Fiveworx Director of Strategy and Marketing, Laura Orfanedes, sits down with president and CEO of Shelton Group, Suzanne Shelton, to hear about some key nuggets of customer insight coming out of her firm’s latest national poll of American energy consumers, Energy Pulse™, and how these insights impact the messaging we design for energy marketing.
Laura: Welcome to Five by Five. I’m Laura Orfanedes. I’m Director of Strategy and Marketing for Fiveworx and I’m here this afternoon with Suzanne Shelton. She’s the president and CEO of the Shelton Group.
Laura: Hello. We are interviewing here at your beautiful offices in downtown Knoxville, Tennessee. Suzanne, you and I have know each other many, many years in the energy efficiency and utility world. I thought I was going to sit down today and maybe ask you a few questions on the occasion of your most recent energy pulse study being released. I have been itching to ask you a few questions about what findings you’re getting, any interesting trends you’re seeing, other types of nuggets of insight. In full disclosure, Fiveworx is a spin-off of the Shelton Group. As part of our ongoing business relationship we have the exclusive license to use your segmentation that comes from your energy pulse studies in our email marketing and marketing automation platform. With that I’m going to start off by just asking you, broadly speaking, are there any overall trends you’re seeing in the latest pulse studies that blew your mind or made you really scratch your head and say, “Wow!”
Suzanne: I guess I would put this answer in three buckets, Laura. There’s the continuation and further verification of some trends we’ve seen. Every year as we see something come up then the next year it’s like, let’s dig a little bit deeper on that. Let’s dig a little bit deeper. An example of that is this concept that people don’t think they need energy efficiency. We’ve seen for years – literally, for 10 years – when we’ve asked the question, “Do you use more energy today than you did five years ago?” For 10 years the answer – 80% of the people say, “No! No! I do not use more energy.” And that 80% number has been the same for 10 years. The truth is, we are using more energy – most of us are.
When we parse out the data, I think what’s interesting about that, and maybe not really surprising, is that the younger the house is the more likely they are to think it’s energy efficient just because it’s a younger house. So let’s dig into that. Seventy-seven percent of people who live in a home that was built in the last 20 years believe it is energy efficient just ’cause it was built in the last 20 years. So there is this false perception that just because it’s newer it’s energy efficient so I think that’s both a challenge and an opportunity from a messaging standpoint.
The other thing, though, is that 55% of the housing stock in the US is over 20 years old. So most of us are running around with this idea that I’m efficient, and we’re really not. Forty-nine percent of us, by the way, believe our homes are already energy efficient, thank you very much, despite the fact that 45% of us say we’ve done nothing to improve the efficiency of them.
The second bucket is things that are new variations on an old theme. For instance, we dug into comfort more. Bottom line: most people’s experience of energy efficiency is they don’t save money. It’s what we’ve decided in this industry is the value proposition so we just keep screaming it. Yet most people have an experience of going out and doing some energy efficient things and they actually report that their utility bill goes up and not down. So I have long preached let’s talk about comfort instead.
Interestingly, we dug into that deeper in this pulse study and asked, beyond thinking you don’t need it and beyond resale value – which were the two reasons why people give that they don’t do more to be energy efficient – beyond that what are the other reasons why you haven’t done more to be energy efficient? And the number one answer was “My home is comfortable enough, thank you very much,” by a third of the population. Yet then we gave them a list of comfort issues and like 84% of the people checked one of the boxes. “Yeah, I’ve got a room in my home that’s colder than the rest” or “I’ve got a lot of street noise coming in” or “It’s just kind of hot in here in the summertime” or “I feel a draft on my window.”
So the reality is 84% of us can admit to a comfort problem but we don’t think about it that way. So the aha! for me and an answer to your question is we can’t just message in terms of “Be more comfortable” or “Make your home more comfortable.” We’ve gotta get specific, and the messaging that resonates best is, a couple ideas: one is by making your home more energy efficient it will be a consistent, comfortable temperature throughout in every room. So get that granular with it. Also, by making your home more energy efficient you’ll be able to set your thermostat to a more comfortable temperature without making your utility bill uncomfortable. So talking about consistent temperature throughout the house and talking about the thermostat, that’s how you have to talk about comfort, which means that comfort is really about control.
Then the third kind of real aha! that was sort of new is the environment. Sixty-four percent of us as Americans believe that climate change is real and caused by man. That number’s been pretty steady for the last few years. What’s increased is that 51% of us today feel anxious about climate change and we’ve seen that number go up steadily. When we do one-on-one interviews and dig into that from a qualitative fashion we hear exactly what you would expect. People say things like, “You know, the weather’s just weird. Like all that flooding we had” or “The drought we had”. So people have an experience of weird weather and it makes them anxious. They get that something’s going on.
The irony is that the greenest of us, the ones of us who say yes, not only do I recycle religiously, I’ve moved onto composting, I take my bags to the grocery store, I have bought a hybrid car. Those people haven’t done anything to their homes because 94% of us do not understand the connection between climate change and the energy we use in our homes. Ninety-four percent of us have no idea that that’s the culprit. Most think it’s manufacturing and cars and trucks. Now what I don’t recommend doing is issuing messaging that says, “Oh my goodness, it’s about your house! You are screwing up the environment with your house!” You should not run messaging like that. The messaging that tested well is the idea of natural resource preservation. Hey look, we want to preserve natural resources, the best way to do that is to improve the efficiency of your home.
The environmental community tends to talk about the environment in terms of the future. “Here’s how awful it’s going to be in the future. Here’s the devastating effects in the future.” What plays best for conservatives is the good old days of the past. Think about Make America Great Again. It’s all about the good old days.
That’s the way to talk to conservatives about it and frame it in terms of natural resource preservation. “Man, you want to be able to do that with your grandkids. You want that same cold experience.” Let’s talk about how it used to be, talk about natural resources. That’s the way to get to ’em, in a “Hey, you know what? Let’s conserve natural resources. We all can do our part. Let’s make things as good as they used to be.”
Laura: Let me ask you a few follow-up questions. A lot of aha’s came through. In terms of, just for our audience just as a quick reminder, Cautious Conservative is one of the four personas that Fiveworx uses that comes directly out of the Shelton research that you’ve fielded for what? Now a dozen years, right?
Suzanne: Yes. Yes, that’s right.
Laura: How many Americans – it’s somewhere about eighty, ninety thousand Americans at this point?
Suzanne: That’s about right. Yep.
Laura: So these are pretty statistically significant and consistent personas that have shown up in your research for over a dozen years. The Cautious Conservatives are traditionally right-leaning, politically right-leaning?
Laura: And they have typically been about what? Control, managing their energy costs-
Suzanne: And comfort.
Laura: Sort of being the boss of their bill, right?
Suzanne: That’s right.
Laura: So it’s interesting, when did you field this study? Was it before the election?
Suzanne: Yeah. August of last year.
Laura: So that’s interesting. So there was a climb up towards this election craziness that happened and you were seeing that, even despite that, there’s still a strong pull towards the anxiety about the environment.
Suzanne: That’s right.
Laura: So that’s a bit of a sea change because what we’ve understood about Cautious Conservatives is that talking about climate change, talking about your carbon footprint, even referencing the environment a lot of utilities use language like “Save some green” and they use it as a double entendre, that that wouldn’t resonate well. And it sounds like to me you’re saying, no, don’t speak like that. It’s more of talk about preserving.
Laura: So it’s a different mindset of how you come at the messaging.
Suzanne: You got it. That’s exactly right.
Laura: Very interesting.
Suzanne: And it’s about the past, not about the future. So I would say with Cautious Conservatives I wouldn’t lead with messaging on the environment, I would still lead with “Be the boss of your energy bill.” “Be in control.” That’s still very much the driver but where we’re shifting is we think you can talk to them about the environment. It’s not about be green, don’t say, “Go green.” I still wouldn’t say “climate change” because you’re gonna have some people there that don’t believe it’s real. But I would talk about natural resource preservation and making things as good as they used to be. That’s how I would talk about it.
Laura: That’s very interesting. Let’s go back for a second to comfort. When you talk about the benefits of comfort and health but particularly comfort, how do you see that importance or that priority playing itself out in terms of different messaging for the different personas? So again, for the audience, Tell me a little bit, Suzanne, about what it means to talk about comfort to the different personas.
Suzanne: Comfort to a Cautious Conservative is more like a God-given right. “I’m gonna make it as comfortable as I want it to be. Screw you.” It’s an inalienable right. They should be comfortable in their homes. Comfort is more … it’s an expected, it’s a should, you should be comfortable in your home and you shouldn’t have to pay more for it. That’s how you would talk to a Cautious Conservative.
Now, a Concerned Parent, it’s more about keeping their kids cozy, happy, healthy, and safe. You want to wrap ’em in a big, warm, fuzzy blanket. You just want to hug ’em and love ’em and keep ’em safe. So that’s comfort for them and there will be anxiety for a Concerned Parent, particularly if a child’s room was colder than the rest of the house that Concerned Parent is gonna be worried about is everybody taken care of. So that’s how you talk about comfort to them.
A True Believer, I think you can do a bit of a double entendre with comfort for you and your house and comfort for the environment. It’s comfortable decisions, everybody gets to be comfortable.
For Working Class Realists I think it’s a little bit like Cautious Conservatives. It’s, “Man, you’re working hard, you deserve this. You deserve to be comfortable in your home. You work hard. You’re workin hard to make ends meet, you deserve to be comfortable in your home. You shouldn’t come home and suffer.”
Laura: So that’s really interesting, the whole shift away. What your research is showing is that our industry has been consistently pushing the save energy, save money message. It’s now become really low wallpaper message. People don’t respond to it, they don’t necessarily believe it anymore. And on top of it, you’re saying consumers don’t believe that their homes use as much energy as they actually do and they haven’t make the connection. You talked in previous years about the wake up call. Is there a wake up message that’s still needed there and how does comfort come into play and how does anxiety about the environment? Is there a confluence of all of those findings coming together where you still have to wake up the customer?
Suzanne: Absolutely. ‘Cause remember 80% of us don’t think we use more energy today than we did five years ago. Forty-nine percent think our homes are already energy efficient so there needs to be an umbrella regardless of segment. This is where a mass marketing campaign would come in. You need an umbrella message to wake people up to the fact that, wow, you do have an energy efficiency problem. But then once you’ve awakened them, people get frozen because 84% – let me check my numbers here to make sure – it’s about 84% of us say – yes – I have no idea what to do to be more energy efficient. So it’s a huge barrier. Eighty-four percent say they know little or nothing what to do to improve their home’s energy efficiency. So, you’ve awakened me and now you’ve just created anxiety for me because I have no idea what to do. You must then, in a segmented fashion, go, “Oh, okay, here’s what you should do.” Here are these five things that you should do and now let me tell you that in a language that resonates with you and taps into your deeper drivers.
So this is about reframing energy efficiency. I’ll tell you I’m someone who’s way above making ends meet and I’ve been sitting on two proposals for two years to improve the efficiency of my house. One of them is $7000 and one of them is $9000 and I’m totally frozen because I’m looking at that going, A) if I spend that money, am I gonna solve the comfort problem that I have in my house and B) am I ever gonna get myself paid back? It would be so much better if those contractors and the energy auditor from the utility had just said, “You know what? Don’t even worry about payback. It’s not ever gonna happen. You’re not ever gonna pay yourself back for this. And that’s okay because if you spend this money, you are gonna solve the comfort problem You’ll reduce your anxiety, you’ll increase cozy movie nights, you’ll have better family time, you will feel in control and that’s worth $7000 and we guarantee we’re gonna fix that.”
Laura: It’s really interesting, like you said, reframing energy efficiency. So the golden rule of selling anything is you have to understand what the customer’s problem is and solve their problem-
Suzanne: That’s right
Laura: -and this industry for pretty much forever has talked about it in terms of what they need to accomplish. They need to save kWh-
Suzanne: That’s right
Laura: -or they need to save therms,
Suzanne: That’s right. And we get a lot of pushback. I’ve been saying this a lot for the last six months and I’m getting pushback. And one of the valid pieces of pushback I get from some of our utility clients is “Well, you know what, when we put banner ads out there or search ads out there that say ‘Save money on energy’ people click on them.” Hell yeah, they do! Sixty-one percent of people when we say, “Why would you do energy efficient things?” they say, “To save money.” It is the rational, logical answer. But that’s part of the problem with it is then, it’s the rational, logical answer and then once you get down the funnel working on it you go, “I don’t know if it’s the rational decision because I don’t know if I actually will save money. I’m not sure I believe it.” So yeah, of course people are going to click on it I bet we would find there’s a big gap between the click through and the buying,
Laura: I think the biggest proof of that is the relatively low conversion rate between home audits and people actually undertaking the measures, right?
Laura: So that’s the equivalent of clicking on the banner ad. They see the information about the home energy audit which touts, “You’ll save money in your home!”
Laura: Now some utilities have begun to expand their messaging and talk about comfort, reducing ice dams, and other benefits to the home but it’s still primarily a “Save money and, here, we have rebates available.”
Suzanne: They might spend the money if they knew, “You know what, you’re gonna be able to get a 10% premium when you sell this house” or “You know what, there’s allergies and asthma problems your kids have and you’re not gonna have those anymore” or “You know how uncomfortable you are in some rooms and you have to run a space heater or get under blankets? You’re not gonna have to do that anymore.” Those are things people will pay money for. So what you need to do is sell the value that people want to buy as opposed to shoving the feature that you think is important because it matters to you.
Laura: Exactly. And then when you talk about comfort and value that the customer is looking for and then you pair it with rebates, the rebates become really true help incentive to help close the sale.
Suzanne: And that’s how they should be. Rebates should be a sale closer, they shouldn’t be the leader.
Laura: Exactly. One piece of information, one trend in your research I think I saw was that you’re still seeing a decline – probably for many of the reasons you cite – in people undertaking energy efficient actions. It’s declining every year but when I looked at your research it says five is still the magic number. So can you tell me just a little bit about what you’re seeing in the research in terms of declining activity but where that tipping point still is for consumers?
Suzanne: Yep. It really hasn’t changed in the last five or six years of looking at this. And the insight is: about half of us can point to “I’ve done one, two, or three things to make my home more energy efficient” and again, most of those people say, “My utility bill went up. I am not satisfied. I’m done with energy efficiency. It doesn’t work. I’m off the train.” A very tiny percentage – and I’m sorry I’m not remembering how tiny it is – but it’s a small percentage of Americans who say, “I’ve done five things to make my home more energy efficient.” Those people consistently year over year over year, if we can get ’em to five, year over year they say, “I saw the savings I expected. I’m happier with my utility and I’m gonna keep going.” We’ve just not seen that change over the last several years.
The problem is we’re not getting people to the five. We’re staying pretty steady on those numbers so there’s this chasm between three and five. The way I often describe it is it’s like a weight loss program, right? If you’re on a diet for week and then you step on the scale and you don’t see any pounds lost, you feel sad and you think, “Okay, I just need to try harder. So I’ll try again another week.” So you do it another week, you step on the scale you’re all excited and I haven’t lost any weight. You’re like, “Damn it! All right, I’ll give it one more week.” You do that third week and if you don’t see any weight loss you’re like, “Screw it! I am eating the chocolate cake.” So that’s what’s happening when people do the one, two, and three energy efficient things. It’s like, “Well, I’m not seeing any savings. I’m done. Why mess with this? I’ll just pay the utility bill.” So people hit that wall at three.
That’s where a tool like Fiveworx can be immensely effective is continuing to encourage people, again, speaking to that deeper driver, reminding them it’s not just about savings it’s about something else. If we can reframe the savings message: you are making your home more comfortable, you are making it healthier, you’re solving whatever their issue is, keep focused on that then you can move them past three to four and ultimately to five. If we can get ’em to five that is the magic number. They’ll still keep on going. Utilities don’t need to spend any more money on it. At that point they’re converted, they’re gonna keep going, they’re gonna do it.
Suzanne: Yep. I think what’s changing is we now have permission to talk about natural resource preservation. We now need to talk not just broadly about comfort we need to talk specifically about keeping room temperature consistent, setting your thermostat to a desirable temperature, we gotta get a lot more granular about that messaging. Quality, there’s another thing we’re hearing, that about a quarter of the population believes an energy efficient home is a higher quality home and ultimately that is what people want. So you break that down by segment and look at which segment really cares about that and let’s speak to that. Yes, we are constantly peeling back layers of the onion and getting ideas about, ooh, now this a great message to deliver to a Concerned Parent, this a great message to deliver to a Working Class Realist. That’s the beauty of doing these studies every year is we get to keep gathering depth in that data.
Laura: Without revealing any secret sauce, has this year’s study and the findings from this year’s study given you some inklings of what you want to explore further in future studies, in next year’s study? Are there things that popped up that you think you might want to explore more deeply next year? Or is that a wait-and-see still?
Suzanne: It’s interesting. I had a conversation with Susanna who’s my Director of Insights yesterday and basically I was probing on the environmental piece beyond just, hey, let’s preserve natural resources, what’s the way to really get people to take action on the environment because we’ve got that problem across the board. Even though folks say I want to be seen as someone who does the right thing for the environment and I am taking a few actions, we still haven’t quite mainstreamed this yet. So how do we get people to take action on the environment? And Susanna said something interesting, she said, “I think there’s a question we haven’t figured out yet. There is a question or a line of questioning that we’re just not asking yet and we’ve got to figure out what that is.” So that’s the cliffhanger I have for you. In her mind, we haven’t quite asked the right question to get at aha! what’s really in people’s way? What’s really keeping them back and what is it we can say to get them over that or do to get them over that? So I’ll think we’ll be exploring that in the next few months before we field the next energy pulse in August.
Laura: Good. Well, I’ll have to come back and talk to you again about what new insights you’ve been able to pull from your next study. the next thing I want to talk to you about at another time is the kinds of studies you’re doing on the business side with your B2B pulse study, the trends you’re seeing in that research and how that impacts how you talk to different business customers about energy efficiency and a whole host of other products, programs, and services.
Suzanne: Great. We’ve got some really good insights there. Here, I’ll give you one tease. Seventy-nine percent of business decision makers think their facilities are energy efficient, thank you very much.
Suzanne: Literally, you are facing a populace who thinks they don’t need what you’re selling.
Laura: So it requires creative thinking.
Suzanne: And segmentation.
Laura: It does, indeed. Thank you for that. Thanks again Suzanne Shelton, president and CEO of the Shelton group. Thank you for your time today and we look forward to future insights from you.
Suzanne: Yay! Thank you!
Laura: Thank you.
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