SMUD’s SmartPricing OptionsMarketing Strategy

Jennifer Potter

July 31, 2014

Powering forward. Together.

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Marketing objectives

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Marketing objectives and strategy

• Encourage SMUD customers to participate in a SmartPricing Options plan by educating them on – (1) the rate and time-variant pricing and– (2) the benefits of reducing their energy use during the

summer’s critical peak periods.

• Develop a portfolio of materials to support each combination of recruitment strategy, rate design, and technology offer. – Portfolio will educate customers on the foundational

concepts of:• time-variant pricing• challenges caused by peak demand• how peak consumption impacts customers and the environment

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What customers want:

• Specific information about peak hours, examples of ways to conserve electricity.

• Industry terms explained clearly (e.g., kWh, peak hours) and examples that help them understand the possible savings involved.

• Low-cost or no-cost measures that are easy to implement.

• Messages that have a friendly tone and easily connect conservation with saving energy and money, and helping the environment.

• Realistic situations and images in materials. Locations that appear to be in or around Sacramento.

Marketing – recruitment

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Recruitment strategy

• Marketing activities included a mix of channels and tactics and a phased approach:– Phase 1: Pre-recruitment education – Phase 2: Recruitment– Phase 3: Recruitment & notification

Pre-recruitment education campaign - 2011 Print ad

Web ad

Savewithsmud.org

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Recruitment campaign

•2011 Recruitment –• direct mail• web & print ads• microsites

•2012 Recruitment & notification – • direct mail• web & print ads• microsites• door hangers• outbound calling

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Opt-in brochures

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Microsites

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Follow-up postcards

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Mass media web and print ads

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Mass media campaign web landing page

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Door hanger campaign

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Opt-out brochures

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Recruitment channels and enrollment

Outbound Calls Direct Mail Contact Center and My Account0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Actual

Planned

Marketing - Retention

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Retention & education strategy

To provide participants with tips and tools on how they can manage their energy use to be successful on these rates.

Channels & Tactics • Welcome packet• Social media

– Facebook groups for each combination of recruitment strategy, rate design, and technology offer

– YouTube– Pinterest

• Sweepstakes & giveaways• Welcome back kit (for second summer)

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Welcome packet

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Yesterday’s Data Today

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Educational videos

Learn more about how time-of-use electricity pricing works.

Learn how to manage your electricity use with the charts in My Account.

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Online energy saving tips

Staying cool.

Air conditioners are one of the biggest energy users during hot summer days. Reduce your use and set your thermostat to pre-cool your home before 4:00 p.m. Then turn your thermostat up a few degrees higher from 4:00 p.m. to 7:00 p.m. and use fans to help cool your home.

Interactive charts

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Facebook

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Facebook contests

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Pinterest

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Electricity Use Display postcard

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Infographics

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Educational game

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Retention goals

• Over 100% of our retention goals in all but one treatment group.

• Most drops are due to customer moves.• Attrition is at 8% for opt-in groups and

10% for opt-out groups.

Customer Satisfaction

Customer satisfaction is very high for all pricing plans and there is no real difference across plans

Standard

Rate

Default

CPP

Default

TOU-C

PP

Default

TOU

Opt-i

n CPP

Opt-i

n TO

U0

20

40

60

80

10080.3

87.1 86 84.4 89.4 87.1

19.712.9 14 15.7 10.6 12.9

How satisfied are you with your current electricity pricing plan?

Very or Somewhat Satisfied Very or Somewhat Dissatisfied

Pe

rce

nt

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Customers on the standard rate are less likely to think their pricing plan is fair than customers on any of the time based pricing plans

Standard

Rate

Default

CPP

Default

TOU-C

PP

Default

TOU

Opt-i

n CPP

Opt-i

n TO

U0

102030405060708090

100

44.4

61.8 57.7 56.266.2 66.1

1910.6 11.9

16.69.6 11.7

My current pricing plan is fair

Strongly or Somewhat Agree Strongly or Somewhat Disagree

Pe

rce

nt

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Customers on the standard rate are much less likely to think their pricing plan provides them with opportunities to save money

Standard

Rate

Default

CPP

Default

TOU-C

PP

Default

TOU

Opt-i

n CPP

Opt-i

n TO

U0

20

40

60

80

100

33.3

61.4 57.7 59.5

76.5 74.1

23.6

10.3 12.1 15.29 9.3

My current pricing plan provides me with opportunities to save money

Strongly or Somewhat Agree Strongly or Somewhat Disagree

Pe

rce

nt

75% of opt-in customers feel that their pricing plan gives them opportunities to save money.

There are no meaningful differences in responses between customers on CPP or TOU plans.

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Roughly half of default customers and more than 70% of opt-in customers think SMUD should offer their plan to all customers

Default CPP Default TOU-CPP Default TOU Opt-in CPP Opt-in TOU0

10

20

30

40

50

60

70

80

90

100

58.6

4953.7

70.7 72

2.6 3.6 3.6 2.2 2.5

SMUD should be offering the pricing plan I am on to all customers

Strongly or Somewhat Agree Strongly or Somewhat Disagree

Pe

rce

nt

Almost no one feels somewhat or strongly that the plan should not be offered to others.

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Three quarters of opt-in customers and roughly half of default customers indicate they would like to stay on their pricing plan

Default CPP Default TOU-CPP Default TOU Opt-in CPP Opt-in TOU0

10

20

30

40

50

60

70

80

90

100

54.947.1

51.4

76.1 74.7

5.79.6 8

4.7 5.1

I want to stay on my pricing plan

Strongly or Somewhat Agree Strongly or Somewhat Disagree

Pe

rce

nt

5 to 10% of respondents said they somewhat or strongly disagree with this statement.

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Lessons learned

• On Facebook, customers are more responsive to simple Q&A type contests.

• When customers understand goals, it increases satisfaction.

• Focus on the benefit to the customer. • Eliminate the Welcome Back letter and just send the

Welcome Back Kit. The letter generated drops from the program.

• Boost website traffic by starting the summer with a big promotion, like The Home Depot Grill Sweepstakes.