Younger consumers today are often touted as a tech-savvy and eco-friendly cohort, which would seemingly make them a perfect fit for innovative, tech-driven utility programs and services that deliver environmental benefits. However, many of these younger consumers are not ready to engage with their electricity providers in these offerings.
When we updated our consumer segmentation in the summer of 2022, five new consumer segments emerged, ranging from the Green Pioneers, who are the “sweet spot” for innovative utility offerings, to the Comfort Seekers, who are primarily interested in their personal comfort and are unlikely to engage in energy-saving programs and services.
Between these two poles are three other segments, including the Simply Sustainable, the Trusting Traditionalists and the Connected Pragmatists, a younger segment of consumers that’s not as engaged as the Green Pioneers today but that holds significant potential if they’re approached with messaging and programs that resonate with their lifestyles.
Representing 22 percent of the population (the second-largest segment), the Connected Pragmatists segment features many younger renters that are comfortable with technology. When it comes to smart home technology, their ownership rates are similar to – or even higher than – the Green Pioneers; however, they’re less likely to use these devices for energy-related purposes.
When asked whether they’ve taken actions to manage their electricity usage at home (such as installing energy-efficient lighting, participating in a demand response program or weatherizing their homes), the Connected Pragmatists were generally less likely than other segments to have participated. Yet, when we look at interest, they’re right behind the Green Pioneers.
This high interest combined with their high level of smart home technology ownership makes them a great target for bring-your-own-device programs or other renter-friendly programs. This group – who have the lowest levels of trust and satisfaction when it comes to their electricity providers – will, however, require relevant programs and carefully tailored communications to get them engaged.
Partnerships are one way to identify and meet these consumers where they are. Consider developing a partnership with a service consolidator, such as Allconnect. It may be easier for the consolidator providing multiple service enrollments to ask questions like “Are you renting your home?”, “Do you own a smart speaker?” or “Is your home equipped with a smart thermostat?” And the answers to these questions may allow the service consolidator to complete enrollment in a tech-driven program or suggest an alternative rate plan.
There also may be opportunities to partner with landlords and home goods/home improvement retailers (e.g., Home Depot, Lowes and Wayfair), and targeted online ads or a welcome package given at move-in could be helpful if they offer carefully selected options and programs of interest to renters.
When it comes to messaging, two attributes should be brought to the forefront: technology and financial savings. Tech-forward offers where these consumers can be the “first to try” or can expand the use of an existing device (e.g., a smart speaker) will be attractive. Messages that help them connect their lifestyle to their energy use will be valuable – but keep the messages short and sweet.
Personalizing savings – such as an energy savings calculator that allows specific inputs based on lifestyle, priorities, ownership of other devices and more – may also be appealing to the tech-savvy and price-sensitive characteristics of the Connected Pragmatists. Messages around “leveraging what you already own” or “put your smart speaker to work for you” are likely to appeal.
Southern California Edison’s Energy Expert Alexa Skills pilot, which allows customers to use their smart speaker to learn about their energy use, is a great example of a program that could appeal to the Connected Pragmatist segment. This pilot program uses consumers’ existing technology and enables them to get personalized answers to their energy-related questions in an engaging, fun manner via Alexa.
SCE’s target for this program is the group most likely to already own and use a smart speaker, and the Connected Pragmatists are exactly what they’re looking for. Their comfort with technology makes them likely to enroll in a pilot program and lead the way with a technology solution. They can also provide feedback to improve the app, making it a win-win for both consumers and the electricity provider. Finally, the app is portable, so wherever these young renters move next, their Energy Expert comes along.
Despite their relative lack of engagement today, the Connected Pragmatists have many of the right attributes to be empowered, educated and engaged energy consumers – not in the future but today. Their lack of an existing relationship with their electricity provider is primarily what’s holding them back, but providers have a clear path to overcoming this obstacle through relevant programs, personalized offers and messaging, and transparent benefits.
To learn more about SECC’s five consumer segments and how to successfully engage them, read the “Segmentation in Action: Advancing the Customer Relationship” paper here.