Six tips for outstanding small commercial programs

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PulseEnergy.com

Six Tips for Outstanding Small Commercial Behavioral Programs

January 23rd, 2013

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Our background and approach

Six tips: challenges and solutions

• Split incentives

• Diversity of the customer base

• Busy customers

• Energy costs not being a priority

• Franchising dynamics

• Measuring and verifying savings

Q&A

Today’s agenda

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Taking your questions

Minimize control panel

Type in questions

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Our background

Small to Medium Business Owners and Employees

Energy Professionals and Experts

Building Occupants and the Public

Program Administrators

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Today’s focus

Small to Medium Business Owners and Employees

Energy Professionals and Experts

Building Occupants and the Public

Program Administrators

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SME market: 93% of commercial accounts

Source: EIA CBECS Database.

7%Large Commercial (> 500 MWh/yr)

Small-Medium Business (< 500 MWh/yr)93%

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Goal: Achieve efficiency targets and increase customer satisfaction

• Give SMEs valuable insight into their consumption

• Cover a wide audience through personalized, low cost engagement

• Use multiple channels to break through the noise

• Apply our deep knowledge of the commercial sector

Our approach

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Owen Rogers

Product Lead – Pulse Check

• owen.rogers@pulseenergy.com

Today’s speaker

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SME Challenges

What works for large commercial doesn’t work for SME

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Diversity: Challenge

One engagement strategy does not fit all

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Diversity: Solution

• Segmentation by more than 150 4-digit NAICS categories

• Additional sub-categorization by size and type

• Targeted messaging that aligns with organization’s operating goals

Segment and sub-categorize for targeted communications

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Busy customers: Challenge

• 63% work more than 40 hours per week

• 10% work more than 70 hours per week

Source: 2011 Small Business Review, Manta.com

Small business owners work long hours

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• Push-based communication

• Focus on low effort, high value steps

• Respect seasonal trends

• Focus on measures that do not impact core business (e.g. out-of-hours consumption)

Busy customers: Solution

Reduce barriers to engagement

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Energy costs not a priority: Challenge

Source: Characterization and Analysis of Small Business Energy Costs, sba.gov, 2008.

BusinessCategory

Energy Costsas % of Revenue

441 - Motor Vehicle & Parts Dealers 0.3%

443 - Electronics & Appliance Stores 0.6%

445 - Food & Beverage Stores 2.1%

451 - Sporting Goods, Hobby, Book, & Music Stores 0.8%

541 - Professional, Scientific, & Technical Services 0.1%

Energy costs are perceived as a cost of doing business

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• Connect energy costs to profit margin

• Frame issue in terms of “energy waste”

• Apply behavioral psychology and behavioral economic models

• Leverage normative comparisons, peer recognition and competition

Energy costs not a priority: Solution

Motivate by framing the issue

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Split incentives: Challenge

Source: Quantifying the Effects of Market Failures in the End-Use of Energy, OECD/IEA, 2006.

Can Choose Technology

Cannot Choose Technology

Direct energy payment No problemEfficiency problem

(net lease)

Indirect energy paymentUsage and

efficiency problem(gross lease)

Usage problem(gross lease)

Up to 90% of commercial leased spaces face split incentive barriers

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• Encourage communication between groups

• Focus on mutual benefit

Split incentives: Solution

Engage both landlords and tenants

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Franchising: Challenge

• Corporate policies may restrict operating procedures and types of retrofits that can be performed

Over 900,000 US businesses are franchises

Source: International Franchise Association

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Franchising: Solution

• Focus on non-customer facing areas

• Recognize common corporate policies

• Opportunity as owners want to benchmark their businesses against similar franchises

• Support for multi-site accounts

Recognize where the opportunities lie

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Large behavioral programs rule out common M&V methods

Measurement and verification: Challenge

• Costs of conducting energy audits for the entire segment is prohibitive

• Individual business baselines are too variable

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Measurement and verification: Solution

• Apply experimental design to large SME population

• Use an opt-out program

• Cluster accounts with similar temporal variance

Employ statistical M&V approach to track savings

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• Segment and sub-categorize for targeted communications

• Reduce barriers to engagement

• Motivate by framing the issue

• Engage both landlords and tenants

• Recognize where the opportunities lie in franchises

• Employ statistical M&V approach to track savings

Key takeaways

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For further questions or to arrange a demo, please contact us at:

Pulse Energy

• Phone: (877) 331-0530

• Email: info@pulseenergy.com

Thank you!

Meet up with us at…

AESP National Conference, Orlando, Jan 28-31EUEC, Phoenix, Jan 28-30DistribuTECH, San Diego, Jan 29-31Tech Advantage, New Orleans, Feb 19-20

Q&A