RESIDENTIAL ENERGY SEGMENTATION

E Source Forum 2014 September 29–October 2, 2014

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CONSUMER DRIVEN ACTIVATION

Identify your best consumers and the

behaviors that define them

Inspire consumers with the right

product/ message in the right place

Locate your consumers efficiently

FIND

MAXIMIZE ENAGAGEMENT & ELIMINATE WASTE

ENGAGE UNDERSTAND

Answers WHO, WHAT, WHERE and HOW

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UNDERSTAND Identify the right consumer for your business

Not all consumers are the “right” fit … understand who is!

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FIND Locate the right consumer

CONTACT & MEDIA PREFERENCES

ENGAGE Deliver the right offering in the right place to inspire action

At Home

On-the-Go

In Store

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RESIDENTIAL ENERGY SEGMENTATION BACKGROUND

• E Source and Nielsen collaborated to create industry-specific, strategic residential consumer groups created around metrics that are important and relevant to utilities and energy companies

• Capitalizes on E Source’s expertise in the energy industry and Nielsen’s syndicated data and analytic segmentation capabilities

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RESIDENTIAL SEGMENTATION OBJECTIVES

• Benefit: Consumer groups are optimized by immediate and long-term value and configured to create maximum lift for marketing efficiency.

Marketing Efficiency

• Benefit: Consumer groups are linked to syndicated research and described by their product usage behaviors, motivations and preferences to identify patterns that can be used to develop new offerings.

Go-To- Market Innovation

• Benefit : Being tied to households and geographies ensures enterprise-wide usability for promoting existing programs and services through customer contact points (Ex: call centers)

Enterprise- wide Application

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COMPREHENSIVE DATA INPUTS

Syndicated Research • Nielsen Energy Behavior Track

• Participation in Energy Efficient Behaviors (40 profiles)

• Energy Consumption (8 profiles) • Energy Attitudes (23)

• Mediamark Research (MRI)

• Use of Green Light Bulbs/Green Products (2 profiles)

• Environmental Attitudes (9 profiles)

Household and Market Data

• Nielsen Housing Characteristics

• Home Ownership/Renter (2 profiles)

• Home Value (6 profiles) • Length of Residence (3 profiles) • Urbanicity (5 profiles)

• Nielsen Demographic Data • Household Age (7 profiles) • Household Income (11 profiles) • Household Size (4 profiles)

SUMMARY OF CUSTOM GROUPS

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RESULT: 7 RESIDENTIAL SEGMENTATION GROUPS

16.99%

19.08%

9.73%

8.37%

10.73%

24.14%

10.96%

Plugged in Families

Recycling & Rebates

Online Pragmatists

Rural Reducers

Thermostat Turners

Young Renters

Unengaged Owners

% of U.S. Households Strategic

Group % of

U.S. HHs Pro-Active

Efficiency (2) 36.07%

Passive Efforts (3) 28.83%

Barriers to Participation

(2) 35.10%

Total 100%

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HIGH LEVEL DESCRIPTION OF RESIDENTIAL ENERGY SEGMENTATION GROUPS

Description

PRO-ACTIVE EFFICIENCY PASSIVE EFFORTS BARRIERS TO PARTICIPATION

Plugged In Families

Recycling & Rebates

Online Pragmatists

Rural Reducers

Thermostat Turners

Young Renters

Unengaged Owners

% of U.S. HHs 17% 19% 10% 8% 11% 24% 11%

Age 25-54 45-74 25-54 55-74 65+ <45 55+

Income $75k+ $75k+ $50k-$100k $50k-$100k $10k-$50k <$50k <$50k

% Home Owners 84% 91% 72% 90% 96% 16% 88%

% Married 69% 72% 64% 64% 40% 24% 31%

% Kids 68% 14% 68% 2% 6% 37% 2%

Pro-Active Efficiency groups are higher income and home owners. Barriers to Participation groups are lower income with Young Renters representing renters. Rural Reducers and

Thermostat Turners are older with Rural Reducers having higher income. Online Pragmatists represent families.

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TAKEAWAYS FROM RESEARCH & GROUP CREATION • Key characteristics that influence energy-efficiency participation:

• Affluence

• Age

• Rent vs Own

• Passive Efforts group take some efforts like turning thermostat down, using CFLs,

have low-flow showerheads, but not overly engaged

• Young Renters offer future opportunity for energy efficiency

• Higher percentage ownership of hybrid & electric vehicles

• Rank 1st in other behaviors – turn off lights when not in use, unplug electronics, pre-paid service

• Twice as likely to have moved in the last year

• Rank 1st in wanting to be contacted by social media – Index of 168

EXAMPLE CASE: LOAD MANAGEMENT

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PLUGGED IN FAMLIES

RECYCLING & REBATES

ONLINE PRAGMATISTS

RURAL REDUCERS

THERMOSTAT TURNERS

YOUNG RENTERS

UNENGAGED OWNERS

Load Management

FIND THE RIGHT CUSTOMER: LOAD MANAGEMENT Reach the Right Customers

PRO

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PLUGGED IN FAMLIES

RECYCLING & REBATES

ONLINE PRAGMATISTS

RURAL REDUCERS

THERMOSTAT TURNERS

YOUNG RENTERS

UNENGAGED OWNERS

Load Management

Prefer Energy Provider Contact Me: Mobile Text

FIND THE RIGHT CUSTOMER: LOAD MANAGEMENT Reach the Right Customers through the Right Channel

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PLUGGED IN FAMLIES

RECYCLING & REBATES

ONLINE PRAGMATISTS

RURAL REDUCERS

THERMOSTAT TURNERS

YOUNG RENTERS

UNENGAGED OWNERS

Load ManagementPrefer Energy Provider Contact Me: Postal Mail

FIND THE RIGHT CUSTOMER: LOAD MANAGEMENT Reach the Right Customers through the Right Channel

PRO

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CHANNEL OF COMMUNICATION MATTERS • 3 of the 7 Residential Energy groups have an Above Average index to use load

management services

• Of the 3 groups that are likely to participate in Load Management programs • But, their contact preferences vary

• Plugged in Families index 38% higher than average to prefer contact by text

• Recycling & Rebates and Thermostat Turners have a higher preference for direct mail

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PLUGGED IN FAMILIES

U.S. Households 17%

LIFESTYLE & MEDIA CONSUMPTION

ENERGY BEHAVIORS • Participate in Appliance Rebates,

Load Management Programs • Use Programmable Thermostat to

Adjust Temp in Off-Peak/Seasonal • Use 11+ CFLs, Light Timers • Use Sprinkler Timer; Have Low

Water Plants • Drive Hybrid, Plug In Electric

Vehicles • Participate in Time of Use Rates,

Real Time Pricing • Participate in Online Energy,

Whole House Audits • Use Energy Company Online

Service to Monitor Use • Have 2+ Refrigerators • Added Shade Screens to Save

Energy • Use <10% of Monthly Income for

Energy Bills

Energy Efficient Program Participation

DEMOGRAPHICS • Age 25-54 (40% Age 35-44) • Income $75k+ (63% $75k-$200k) • Married Couples with Kids • 84% Work Full-Time • 74% Caucasian, 6% Asian; 14%

Hispanic HOUSING CHARACTERISTICS • 84% Home Owners • Reside in Urban, Suburban Areas • Home Value $200k+ • Length of Residence 1-4 Years • Home Built, 2000 or Later

WHO THEY ARE

LIFESTYLE & SHOPPING • Active Lifestyle: Jog, Ski, Weight Lift, Exercise at Club • Download/Purchase Music; Go to the Zoo • Spend $200+ on Children’s Toys; Rent Children’s Videos • Shop at The Gap, Old Navy, Costco, Best Buy, Target ONLINE • Heavy Internet Users • Order from amazon.com, zappos.com, ebay, target.com • Use Internet for Real Estate Information, Download

Music, Financial Information • Visit cnn.com, expedia.com, iTunes.com, shutterfly.com MOBILE • Use Apps Multiple Times a Day • Use Cell Phone or Tablet to Access WiFi • Has iPhone or Blackberry RADIO • Above Average Radio Listeners • Listen to Contemporary Hits, Alternative Rock PRINT • Read Parenthood, Sports, News Weekly Magazines SOCIAL MEDIA • Use Facebook and Twitter Daily • Use LinkedIn Weekly or Less often

WHAT THEY THINK

ATTITUDES & OPINIONS • Prefer Carbon Neutral/Green Energy: Solar Power • Would Pay $10 More per Month For Smart Meter Service • Conserve Energy to Improve the Environment • I Feel I am More Environmentally Conscious than Most

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IDENTIFY OPPORTUNITY TO ENGAGE BY MARKET Load Management Potential

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Your Customers

Your Proprietary

Data

Segmentation

Energy Behaviors &

Attitudes

Mobile Behaviors &

Usage

Technology Behaviors &

Usage

Media Preferences

Retail & Other

Lifestyle Behaviors

TAKE ACTION WITH A 360° VIEW OF THE CUSTOMER Connections to Nielsen assets drive holistic insights

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CONSUMER DRIVEN ACTIVATION

Identify your best consumers and the

behaviors that define them

Inspire consumers with the right

product/ message in the right place

Locate your consumers efficiently

FIND

MAXIMIZE ENAGAGEMENT & ELIMINATE WASTE

ENGAGE UNDERSTAND

Answers WHO, WHAT, WHERE and HOW

Joel Sumner Client Director Nielsen Consumer Activation Office: (858) 550-5720 Mobile: (858) 210-1476 Joel.Sumner@nielsen.com