building performance institute webinar understanding home performance buyers &...

Understanding Home Performance Consumers: Cost Effective Ways to Discover and Reach Your Target Audience

Building Performance InstituteGoldstar Webinar Series

Peter Troast, Founder & CEO, Energy Circle

May 23, 2017

5/23/17

Founder/CEO of Energy Circle

Linked In: Peter Troast

Twitter: @EnergyCircle

G+: Energy Circle

Facebook: Energy Circle

Volunteer/Pro Bono

Efficiency First

Home Performance Project

Home Performance Coalition

1000 Home Challenge

CHERP

2

peter@energycircle.com

5/23/17

340+ Home Performance Businesses builders, remodelers, auditors/raters, HP contractors, HVAC, non-profits, architects

49* States

3.2 Million Web Visitors

Thousands of Leads

64,000 Tracked Search Terms in HP

Lots and lots of experiments

$1+ Billion in High Performance Building Work

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The Energy Circle Sandbox

5/23/17

HOW PEOPLE BUY HOME PERFORMANCE

UNDERSTANDING SEGMENTATION BASICS

THE VALUE OF SEGMENTATION

A LOOK AT SEGMENTATION METHODOLOGIES

PRACTICAL MARKETING TACTICS YOU CAN IMPLEMENT

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What We’ll Discuss

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Segmentation Benefits & Challenges

“Market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics.”

Wikipedia

5/23/17

• Forces marketing focus & choices, but it’s not forever

• Can sometimes overcomplicate marketing

• Always results in less expensive, more effective marketing

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Segmentation Benefits & Challenges

“Market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics.”

Wikipedia

HOW PEOPLE BUY HOME PERFORMANCE

(they don’t. you sell it)

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Whole House Home

Performance

How Much Demand for This?

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Whole House Home

Performance

Heating

Cooling

Indoor Air

Insulation

Health

Connected Home

Energy Audits

WindowsSolar

Air Sealing Lighting

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Air Conditioning

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Air Conditioning vs Furnace

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Air Conditioning vs Furnace vs Insulation

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Home Performance vs AC/Furnace/Insulation

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Whole House Home

Performance

Heating

Cooling

Indoor Air

Insulation

Health

Connected Home

Energy Audits

WindowsSolar

Air Sealing

Program Incentive

Climate Change

the Jones’

Want Solar

Home Value

Green Bling

Remodel

Efficiency

Lighting

Windows Leak

Health Problem

Comfort Problem

Energy Cost

Energy Audit

Mold Issue

Lighting

Cool Equipment

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Whole House Home

Performance

Heating

Cooling

Indoor Air

Insulation

Health

Connected Home

Energy Audits

WindowsSolar

Air Sealing

Program Incentive

Climate Change

the Jones’

Want Solar

Home Value

Green Bling

Remodel

Efficiency

Trigger

Servi

ce

Lighting

Windows Leak

Health Problem

Comfort Problem

Energy Cost

Energy Audit

Mold Issue

Lighting

Cool Equipment

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Fundamentals of HP Marketing & Sales

EGIA/BPI

WHOLE HOUSE HOME PERFORMANCE

AC RepairSpray Foam Asthma Rebate

IAQ New FurnaceClimate Change Heat Pump

Sick Child

MoldCold Room

Energy Cost

MORE COMPREHENSIVE JOBS

Fujistu

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Whole House Home

Performance

Windows Opportunity

Cost to Acquire

5/23/17

Health

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Whole House Home

Performance

Cost to Acquire

5/23/17

Cost to Acquire

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Whole House Home

Performance

Climate Change

5/23/17

Conversion from Single Interest to

Whole House Perspective is

Critical

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Home Performance’s Key Success Factor

TARGETING ONLY THE BEST PROSPECTS

(this is Segmentation)

THIS IS SEGMENTATION (where marketing planning begins)

EGIA/BPI

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Market

Customers

Focusing Your Marketing Efforts

Best Targets Cheaper to market to

Less waste

More likely to convert

Shorter sales cycle

Lower Cost per Acquisition

Best Targets

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Segmented Marketing is Cheaper

$1.74 million @ 7500/job

Tactics Impressions/Visits CostConversion

Rate # of LeadsConversion

Rate QuotesConversion

Rate Jobs CPA

Community 1000 500 10.00% 100 50% 50 50% 25 $20

Email 12000 1000 2.50% 300 25% 75 50% 38 $27

Open Houses 75 500 35.00% 26 75% 20 90% 18 $28

Past Customers 250 500 5.00% 13 90% 11 90% 10 $49

Referral Program 750 2500 25.00% 188 25% 47 75% 35 $71

Social Media 25000 1500 0.10% 25 75% 19 90% 17 $89

Paid Web 10000 3000 2.50% 25,000.00% 25% 63 50% 31 $96

Organic Web 15000 3000 1.00% 15,000.00% 25% 38 75% 28 $107

Directories 5000 500 0.25% 13 35% 4 50% 2 $229

Direct Mail 8000 2800 0.25% 20 50% 10 75% 8 $373

Public Relations 250000 3000 0.02% 38 35% 13 50% 7 $457

Print Ads 100000 3500 0.05% 50 25% 13 50% 6 $560

Trade Shows 250 4000 10.00% 25 50% 13 50% 6 $640

Lead Gen 1750 50 15% 8 20% 2 $1,167

TOTAL 25050 204 $293

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04101zip code

Segmentation is Rarely Perfect

Homeowners

HighIncome

Ask Yourself: Does the target audience dominantly skew towards my best prospects?

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GeographicRegion, town, neighborhood

Demographic age, gender Psychographicpersonality, values, attitudes, interests, lifestyles Behavioralbased on actions, such as watching a video, or opening an email

Housing Typeage, basement, known issues

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Types of Marketing Segmentation

EGIA/BPI

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for marketing Segmentation is meaningful only if there are practical, cost-effective ways to use it for targeting

SEGMENTATION APPROACHESIN ENERGY EFFICIENCY

5/23/17

Green Advocates "care about energy-saving behavior as a goal in its own right." Motivated by environmental factors. About 20% of the total population.

Disengaged Energy Wasters"don’t care about saving energy or saving money." Not interested in the environment, and not interested in saving money. 20%.

Traditionalist Cost-focused Energy Saversmotivated entirely by cost savings.

Home-Focused Selective Energy Saversmotivated primarily by home improvement, which may involve a cost-savings or technological element.

Non-Green Selective Energy Savershappy to improve their homes' energy efficiency, as long as they don't have to think about it. "Set it and forget it."

*last 3 = 60%, not broken down

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McKinsey Segmentation

Sizing the Potential of Behavioral Energy-Efficiency Initiatives in the US Residential Market. McKinsey. November 2013

5/23/17

Green Advocates "care about energy-saving behavior as a goal in its own right." Motivated by environmental factors. About 20% of the total population.

Disengaged Energy Wasters"don’t care about saving energy or saving money." Not interested in the environment, and not interested in saving money. 20%.

Traditionalist Cost-focused Energy Saversmotivated entirely by cost savings.

Home-Focused Selective Energy Saversmotivated primarily by home improvement, which may involve a cost-savings or technological element.

Non-Green Selective Energy Savershappy to improve their homes' energy efficiency, as long as they don't have to think about it. "Set it and forget it."

*last 3 = 60%, not broken down

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McKinsey Segmentation

Sizing the Potential of Behavioral Energy-Efficiency Initiatives in the US Residential Market. McKinsey. November 2013

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Energy Trust of OR Study 2009

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Opinion Dynamics for CA

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LBL Driving Demand (Everett Rogers)

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for marketing Segmentation is meaningful only if there are practical, cost-effective ways to use it for targeting

WHO IS BUYING HOME PERFORMANCE?

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DATA

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CA CPUC/Opinion Dynamics 2009

http://energycenter.org/sites/default/files/docs/nav/programs/swmeo/OpinionDynamicsFinalSegmentationReport.pdf

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Earth Advantage Study (Portlandia)

76% 4 yrs college +

38% Grad Degree +

n = 183Certified Home Performance: Assessing the Market Impacts of Third Party Certification on Residential Properties, 2009

50% $100,000 +

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State of the Nation’s Housing, 2016 (6-22-16)

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The Wisdom of Sam Rashkin

“Actually I work hard to not let Data get in the way of Wisdom. We know who the next home buyers are with or without the data…78 million gen-y young buyers with massive pent-up demand from delaying commitments, living with parents, and accumulating resources after assuming $1 trillion of college debt. More importantly this is the demographic that demands technical innovation and is demonstrating incredible willingness to pay more for a better experience (10X for smart vs. cell phone; 3X to 5X for Starbucks vs. convenience store coffee; 2x for Chipotle vs. McDonalds for healthier eating; and we could go on.)”

Sam Rashkin, Chief Architect, Building Technologies Office, DOE July 2015

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Waiting for the Millenials

5/23/17

AGE DEMOGRAPHICS

Baby Boomers—Last Home Phenomenon

Gen X (35-55 yrs)

Millennials (15-35 yrs)

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High Performance Home Buyers

OTHER CATEGORIES

Academics

Technologists (Engineers, Medical, Technology, Software)

Upscale/Wealthy

Green/Left Leaning

Health Focused

First Home

5/23/17

AGE DEMOGRAPHICS

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High Performance Home Buyers

OTHER CATEGORIES

Academics

Technologists (Engineers, Medical, Technology, Software)

Upscale/Wealthy

Green/Left Leaning

Health Focused

First Home

Millennials

Boomers

Gen X

PRACTICAL WAYS TO GET STARTED WITH SEGMENTATION

5/23/17

Your Best Past Customers--is there commonality?

Your region/climate zone--typical problems or challenges?

Your housing stock--is there a sweet spot?

Past customers that are influentials--does their word of mouth guide you?

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Ideal Customer Profile

5/23/17

Techie Tom Overall Goal: To save energy and make his house more efficient because it's the smart thing to do, and (secondarily) because it's the right thing to do.

Level of knowledge: Very high. Knows what tools are out there, which are best. Up to date on consumer reviews and reports. Attitude toward shopping: I want to buy from people like me, who know their stuff. Informational Sources: Web - blogs, Twitter, Major Media, Green focused media, Renewable media What he wants:  I need more information than they have on their site - details, practical experience, proof that they are the experts, and the product will do what I need it to do. Motivation for efficiency: Two-prongs: 1). it's just smarter living. 2). it's the right thing to do for the planet - and (3) soon, people are going to catch on to it, and efficiency is going to be the next big thing. He wants to be at the top of that wave.   

Age: 35 Profession: Software developer Location: Boston Personality: Type A. Over- educated energy geek. Likes to feel engaged, to be a part of the process. Home Life: Married. No kids. Hobbies/releases: Mountain biking, long-distance running.

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Personas

EGIA/BPI

5/23/17

Heather the Greenie Overall Goal: Wants to feel a part of the green community because those people seem cool, and throw good parties. Level of knowledge: Low. Often falls under the spell of green-washing tactics, and "buys green" because it feels like what she should do. Some uncertainty because she’s Republican and socially conservative. Not completely at ease with full-on Green.  Informational Sources: Reads People Magazine on the sly, reads Vanity Fair,  husband Receives Economist, WSJ What she wants:  Heather tends toward immediacy - buys when she sees something in the store, or hears about something that is widely appreciated. She wants to buy from either the cheapest place or the recognizable leader in the field. Motivation for efficiency: Green is the new Coach bag.

  Age: 29 Profession:  Former professional in banking industry, now a stay at home mom. Location: Suburbs Personality: Heather is extroverted and funny. She likes to be busy, and appreciates a pretty constant buzz of activity. She is smart, and likes to surround herself with bright and engaged people. Home Life: Heather has 4 children and a black lab. They have two houses - a ski house and a house in the suburbs.  During ski season, she feels like she is constantly schlepping between the two places. She'd like something, some how to feel her life could be simpler.

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Personas

EGIA/BPI

5/23/17

Last-home William Overall Goal: Envisions a dream home in a beautiful location where he and his spouse can spend their retirement years living well, at low operational cost in a safe healthy home. Level of knowledge: High, but willing to take new input. He has read as much as he can and understands the basic parameters. It’s not his first time working with contractors or building a new home. If he trusts you, he’ll listen and learn. Informational Sources: Economist, local paper, reference books, trusted friends and family members, sometimes a blog or email newsletter. What he wants: A great overall result. Executive decision-making power. A source of pride and a site for family reunions, now including grandkids. Freedom from high monthly bills. The ability to enjoy retirement, travel. Motivation for efficiency: It’s a soft investment. He knows it may not pay off entirely in his own lifetime, but he can afford it. The concept of home.

Age: 62 Profession: Doctor Location: Suburbs or somewhat rural Personality: Thoughtful, active and generally social, but likes his quiet time. Home Life: William has seen his 3 kids through college. 2 of them are married and have homes of their own. The youngest has a job and her own place to live, although she has not completely solidified her finances yet. William and his spouse like to cook and go for walks together. They host a monthly revolving dinner party with about 10-12 friends, also baby boomers.

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Personas

EGIA/BPI

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Segmentation Basics for HP

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Geography

Housing Type

Presence of Kids

Interests

Homeownership

Income Level

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Approaches to Targeting

Segment Characteristics Targeting MethodGreen

Advocates Support charities--environmental, animal. May be dilettantes. Age characteristics?

Search marketing, Facebook ads (green causes, left of center politics), Direct Mail (green causes), Organizations, Speaking & Community Events,

Traditionalist Cost-focused Energy Savers

Possibly skew older Empty nesters Last house concept--concern for long term operating costs, health, simplicity

Direct mail by age Geographic targeting by age Homeownership Community and Speaking

Home-Focused Selective

Energy Savers

Skew Younger to Middle Aged New-ish to Homeownership New house investment phase

Search Marketing Social Media Web Content Home Improvement Interests (Facebook)

Early Adopters

Younger, more technologically savvy, possibly no kids

Search Marketing Social media Web content Information SEO

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Old & Dying

Yellow Pages Print TV Telemarketing Radio

Old & Living

Word of Mouth Vehicles Lawn Signs Direct Mail Canvassing Door Hangers Presentations Home Shows Open Houses Lead Gen

New & Thriving

Primary Website Active Referrals Google+ Local Organic Search Paid Search Online Display Facebook Twitter Email Newsletters Pinterest Houzz

Which Marketing Tactics are Targetable?

Facebook Targeting

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Mind Blowing Targeting

Interests Ventilation Sick Bldg Syndrome Mold Growth Radon Mitigation SEER ASHRAE Handbook R-Value SIPs HRV Allergen Thermal Comfort

Behavioral Length of Residence Recent Homebuyer New Mover Charities—Enviro Home Renovation Green Cleaners AOL email Gmail email Primarily Cash Watch Home Imp Shows

Demographic Expectant Parents Very Conservative Very Liberal Donate to Liberal Year Home Built Square Footage Home Value Life Event: Newly Moved Friends of Recently Moved Liquid Assets Net Worth

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Supercharge Your Lists

Tower Data

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Custom Audience From Your Lists

Upload List(email or phone)

Matches inFacebook

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Geo Targeting in Paid Search

QUESTIONS?

Peter Troast peter@energycircle.com

207.847.3644