The Segmentation Challenge

The Segmentation Challenge

Perhaps the most critical challenge in marketing is to identify your most likely buyers or participants and understand how to reach them and what messaging will resonate with them. There are a wide variety of segmentation approaches to tackle this challenge. Over the years, we’ve created custom segments (via survey methods) for clients and we’ve utilized off-the-shelf psycho-demographic or “lifestyle” systems in support of direct marketing initiatives.

We’ve also developed targeting models, based on analyses of past program participants. These kinds of models assume that the most likely future buyer/participant will look like past buyers. This is an assumption that, while usually true, can be wrong. For example, a utility’s HVAC rebate program could be built on the backs of one or two enthusiastic contractors in a limited geographic territory. Current participant profiles may not match likely future participants at all.

In addition, we’ve seen these kinds of models built strictly on geography, consumption and age/type of home. While better than nothing, these limited data models don’t include critical information. For example, just because a household is a heavy user in an older home doesn’t mean they’re likely to do anything about it. They might not care or have the available funds to take on improvements. Customers also do things for very different reasons. If you don’t know more about them, you have to utilize a one-size-fits-all approach to communications – which is why so much energy efficiency marketing messaging is simply about saving money.

The challenge is particularly compounded for our clients in the utility industry who are often tasked to support multiple (very different) initiatives: new homes programs, green power or community solar programs, EV initiatives, traditional DSM/rebate programs, and customer service/communication choice initiatives, etc. Can one segmentation system support all?

An Effective Solution

Shelton Group has developed a proprietary consumer energy segmentation system based on data from the Energy Pulse™ study, which has been published each year since 2005. This online survey of over 2000 American consumers, asks a battery of self-reported behavioral, attitudinal and demographic questions to understand habits, propensities, attitudes and the various spheres of influence related to energy consumption and product selection. The resulting consumer energy segmentation system addresses both the “Who” (as in who’s the best target) and the “Why” (why they will or will not engage/why they are or are not satisfied) that is critical for energy-related marketing and customer communications.

Over the past ten years, we’ve consistently found four stable segments that have barely shifted in their market size and composition. Each segment has a distinct demographic and attitudinal profile. True Believers are pro-environment and undertake the highest number of energy conserving behaviors. Working Class Realists are struggling to make ends meet and are difficult to engage in energy conservation initiatives. Cautious Conservatives care about “the ROI” of any undertaking, yet are surprisingly good targets for solar due to their desire for “control”. Concerned Parents are busy and convenience and comfort drive their decisions.

In our ten years of Energy Pulse studies, we’ve built a warehouse of segment responses to questions about communication preferences, social influence, personality characteristics, media consumption, technology usage, home technology product interest, energy efficient product purchase propensities and rebate participation, interest in load control and time of use billing, and attitudes regarding solar and other renewable energies. We’ve also tested hundreds of messages both in surveys and in segment-specific focus groups to learn what resonates with each and how to connect with their underlying drivers.

Segmentation Appending

Shelton Group has created a predictive algorithm that allows us to append our energy segments to our client’s customer records using third-party data from a provider like Acxiom. The right segmentation system can help you market in a much more cost-efficient manner. Response rates increase when communications are targeted to the most likely prospects and are written/designed to specifically connect with their underlying drivers. Shelton Group has a proven approach to help you do that. Shoot an email to lhead@sheltongrp if you’re interested in learning more.


Posted on

August 4, 2016

About the Author

Lee Ann Head

Lee Ann Head

Lee Ann is a former contributor to Shelton Insights.

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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

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.

Scot Case

Senior Consultant

A sustainability strategy consultant since 1993, Scot has served as non-profit leader, as a partner in an environmental marketing firm that he grew and sold, and as an executive in a multi-billion-dollar, international company. He has published dozens of articles and case studies, was co-author of the original “Sins of Greenwashing” study, testified before Congress, and been quoted on NPR, Good Morning America, CNN, The New York Times, Business Week, and the Wall Street Journal. Scot was also highlighted in an Emmy award-winning documentary on sustainable purchasing.

Casey Ward

VP Account Services

Casey manages our relationships, growth and development with a specific group of clients that includes Environmental Defense Fund, Cotton LEADS and CertainTeed Insulation. She provides leadership and support for the account team members who manage the day-to-day processes for these clients. She contributes to strategic direction for each client and guides our creative efforts to ensure everything we do builds toward meeting – or exceeding – the client’s goals. Her ability to simultaneously see the big picture and pay close attention to the details helps her champion her clients’ needs and identify new growth opportunities for them.