the challenge for us. So they're not the large ones, they're not the super small, but the middle ones. And they're hard to reach traditionally because we don't necessarily have the data on who the right person is to contact at that organization. A smaller company may be a mom and pop, and if you knock on the door or canvas and walk in, you know, you're going to be talking to the owner. In this medium size, it's really hard to determine who the decision maker is going to be. Certainly the property owner, it could be a REIT, could be an LLC, could be owner-occupied, but maybe not so. So that's probably one of our biggest challenges in the medium sized business segment.

Emily: How do you market to these medium-sized customers? What have you found works?

Tom: I would say the full stack marketing approach to collect contact information on who the key decision makers are. Once we have that, we like a 360-surround process so that they are receiving messages from us in a variety of ways, whether that's a radio commercial, a direct mail piece possibly, that bill insert, an email…any way we can build awareness that PECO has solutions for them is what we push out. And once we get that greater awareness, it makes our direct marketing more productive. So, if they are aware that PECO has energy-efficiency solutions available for equipment upgrades, once they do get that more targeted direct marketing approach, they're more likely to respond and engage with us.

I would also like to say that this is a long-term relationship. It's not a one and done. So we're engaging, we're talking to them, we're trying out various messaging points, whether it's sustainability or lower operating costs, lower maintenance costs, all of that is put into our entire routine and how we message to them, so that at the right time, we're going to get a response from the customer.

Nancy: It's multiple touches at multiple times with the most targeted messaging that you can do and give. And that's where the underpinning of everything always comes back to the data… how do you build those lists so that you are hitting those targeted people with the right information? And that's where utility data is a great foundation. But then you have to go beyond that and really build a profile of these people that are out there, that are making the decisions that are so critical to having these programs run.

Tom: You're right. And when you say commercial customers, it's not the facility, it's not the building, it's an actual person. And I think there are people that have consumer-based experiences from their everyday life. So those experiences, especially in the digital space, are setting a tone and expectation for interactions with their utility. If you're using Amazon, as many of us are to deliver a product, that experience is what becomes your baseline. It tends to be what you expect. And having that as an expectation is a real challenge for utilities and having to live up to that higher level.

Emily: Right. Definitely. And I think that's probably cross industry as well. So thinking about this approach, can you share any results or takeaways that you've seen initially?

Tom: Yeah, I would say in the past, our results have been somewhat average when it comes to a general message that we're broadcasting out to all customers, commercial customers. That experience has jumped dramatically when we tailor that message to this sector that we are targeting. So, sector-specific messages have dramatically increased. I think our web sessions are up by 138% when we converted to sector specific messaging, which has been a great success for us.

Emily: Is there a case study on one of the sectors and some of the specific messaging that you have been using?

Nancy: Well, yeah, I would say, for instance, groceries. It’s a very large sector that has benefited terrifically from the programs that PECO offers. And we've been homing in on exactly what are the benefits of the energy efficiency programs that we offer you, whether it's Acme or Wegmans, you know, how can we work with you better to serve you? Obviously, refrigeration is a huge cost, lighting to display their products a huge cost. Many are operating 24/7. So, we really understand that what is critical to them to make sure that it is warm, comfortable, and that customers want to come in and buy from there.

Tom: And we've done a lot of research for grocery stores and supermarkets, so we don't want to assume what the messaging would be necessarily for that organization. And we found that on average supermarkets spend about $200,000 on energy costs each year. So, by saving $1 in energy costs could increase sales by nearly $60. Putting that in perspective to a grocer in that way really helps compel engagement and response.

Emily: Can you talk more about some of the other digital approaches you use to partner with the sales team on getting these leads in the door for PECO?

Tom: We use a lot of different digital, data-driven approaches that enable the sales team to focus on customers who have identified an interest and an opportunity for energy efficiency. The work to identify the right decision makers and the sectors with the highest propensity to participate enables our team to work smarter, not spending their time engaging with customers that have no interest.

We've had a lot of data work done from a propensity modeling and scoring standpoint that allows us to identify who is more likely than not to participate in the program. And across the board, it has helped us focus our energy and our resources.

Emily: What are some of the other ways you reach people outside of email, outside of some of those other channels that you're using? Who else do you engage?

Tom: Well, I would say we can't forget service providers. Over 70% of all of our project applications come in from service providers with contractors and trade allies. They are strong partners and we engage them in a number of different ways and have a fairly robust marketing strategy for making sure that we stay in contact with service providers, helping them bring in projects and helping them find new projects to bring in. We have annual recognition and awards programs for them. We actually, for those that have qualified as a trade ally with PECO, have a searchable database on our website where customers can come and find a trained trade ally for their project.

We also provide them with sales tips. We do trainings, we give them bonuses. We do one-on-one outreach support, and we also send them a monthly newsletter, “Trade Talk” that gives them information not just on our programs, but on industry information that they may find valuable. And we also do trade alerts that let them know of program changes as they come up that they may need to know about. So it's a real comprehensive strategy in keeping trade allies, contractors, and service providers engaged

Nancy: By PECO having this rich relationship with those people that are dealing with the people that we need to be talking to, that's a significant engagement tool.

Emily: How does PECO create that multichannel experience?

Tom: We talked a little earlier about kind of the way in which we like to surround a customer with our messaging, and certainly having blitz campaigns helps us to do that. Everything from outbound calls, to emails, to developing a smartest path for the outreach team to hit, as well as post emails and post calls as a follow-up. So really doing the pre-work, actually getting out there with the main message, and then doing the follow up work is the key to actually a full engagement with our commercial customers.

Emily: This is a good place to wrap. What is next for PECO?

Tom: I think all companies, not just utilities, have to be thinking about more personalized communications and how to build a relationship through the channels where millennials are actually operating right now. In some cases, it means also going back to some old school methods. So we've seen an uptick in direct mail and how that's being received by customers who are also very used to using and receiving emails.

Nancy: Right. So believe it or not, people do open the mail, especially if it comes from your utility company. And that is one advantage… that they know that there is a serious reason why a utility would be messaging you, whether it's a direct mail, a postcard, whatever. So that is an advantage that utilities do have. But there are so many other things that are going on as well in the industry that has changed the way that utilities are really interacting and engaging their customers. So that you might not be Netflix just yet, but you have built your systems to be much more responsive to customers in ways that they hadn't before.

Tom: And when you say that, Nancy, it makes me think about all of the tools that are available on our website through “My Account,” whether you're a residential or a commercial customer, and all the various illustrations that you can view based on your usage, all of the alerts that you can set for yourself. So you'll get a text if your bill is running higher this month than it was last month, or if your power's out, or if you'd like to know exactly when there's a storm moving through the territory. All of those things are fairly new in the utility space, and I think are bringing us closer to the expectation that a lot of people have.

Emily: And where will you be soon?

Tom: We're actually presenting at AESP. It's their 30th annual meeting out in California in February. So ,we'll be on a panel out at AESP talking about B2B marketing and I'm looking forward to that.

Emily: Great. Thank you both so much for being here and thank you so much to our listeners. Be sure to subscribe to "The ICF Podcast" for more industry insights and perspectives and follow us on social @ICF. Thanks so much for tuning in.