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1
PulseEnergy.com
Six Tips for Outstanding Small Commercial Behavioral Programs
January 23rd, 2013
2
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
3
Taking your questions
Minimize control panel
Type in questions
4
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
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: [email protected]
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