The following article first appeared in the November 2016 issue of Strategies, the newsletter of the Association of Energy Services Professionals.
Dynamic Marketing: The Importance of Personalization in Engaging Business Customers
By Ellen Lutz
Traditional marketing has been an iterative process, with the same basic steps repeated in order: Research, Plan, Implement, Measure, and Optimize. But in this digital age of Google, social media and mobile technology, the most effective marketing is a dynamic, not iterative process. Dynamic marketing requires constant change and progress. It’s the concept of delivering highly personalized marketing, based upon the decision-maker’s stage in an investment or purchasing process.
For the energy efficiency market, it involves understanding the business customer’s progress with implementing an efficiency project, and crafting appropriate messaging that’s informed by the customer’s stage in that decision process. For instance, is the customer researching energy use within his or her industry, or are they investigating firms to do an energy assessment? Or have they completed a lighting project and are ready to figure out their next project?
Understanding the information and resources that customers need at the time they need it, and tailoring communications to that need is the crux of successful dynamic marketing. This involves tracking their engagement with the program from the time they first respond to an ad or email, all the way through to project completion, submittal of a rebate application and an ongoing utility relationship.
Personalized marketing is more common in consumer marketing, where online searches and purchases make it easier to track individual activity. In business-to-business marketing, with many decision-makers and influencers within the same company, the market is more easily segmented by industry sector, type of decision-makers or technologies common across multiple sectors. In business-to-business DSM marketing, each organization’s stage of deciding to become a participant in a utility program can be surmised based upon their employees’ level and type of engagement with the program’s marketing.
A business customer who needs to be educated and helped through their efficiency investment decision is most often inundated with messages that aren’t relevant to their stage in the decision-making process. The business customer’s decision process can be very long, from three months to 18 months, or longer. Contrast this timeline to the homeowner’s one- to three-month process. The longer timeframe — due to the size of the business investment, the layers of decision-makers that must be consulted and the engineering complexity involved with larger buildings — results in the business decision maker often receiving the wrong message at the wrong time.
In times of shrinking marketing budgets for efficiency programs, how can B2B programs afford to tailor messaging to individual needs? Practicing dynamic marketing requires a solid understanding of the decision processes for various sectors and levels of decision-makers. It also requires an up-front investment in marketing software that is able to capture all of a customer’s points of engagement with a program, allowing the unique profiling of each customer. Marketing teams have been using this type of automated marketing tool for years to onboard new customers, build brand advocates, and fill the sales pipeline with qualified leads.
Results of these highly personalized campaigns range from an 80% to 300% increase in click-through rates and lower customer acquisition costs than traditional “spray and pray” campaigns. This is because, after observing the customer’s behavior unobtrusively over time and collecting information about customers’ interests and stages of engagement, the marketer is able to provide the information the customer needs when they need it. This can have positive benefits for customer satisfaction and lead conversion rates for DSM programs.
Marketing automation software enables marketers to build a profile of customers that better serve their needs. However, it does not replace solid marketing experience and knowledge of your customer base. A campaign will only be as good as the marketing manager’s ability to establish relevant segmentation criteria and metrics, and to translate what the customer engagement data is telling him/her. To send appropriate messages to customers as they move through their decision process, continuous tracking of metrics and customer data becomes essential.
The most effective dynamic marketing integrates a marketing automation tool with the utility or implementer’s DSM lead and project tracking databases. That way, a lead that is initiated through a marketing activity can be traced through the lead cultivation process and the final submission of a rebate application. This will enable accurate tracking of marketing leads and calculation of marketing ROI.
Further segmentation occurs when responses are received from the initial marketing campaigns. Marketers can track each customer’s level of engagement with the program from an initial response to becoming a lead and eventually a participant. Leads or prospects comprise those customers who started as a “response” but became leads by attending an event, filling out an interest form, requesting a call from an outreach person or other higher level of engagement with the program.
Appropriate follow-up messages can be sent to customers based upon their types of engagement and interests. Messages can take the form of emails, direct mail, and a call from an outreach person working on behalf of the program or other type of communication. They can be tailored based on triggers, or actions the person has performed, such as signing up for a webinar about HVAC controls or visiting the program website’s page on whole building retrofits. All messages should be personalized to the individual who took the actions.
In summary, dynamic marketing can have many benefits for utility DSM programs, including a more intimate knowledge of customer needs, reduced acquisition costs, higher participation rates and increased customer satisfaction. It is particularly appropriate for business-to-business programs where sales cycles are long and complex, and when customers need to be nurtured through each stage of their decision process. The upfront set up time and investment required will be repaid in more effective campaigns, faster campaign execution times and reduced labor hours. The marketing automation system — not teams of analysts laboring over reams of data — consolidates information about each customer’s points of engagement with a program. And the customer receives a more personalized, tailored experience working with their utility.
Ellen Lutz is the founder and CEO of Clean Markets, a marketing and outreach firm that supports numerous clean energy programs. This article was contributed by the Marketing Topic Committee.