Download customer - American Public Power Association

Marketing 101
Components of a Complete
Marketing Program
Bryan K. Singletary
President
Practical Energies
Tampa, Florida
(813) 915-0545
Three Discussion Questions



What did you come here to learn?
What do you think that you should
know about marketing?
How active do you think your utility
should be in marketing?
What is Utility Marketing?
 Definition
 Today
 Tomorrow
What Marketing Is Not




Is
Is
Is
Is
not
not
not
not
SELLING.
SPONTANEOUS.
One-Size-Fits-All.
WARM FUZZIES!
Marketing Is





Is
Is
Is
Is
Is
MEASURABLE.
REALISTIC.
OBTAINABLE.
GOAL ORIENTED.
PRE-PLANNED.
Marketing Essentials




PLANNED course of action.
TARGETED to SPECIFIC results and
customers.
Requires CUSTOMER KNOWLEDGE
and INFORMATION.
Requires COMPETITOR KNOWLEDGE
and INFORMATION.
Why Plan?


Planning is an management tool to
influence outcomes
Good things can and do happen
without planning 

But only if you are lucky
Planning mitigates risk and allows
managers to make things happen
Types of Planning

Strategic Planning


Determining how a utility should
position itself to meet the demands of
stakeholders in a new competitive
environment
Ops planning

Focuses on accomplishing the strategic
results on time, on budget
Strategic Planning







Agree on realities of the future
Determine stakeholders
Determine your utility’s position and
purpose
Review your organizational values
Understand your capabilities
Set goals
Develop contingencies
Ops Planning






Know the budget
Determine the tactics
Identify the process
Assemble the resources
Communicate responsibilities and
schedule
Track the metrics
Strategic & Ops Planning




Observe social, political and
economic environment
Track major trends
Keep the customers close and
competitors closer
SWOT
Planning Pitfalls







Sometimes viewed as not relevant
Difficult to set aside required time
Conflicting staff expectations
Negative assumptions damper
process
Lack of involvement from all levels
Realistic action plans not
established
Unclear ownership
Keys to Planning Success





Must become a top priority
Must have commitment
Must be on-going
Must include marketing
Must, Must, Must, follow the plan!
Marketing Planning Flowchart








Customer
focused
Analyze market
Assess situation
Analyze impact
Analyze risk
Action plan
Reality testing
Evaluation
CUSTOMER
A good marketing plan
need be merely four pages long
1.
2.
3.
4.
Quantifiable goals
and target audience for each one.
Specific action steps &
who’s responsible for each one
The Budget (include revenue
projections, sales cost)
Calendar
Marketing is a Mechanism to ...

INCREASE customer benefit




ECONOMICS
QUALITY of LIFE (Services)
Reduce utility COSTS “per unit.”
Solve STRATEGIC PROBLEMS.
Know what you want to do!

Don’t engage in XEROX marketing.


Simply copying something that you
have seen at other utilities or this
meeting!
Move the meter with marketing on
issues that will do something for
your system.
What are the issues facing your
system?






Alternative fuels competition
Load shape problems
Regulatory changes
Customer satisfaction/loyalty
Sales of diversified products
Economic development
Alternative Fuels Competition




Water heater replacement
Energy efficient home
Heat pump promotion
Commercial and industrial
environmental assistance
Load Shape Problems

Direct load control







Water heaters
Heating and cooling systems
Irrigation systems
Generator sales and service (C&I
only)
Curtailable and interruptible rates
Market pricing and average billing
plan
Time of use rates
Regulatory






Grass roots lobbying efforts
Renewable/portfolio programs
Branding
Innovative pricing
Key Accounts
Energy efficiency services
Customer Loyalty / Satisfaction







Annual meeting
Branding
Customer service center
modifications
Service guarantees
Education
Employee community involvement
Rates & reliability
Product Sales






Direct mail
Telemarketing
Trade and home shows
Local fairs/festivals
Walk-ins
Cross selling
Economic Development





Individual direct sales
Key Accounts
Business park development
Statewide, Regional and National
associations
Chambers
You Must Target the Customers




There never was anything that was
“one size fits all.”
Not all customers will want or need
your programs.
Not all customers are needed to
meet your strategic initiatives.
Targeting SAVES money!
Water Heater Replacement
Targeting
Mailed
10,000
700
Respond
14
14
Closed
7
7
Cost / Sale
$1,430
$100
Targeting Exercise



What are some tools you could use
to target customers for one of your
existing/future products services.
You can only use data that is in
current customer database.
How long would this take you at
home?
Customer Segmentation



Type of customers you have will
impact marketing programs you
need and how you apply those you
have.
You must go beyond traditional RCI
classifications.
Multiple segmentation

Usage, connect date, annual meeting
attendance, responding characteristics,
age, income, etc......
New Market Segmentation
Customer Segmentation Approaches:
Traditional Vs. Market-Based
Customers
Traditional Approach
Residential
• Type of dwelling
• Age & income level
• Rate class
• Consumption level
Commercial, • SI C code
Agricultural, • Business size
&Industrial • Building type
• Mix of end-use
equipment
Market-Based Approaches
• Needs & expectations
• Preferences & buying
patterns
• Other
•
•
•
•
Business strategies
Business operations
Energy operations
Other
Commercial Segmentation
 Office
 Hotel/Motel
 Retail
 Institutional
 Grocery
 Restaurant

Schools and
Universities
 Medical
Data and Information ...
What do you need?

Data must be able to answer
fundamental market questions
about:




Your
Your
Your
Your
utility,
customers,
competitors and their customers,
existing programs and services.
Your Utility




Customers by segment.
End uses saturations and load data.
System load analysis.
What portion of the market do you
own?
Equipment Saturations


The types and numbers of
appliances and electric equipment
your customers possess are drivers
for definition of market needs and
potentials.
You need to know how many of your
customers have specific end uses
and how many they have.
End Use Data




Appliance
saturations
Potential new enduses
How and when are
they used
Large energy
consuming end uses
will drive kWh sales
and marketing
programs

Residential






Space conditioning
Water heating
Lighting
Refrigeration
Other
Commercial and
Industrial






Lighting
Space conditioning
Motor
Water heating
Cooking
Other
Load Curves



How customers use electric
appliances and equipment
determines your power
requirements.
Each appliance has an electrical
signature called a “load curve.”
Load Curves shows how the device
uses electricity over a specific
period of time.
Load Curves


Data represents an average usage
of the end use by an average
customer.
When added together will produce a
system load curve.
Load Curves



Equipment that has a high peak
demand and low usage will produce
a load curve with sharp peaks.
Equipment that runs all the time will
produce a flatter load curve.
Flatter load curves tend to produce
lower per unit power costs.
What Portion of the market do you
already have?


Market share is a measure of how
well you are doing.
Four Different types of market share




Customers
Electricity
Energy
Revenue
What do your customers want?

From you as an energy supplier?




Low cost energy?
Efficiency/conservation assistance?
From your utility as a member of
the community?
In general?
Know your customers needs and
wants!




What do they want and why?
How and when do they want it?
How much are they willing to pay or
not pay to satisfy their needs and
wants?
Is your utility prepared to look at
the customer in a new way?
Customer Needs and Wants



Each customer group will have
different needs and wants.
Customers within each group will
have specific and unique needs and
wants.
Determine those you can serve and
provide direction to the others.
Your Customers

What drives your customers’ energy
decisions?




Attitudes about your company.
Opinions about energy issues and your
company.
Purchasing drivers.
Knowledge of customer needs and
wants.
Customer Attitudes

What does the customer think of your
utility?




Are you easy to do business with?
Do they know what a public power system
is?
Do they view the utility as a professional
organization?
How do you rate when compared to other
suppliers?
Customer Issues

What keeps the customer up at
night?






Environmental issues.
Job security.
Economic issues.
Energy conservation.
Community projects.
Energy issues and prices.
What drives customers in selection
of energy supplier?




Price
Service
Reliability
Quality



Access to
decision makers
Locally owned
and/or operated
Being a public
power system
Your Competitors

Benchmarks




Costs
Market shares
Programs
Actions and offerings


Current
Future
Competitor Benchmarks







Rates and prices.
Cost of service.
Integrated resource plan data.
Average sales.
Customer size.
Revenues per employee.
Personnel data.
Competitor Actions

Current marketing
programs:





Names
Target customers
Success rate
Staffing
History

Future marketing
activities


Research
Strategic initiatives
Competitive Actions and Response

Your competition can and will drive
your marketing efforts. They:




Claim being more high tech than public
power.
Use rate advantage.
Often provide more resources.
Don’t get in the program matching
business:


Marketing is not the fashion industry.
Market to meet your customers’ needs.
Competitive Actions and Response

Virtually anything you do can and
will be matched by someone.


Craft Beer - five years ago there were
almost none, today every supplier has
at least one line.
If you don’t match/exceed
competitors products / services
your customers want / need, you
will lose market share: possibly the
system!
Competitive Actions and Response



As a first step in the marketing
process, look at what your
competitors are supplying and ask
your customers and theirs if this is
a service they want.
Make sure the offering is
strategically beneficial to your
system.
When you can beat the competition
to the punch or uncover their plans
- role your program out first!
Your Current Actions



What marketing and conservation
programs do you currently have?
What marketing/community
activities are you engaged in?
How do you measure the
effectiveness of your efforts?
Current Marketing Programs




What are your existing/planned
programs?
Who is your target audience, and
why?
What type of market research did you
do to decide you current course of
action?
How long have you been operating
your current programs?
Current Community/Marketing
Activities

EXERCISE





List your current community activities.
List the benefits to your customers.
List the costs to your customers.
Can another company provide the
same activity/service?
Why are you involved in these
activities?
Current Measurement Tools



What tools are you using to
measure the success of your
programs and activities?
Are current programs/activities
consistent with strategic goals and
objectives of the utility?
Can your measurement tool tell you
if you have made poor, fair, good,
great or “totally awesome” progress
towards goals?
What Can Be Measured Demand Reductions



Demand reductions must reflect
actual demand adjusted for weather
and growth
Demand can be measured from
billing and or metering records
Beware of demand payback,
especially with DLC
What Can Be Measured Expense Reductions
 Provided
utility has consistent
expense baseline, expense
reductions measured
immediately.
 Look at associated program
expenses to insure true savings

Ex. - Not replacing an employee may have
reduced total labor costs, but tasks may
now be performed via outside services
under a different account at a higher rate.
What Can Be Measured Consumption Changes

Energy consumption can be monitored
at





Customer level
End use level
Distribution system level
Power Supplier level
Normalize consumption for weather
and other customer changes
What Can Be Measured Revenue Changes

Revenues from customer energy
and demand consumption or
associated services is a fundamental
measurement tool


likely one of the only tools for most
business’
Adjust increased revenues for
rate/price changes
What Can Be Measured Program Participation


Counting how many customers take
advantage of program/product or
service will provide a snapshot of
acceptance and market share
Understand that accumulating a lot
of bad things will result in a net bad
thing

“we’re only losing a dollar on each sale
- but we’ll make it up in volume”
What Can Be Measured Attitudes/Satisfaction

Customer satisfaction and attitude will
be meaningless without a baseline



If 95% of your customers love you after the
implementation of your marketing program it may
mean the other 5% stopped.
But it can be measured and tracked
with follow-up polls.
Poll for specific results not general
info. - polling is a science!
A Checklist for Marketing, Customer
Services & Communications
Troublemakers
Who will your customers be five years
from now?







Older? Younger?
More commercial?
More residential?
More surburban?
More resort / recreation?
More agribiz?
Generating their own power?
Your mileage may vary


The only certainty is that it will be
different than it is now.
The issue is how to prepare for an
uncertain, changing customer
market.
The “usual suspects”
on this topic list



Communicating your mission
while forging ahead with change
Explaining new products and
services to your customers
Public power principles vis a vis
diversification of products and
services
The REAL issues:



How do I make the most
of what I've got?
How do I get my hands on the stuff
I need but don't have?
How do I get the time, money, and
"buy-in" to do what has to be done?
ALL-PURPOSE HANDY-DANDY
MARKETING, CUSTOMER SERVICES &
COMMUNICATIONS SELF-RATING CHECKLIST
a.k.a. the handout
1.
Do you have an understanding of
your new roles & responsibilities?
The good old days…






Newsletters
High bill complaints
Power use advisor / energy auditor
School safety programs
PSAs during a storm
Schmooze State Sen. Fatbottom
Now there’s a whole new jargon









Sales force
Key accounts
Restructuring
New economy
Diversified services
Customer aggregation
Distributed generation
BPL
Renewable energy
And there’s a bunch of new stuff
decorating your job description







Webmaster
Market Research Analyst
Customer Database Guru
Product Manager
Brand Manager
Key Accounts Executive
Sales Manager
So what you need to do is…
 Get
a clear definition
of what you’re supposed to do.
 Understand how will you know
that you have succeeded
 Make sure your resources and
authority match those new
expectations?
1.
Do you have an understanding of
your new roles & responsibilities?
Rate yourself on a scale
of 1 – 10
2. Have you done a
competitive analysis?
Competitive analysis basics







Keep a clipping file
Shop the competition
Buy shares / read annual reports
Internet sites
Bridge to their employees
Call on their key accounts
Poll their customers
2. Have you done a
competitive analysis?
Rate your utility on a scale
of 1 – 10
3.
Are you systematically measuring
customer expectations?




Do you poll every 18 months or so?
Do you call on key accounts at least
once per year, and do performance
/ value evaluations for each
account?
Do you systematically track and
evaluate all customer contact?
Have you done ANY snooping on the
other side of the fence?
3. Are you systematically
measuring customer expectations?
Rate your utility on a scale
of 1 – 10
4. If you could teach your customers only one
sentence in the next 12 months, do you know what
that sentence should be?


If you’ve got such a sentence, write
it down now.
Is it research driven?
4. If you could teach your customers only one
sentence in the next 12 months, do you know what
that sentence should be?




You don’t have money to do more.
Is your sentence specific,
significant, and compelling – or just
adjectives?
Is it a USP – unique selling
proposition – that makes an “only”
claim?
If everyone believed it, would it
make any difference?
4. If you could teach your customers only
one sentence in the next 12 months, do you
know what that sentence should be?
Rate your utility on a scale
of 1 – 10
5. Is your marketing program connected to your
communications program – and vice versa?



Do marketing and communications
have a written plan to leverage each
other’s resources?
Do you time stuff to match
messages so you can break through
the clutter?
Do you share market research,
database, and targeting functions?
5. Is your marketing program connected to
your communications program – and vice
versa?
Rate your utility on a scale
of 1 – 10
6.


Do you have message
discipline?
The challenge is NOT thinking up 24
new things to say
If it does not support the central
message, kill it.
6. Do you have message
discipline?
Rate your utility on a scale
of 1 – 10
7. Do you have goals that contain
numbers?




Are they written down?
Are they do-able?
Are specific resources assigned?
Would achieving them make a
difference?
7. Do you have goals that
contain numbers?
Rate your utility on a scale
of 1 – 10
8. Are you mining your
database?




Do you know what data is on your
customer file?
Do you have ready access to the
data?
Can you target your most likely
“players,” least likely, mid-likely?
Have you ever done a targeted
mailing to a subset of residential
customers?
8. Are you mining your
database?
Rate your utility on a scale
of 1 – 10
9. Do you have an offense?






Diversified services
Key accounts offense
National accounts
Sales territory agreements?
Residential aggregations?
Selling your services outside your
service territory?
9. Do you have an offense?
Rate your utility on a scale
of 1 – 10
10. Do you have a plan
to get buy-in?



From your manager
From your fellow employees
Have you listed the objections you
expect to encounter and
brainstormed a solution to each?
10. Do you have a plan to get
buy-in – from managers?





Do test projects
Let the GM try the product
Show the money
Examples from other public power
systems
Get him/her to think it was HIS/HER
idea
10.





Do you have a plan
to get buy-in – from employees?
Share authorship
Recognition / appreciation
Group bonus / incentives
Information about competition
Added value
10. Do you have a plan
to get buy-in?
Rate your utility on a scale
of 1 – 10
11. Have you created strategic
alliances?



National image / national accounts
Regional organizations, joint action
agencies
Local departments and services
11. Have you created strategic
alliances?
Rate your utility on a scale
of 1 – 10
12. Do you have a plan to liberate
money?





Prune from the bottom
Kill sacred cows
Keep charity & advertising in
separate budgets
Do bursts instead of level buys
Timing is everything
13. Do you have a plan to liberate
more time?




Prune from the bottom
Kill sacred cows
Timing is everything
Buy large trash bags
13. Do you have a plan to liberate
more time?




Ask for help
Delegate
Budget your time
Learn to say no nicely
13. Do you have a plan to
liberate time?
Rate your utility on a scale
of 1 – 10
14. Do your customers understand
the advantages of belonging to a
public power system?
The public power advantages:
1.
Locally owned and operated

2.
3.
4.
5.
Money & jobs stay here
Public power put consumers first
Public power systems are
responsive to local needs.
Economic participation
Customers have a voice
14. Do your customers understand the advantages
of belonging to a public power system?



How well do they understand it?
How many of them understand it?
Is there a “fault line” between who
understands and who does not?
14. Do your customers understand
the advantages of belonging to a
public power system?
Rate your utility on a scale
of 1 – 10
15. Are you systematically converting
customers into owners?




If your system is typical, only 1/3
see themselves as owners.
Are you making it impossible for
new customers to miss the point?
Have you targeted existing
customers who are less likely to
think of themselves as owners?
Is your plan pro-active?
15. Are you systematically
converting customers into
owners?
Rate your owners on a scale
of 1 – 10
Add it up.


What are your top two strengths?
What are the top two or three areas
you need to work on?
A Rational Process





Must know where you are in the
marketplace.
Must know where you are going.
Are there strategic issues to
address?
Do you have a need to market?
You do not market for marketing
sake!
Summary and Review


Marketing is a Science!
Marketing should be used as a
measurable tool.



Just as with a transformer or capacitor
bank.
Evaluate and modify what you do!
Set goals that meet your system’s
needs!