Newly deregulated electric and gas utilities that never had to sell their services in a competitive environment are beginning to learn the ins and outs of building and maintaining marketing databases. And as they compete for customers in alien territories, strange new terms like “lifetime value” and “predictive modeling” are becoming part of their daily marketing vocabulary.
“These former utilities have to develop relationships with their customers, and that’s something they never really had to do before,” says Roger Marcus, a senior consultant at Nykamp Consulting Group in Downers Grove, IL.
“Just throwing a marketing database at the problem isn’t going to solve it,” Marcus warns.
Marketing From the Ground Up.
Because this is virgin territory, power companies lack response data and therefore cannot engage in such exercises as predictive modeling and building lifetime value profiles. Instead, they have to start from the ground up by projecting power usage in given areas and overlaying their customer lists with lifestyle information compiled from surveys.
Just as with telecommunications companies, brand differentiation is paramount to this group. Marcus points to the proliferation of 10-10-type long-distance services as an example.
“Who can remember which companies they are affiliated with?” he asks.
Attitudinal surveys can also play a role.
“Some customers might not want to do business with utilities with bad reputations as polluters and may want more environmentally friendly companies,” he suggests.
One company marketing electricity far from its home base for the past year is DTE Edison America, Ann Arbor, MI. According to vice president of marketing Vicki Campbell, DTE has made inroads in both the greater Philadelphia and Pittsburgh markets through direct mail, telemarketing and Web marketing, on top of general branding ads and public relations.
Working with a database of several million households in both cities, DTE bought data to help better identify good prospects, some of which included households with children.
Why? “Because they use a lot of [electric-powered] gadgets,” she says.
From these efforts, Campbell believes she gained a lot of useful insight that can be applied when DTE kicks off electricity marketing efforts later this year in Michigan and New York state.
Even so, she admits, “there’s still a tremendous amount of education and awareness needed.”
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