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Marketing 101Components of a Complete
Marketing Program
Bryan K. SingletaryPresident
Practical EnergiesTampa, 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 not SELLING. Is not SPONTANEOUS. Is not One-Size-Fits-All. Is not WARM FUZZIES!
Marketing Is
Is MEASURABLE. Is REALISTIC. Is OBTAINABLE. Is GOAL ORIENTED. Is 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!
CUSTOMER
Marketing Planning Flowchart
Customer focused
Analyze market Assess situation Analyze impact Analyze risk Action plan Reality testing Evaluation
A good marketing plan need be merely four pages long
1. Quantifiable goals and target audience for each one.
2. Specific action steps & who’s responsible for each one
3. The Budget (include revenue projections, sales cost)
4. 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 SegmentationCustomer Segmentation Approaches:
Traditional Vs. Market-Based
Customers Traditional Approach Market-Based Approaches
Residential
Commercial,Agricultural,&Industrial
• Type of dwelling• Age & income level• Rate class• Consumption level
• SI C code• Business size• Building type• Mix of end-use
equipment
• Needs & expectations• Preferences & buying patterns• Other
• Business strategies• Business operations• Energy operations• Other
Commercial Segmentation
Office Retail Grocery Restaurant
Hotel/Motel Institutional
Schools and Universities
Medical
Data and Information ...What do you need?
Data must be able to answer fundamental market questions about: Your utility, Your customers, Your competitors and their customers, Your 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
Residential Space conditioning Water heating Lighting Refrigeration Other
Commercial and Industrial Lighting Space conditioning Motor Water heating Cooking Other
Appliance saturations Potential new end-
uses How and when are
they used Large energy
consuming end uses will drive kWh sales and marketing programs
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-DANDYMARKETING, 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 planto 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 Money & jobs stay here
2. Public power put consumers first3. Public power systems are
responsive to local needs.4. Economic participation5. 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!
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