2016 will be the year of …

Happy new year everyone! I officially declared 2015 the year of the tipping point, and I actually do think in a couple of years we’ll look back and think that was right. (Making predictions is tricky business … it’s always a relief to look back and think, “Not too bad.”)

According to our most recent Energy Pulse study, engagement in and expectations around the smart home have continued trending up, and with the extension of the solar investment tax credit – and the new gradual, phase-out schedule in place – the renewables industry has the wind at their backs to make significant in-roads in the market and supply people/businesses the options they really want. Plus, our 2015 Eco Pulse study revealed that sustainability is quickly becoming table stakes – fewer people are searching for green products, not because they’re losing interest in buying green, but because they expect it to be baked into the products they buy every day. More people than ever claim they’ve bought or stopped buying a brand because of its environmental record, and the number of companies who have an environmental scorecard of some sort involved in their purchasing process doubled.

So I would dub 2016 “the year the winners are sorted from the losers.” Here’s how the winners and losers will be defined:

Winners: Companies with a real environmental story to tell. Here are the stats:

  • 22% of companies now have a supplier sustainability scorecard that they use in their purchasing decisions – and another 23% are developing one.
  • 54% of companies say they include sustainability-related questions in their RFPs, and 35% say sustainability is often a tie-breaker for product selection.
  • On the consumer side, 69% say a company’s environmental reputation impacts their purchasing decisions. That number jumped up significantly in 2015 – and so did the percentage who said they’d changed their purchasing behavior based on a manufacturer’s environmental record (33% say they’ve done this, and 75% could name a specific company – which is essentially double the number we’ve seen over the last few years).

Being a winner in this game means being authentic. Sustainability can’t just be a marketing program – it has to be baked into your organization. Consumers and business decision-makers can increasingly smell it in you if it’s not for real. Once you’ve baked it into your operations, product development, etc., then you need to tell the story to leverage it with all of your potential buyers.

Losers: Companies who don’t prioritize the environment and fair treatment of people, and companies who aren’t transparent about their actions.

We believe Americans – consumers and business decision-makers alike – are going to increasingly demand transparency. Some are beginning to figure out they’re culpable if they continue to buy from companies that aren’t doing the right thing from a social and environmental standpoint. And given that there are other options out there, there’s no reason to continue buying from companies who aren’t doing the right thing. Case in point: in our Eco Pulse study, when we asked consumers to “name a brand you love and why, and name a brand you hate and why,” some companies made both lists. And even companies that are known for their environmental efforts made the “hate list” because of perceptions about how they treat people (Walmart’s the best example of this). So doing the right thing across the board is critical if you want to build loyalty for the long haul. There are just too many of your competitors willing to offer that, and consumers will migrate towards them.

Speaking of transparency, Microsoft launched a Transparency Hub last year, and we’ll see other companies (especially those with access to all of our data) follow suit in 2016. Doing the right thing AND making that obvious to people is key to landing in the winner bucket vs. the loser bucket.

Winners: Energy companies that embrace change and become companies people want to do business with.

We reported on it a lot last year: Americans are increasingly apathetic about their utility and increasingly interested in other options. Eighty-four percent of Americans expect to control something in their home from their smart device this year, and those who’ve already purchased a smart thermostat are far more interested in leaving their utility for another option. Fifty-two percent of business decision-makers are interested in buying energy or energy management services from someone other than their utility, and 70% are interested in an energy services agreement. With the explosion of smart devices, and the runway now clear for renewables to keep running fast, utilities are going to get a run for their money. It’s already happening – most utilities are experiencing flat to negative load growth. Utilities that embrace this and re-imagine business models and product and service offerings – all geared toward what customers actually want – will be the survivors.

Losers: Utilities who cling to old business models and fight for their “right” to earn a 6% profit.

Faced with the data I presented above, some utilities, rather than changing, are fighting. This is a losing strategy. Every time a utility makes a case for a rate increase by digging their heels in and insisting that they’ve got to recover costs made in power plants that people now really don’t want, or insisting that what they’re required to pay customers for the solar they feed into the grid “isn’t fair,” they’re digging a public perception hole (even though the utility industry is in the right in some cases). That sour public perception will fan the flames of desire for other options and, as noted above, those other options are available now and will be flooding the market with advertising and sales efforts this year and beyond.

Loser: Energy efficiency.

I hate to say this one because so much of the work Shelton Group does is in the efficiency space (the most environmentally friendly energy is the energy we don’t use, after all). But we’ve long seen a correlation between the price at the pump and willingness to conserve at home. As long as gas prices stay low – which is a good thing – people de-prioritize conservation in their minds, and they’re just not motivated to add that extra insulation. Add to this the perception that smart devices can save energy – and do it automatically – plus solar getting cheaper almost daily, and the result is that those shiny objects will get more attention this year, while the foundational elements of efficiency will get moved to the back burner. It’s imperative that manufacturers playing in the efficiency space work on social norming – convincing Americans that wasting energy is not socially acceptable – to shift this in the coming years.

That’s how I see 2016 shaping up. What do you think? Send me your predictions – and your exceptions to my prognostications – and let’s see how it all shakes out.

Marathon image by U.S. Army via Flickr

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January 14, 2016

About the Author

Suzanne Shelton

Suzanne Shelton

Where Suzanne sees opportunity, you can bet results will follow. Drawing on her extensive knowledge of both the advertising world and the energy and environment arena, Suzanne provides unparalleled strategic insights to our clients and to audiences around North America. Suzanne is a guest columnist in multiple publications and websites, such as GreenBiz, and she speaks at around 20 conferences a year, including Sustainable Brands, Fortune Brainstorm E and Green Build.

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Suzanne Shelton

President and CEO

Suzanne is the voice and the vision of Shelton Group. Drawing on her extensive experience in energy and the environment – and 25+ years in the marketing and advertising industry – Suzanne provides high-level strategic insights for our clients and guidance for our research and creative departments. She regularly speaks at conferences around the country, including Sustainable Brands, Fortune Brainstorm E and the International Builders’ Show, and serves as a guest columnist for publications like Fast Company, Green Builder and GreenBiz.com.

Susannah Enkema

VP Research & Insights

Susannah directs our research team and plays a key role in extracting the nuggets of information that pave the way for recommended marketing strategies and creative approaches. Susannah has nearly two decades of market research and strategy experience, including her role as president of SE Consulting, where she led the services for the likes of DIY Network and the makers of GORE-TEX®.

Matt Brass

VP Creative

Matt steers the creative department in concepting, designing and producing campaigns. He ensures sound strategy and deep insights inform everything his team develops, and works closely with the accounts department to ensure copy and designs will meet our clients’ goals. As a designer and filmmaker himself, he’s also a principal contributor to all of Shelton’s in-house photography and videography work.

Courtnay Hamachek

VP Operations

Courtnay oversees our day-to-day operations to keep us running smoothly and support our growth. She establishes project management systems and processes to help our teams anticipate bottlenecks, prevent process issues, and keep projects on time and on target. Courtnay has built extensive experience over 25 years in all aspects of marketing, from account services and project management to design and production.

Aaron Crecy

Digital Marketing Director

Aaron is responsible for planning, executing and measuring digital marketing strategies for Shelton Group and our clients, with an emphasis on inbound, content, SEO, social media, email and paid initiatives. He constantly researches and explores new tactics and strategies to improve digital campaign performance and results.

Aaron brings to the table more than 20 years of marketing leadership experience with premium consumer-facing brands. He came to Shelton Group by way of Malibu Boats, where, as Director of Global Marketing, he oversaw strategic marketing planning and execution for multiple product lines, with specific emphasis on social media and digital. Prior to that, he served as CMO for a leading daily fantasy sports operator, guiding it from startup to the industry’s third-ranked site.