“Small businesses don’t care about energy efficiency” (and other myths about this hard-to-reach segment)
WRITTEN BY JESSE HITCHCOCK & ANGELICA PEREIRA ∙ TORONTO, ONTARIO
The customer experience revolution was slow to reach the energy industry, and small and medium business (SMB) customers can often be considered the forgotten segment. Small businesses account for 80% of the total businesses in the US and approximately 25% of the utilities load, but despite this utilities only spend 12% of their entire portfolio on the SMB segment. There is clearly work to do, but unlike residential customers, SMBs are uniquely diverse in their energy usage and are more challenging to serve.
COVID-19 has severely impacted small and medium businesses and it is more timely than ever to support them in accessing utility services and improving their bottom line. We’ve heard from utilities across North America about why they feel this segment can’t be reached, and we’ve done some myth-busting to showcase why it’s possible and how technology can help.
Myth #1: Small business owners are short on time and money - participating in upgrades from utilities requires both.
Cost is important to small business owners, and this is exactly why utility programs are essential. 10% of small businesses owners claimed that energy is their single greatest cost, even more than salaries and rent. Business owners want to be able to put their trust in their energy provider, knowing that they have their best interests in mind and looking out for ways for them to reduce their spending on energy. If a small business leveraged a utility program to switch 50 light bulbs on premise to LEDs, the business owner could save $500 per year. In this regard, enrolling in these programs will improve the utilities bottom line -- not hurt it. The highest participation rate ever recorded in the US (85%!) was for a targeted direct install lighting program in 1991-1993. SMB customers are willing to engage, utilities just have to make it quick and easy to enrol in these programs. User-focused digital tools put the business owners in the driver's seat and let them enrol in programs when, where and how it’s convenient for them.
Myth #2: Small business owners are only worried about their bottom line, and don’t value energy efficiency and sustainability as ideals.
Sustainability is top of mind for small and medium businesses. Constellation surveyed their business customers and found that 66% cited that running an environmentally sustainable business is important to them. Another 42% choose their energy provider because of the energy saving services they offer. Given these values it is unsurprising that 60% of businesses surveyed by Cox Conserves identified reducing energy consumption as one of the areas they would appreciate guidance and education from their utility.
So how should utilities provide education and guidance to this sector? Accenture’s customer engagement study found that 61% of participants would like to receive energy saving recommendations via digital channels. Of the customers that do engage digitally, 90% were more likely to sign up for additional energy-related products and services if offered effortless, personalized digital customer service, and 76% would switch to a new provider for a more tailored digital energy engagement program. SMBs understand that a corporate culture that embraces sustainability attracts motivated and engaged employees, mitigates future risks and builds a positive reputation with customers. They are not afraid to change who provides them with energy if it means more access to education and value-added services that help fulfil this mission.
Myth #3: SMBs often rent space, instead of owning it. This means that energy efficiency upgrades are not relevant to them.
Businesses are interested in energy efficiency, regardless of whether they own or rent. Of the SMB customers who are interested in energy efficiency incentives, only 55% own the space they use for their business. This means that 45% of interested SMB customers rent their business space, and utilities must cater to these circumstances as well. There are many energy efficiency opportunities across sectors that can save businesses money, even as tenants. Lighting, appliances and even sensors/thermostats can help SMB tenants reduce their expenses and build an ongoing, trusting relationship with the utility. Of SMB customers who are satisfied with their utilities energy efficiency programs, more than 50% are renters. When you leverage digital tools to empower the SMB sector, identifying this segment immediately is essential to ensuring you provide them with timely and relevant opportunities that they have the power to undertake.
Conclusion
SMB customers are interested in energy efficiency, and are looking to their utility to provide them with relevant, actionable information and support to move forward. This means marrying opportunities with next steps, and using digital tools to give them the flexibility to take action from anywhere, any time. Insights into consumption patterns are only a snapshot in time -- what a customer is doing right now -- not an indicator of what is possible. Businesses are struggling to make ends meet, and utility communications should show them exactly how that pressure can be relieved and make it as easy as possible to take advantage of energy efficiency.
In addition to helping improve their bottom line, sharing this information with a business owner demonstrates that the energy provider is interested in the bigger picture and that their business is not just another statistic. Leveraging digital tools such as MyEnergyXpert bring all of these pieces together, allowing utilities to drive action toward energy efficiency while showcasing their commitment to small business customers.
