Small-and-medium businesses (SMBs) employ about half of all Americans and account for 44 percent of U.S. economic activity. However, when it comes to utility programs and services, SMBs are often considered to be the “forgotten middle” between residential and larger C&I customers. The large number of SMBs, their varied energy profiles, diverse motivations and other factors make them a challenging segment for electric utilities to understand – let alone engage.
In 2018, the Smart Energy Consumer Collaborative (SECC) published the “Understanding Your SMB Customers: A Segmentation Approach” report to provide the industry with a better understanding of who these often overlooked customers are. For this report, SECC conducted an in-depth survey of over 1,000 energy decision-makers at SMBs and developed five distinct segments based on energy-related values, behaviors and motivations. This first-ever SMB segmentation framework can help stakeholders connect these businesses with solutions that improve their energy efficiency and help meet their specific business needs.
Throughout the COVID-19 pandemic, SMBs have been hard hit by reductions in revenues, and many report being uncertain about the future. Smaller businesses are often fixtures in local communities, and it’s more important than ever than industry stakeholders work to understand the needs of SMBs and help connect them with energy-related solutions that work for their business operations and alleviate some of the financial pressures stemming from the pandemic.
Here are two electric utilities that have responded to the pandemic with adjusted programs and messaging to help SMBs resume their business operations:
National Grid focuses on digital programs and a new marketing strategy
Through its Small Business Services program, National Grid offers SMB customers a no-cost, on-site energy assessment that includes site-specific proposals for improving energy efficiency and turnkey installation of new measures. Under this program, National Grid pays up to 70 percent of the installation and equipment costs, and customers can pay the balance on their monthly bills – or in one payment with a 15-percent discount. Upgrades include energy-efficient lighting, lighting occupancy sensors, walk-in cooler efficiency measures and site-specific custom projects.
Once the COVID-19 pandemic hit National Grid's service territory in March, the utility immediately put the Small Business Services program on pause, including the “See More Possibilities” marketing campaign that had been developed for the year. With SMBs struggling with how to adjust their business operations, National Grid wanted to be sensitive of that fact and not overload them with information in the initial weeks of the pandemic.
When marketing for the program resumed, National Grid adapted messaging in response to the changing economic environment and the needs of their SMB customers. The utility developed new online resources to house all of the COVID-related information and pointed their SMB customers to these pages. The new messaging focused on financial resources and payment assistance for targeted segments; digital options that do not require an in-person visit from a vendor or technician; and energy-efficient actions that business could take as they re-open.
In late April, National Grid transitioned their on-site energy assessments to virtual audits, and from late April to late June, they conducted 135 virtual audits for SMB customers. During this time, National Grid also began thinking about existing digital resources that they could reposition for SMB customers in the context of COVID-19. This included an online retail marketplace with energy-efficient products (often with instant rebates). As businesses began the early stages of reopening, National Grid developed new marketing collateral that featured business owners and customers wearing masks and included messaging that directly related to opening with safe and energy-efficient business operations.
Puget Sound Energy increases rebates for energy-efficient measures
Washington was one of the early hotspots for the COVID-19 pandemic in United States, and the state’s largest utility, Puget Sound Energy (PSE), began a work-from-home policy for most employees on March 4. By mid-March, PSE halted all on-site work for its energy efficiency programs and suspended its existing marketing for its SMB programs. In this new normal, PSE started developing online resources to help small business customers navigate the shutdown, including energy-saving tips; links to state, federal and public health resources; and information about the shutoff moratorium, budget options, payment plans and other financial resources.
In early June, as businesses began the first stages of reopening, PSE sent an email to its SMB customers with information on significant increases in incentives for the Business Lighting program. Through September 1, all of PSE’s Business Lighting incentives are at least 50 percent higher – covering up to 70 percent of the project costs. For tubular LEDs (TLEDs), which tend to be very popular with small business customers, PSE increased the rebates 100 percent, going from $2 per lamp to $4 per lamp.
PSE also adjusted its Small Business Direct Install program in response to the COVID-19 pandemic. Similar to National Grid’s program mentioned above, this program offers free energy assessments and provides suggestions for no-cost and low-cost upgrades. With the suspension of in-person work, PSE moved this program to a virtual assessment with an emphasis on steps that business owners could take in the short term to reduce energy. As of late June, PSE is waiting on final approval to begin working in the field again for limited projects. The phased-in approach would begin with exterior and vacant spaces where there is little risk of person-to-person contact, and PSE has accordingly adjusted incentives for exterior fixtures from a 30-percent co-pay to completely free.
Traditionally, PSE has not done much marketing for the direct install program. Since there are so many opportunities for free products, word-of-mouth has been typically been effective for getting the word out in the local business community. However, during the COVID-19 pandemic, PSE is increasingly utilizing digital marketing channels, particularly through partnerships and webinars with municipalities and chambers of commerce. PSE is also increasing personal email outreach to customers about the options available to them.
Conclusion: Utilities can help with small business recovery
The COVID-19 pandemic has transformed our day-to-day lives over the past several months, and smaller businesses – including restaurants and retail shops – have been particularly affected by the economic slowdown. Under normal circumstances, these customers will often greatly benefit from energy-efficient measures and outreach that specifically addresses their needs and challenges. However, during the COVID-19 pandemic, there’s an even greater need to help these customers reduce their energy bills, and by supporting these customers, utilities can make an impact in facilitating economic recovery in their communities, while improving SMB customer satisfaction and engagement.
To learn more about the impact of COVID-19 on the energy industry and ways stakeholders can assist SMB and residential customers, visit our COVID-19 Resource Library.