Energy Efficiency: Impacting Behavior Change May 13, 2009 Great River Energy

Introductions Tara Collins David Ranallo Holly Blake

Tara Collins

David Ranallo

Holly Blake

What are your expectations?

What will we cover today? Quickly ~ who is Great River Energy? Why are we marketing to sell less of our product? What are the steps that lead to behavior change? What’s new and emerging Beyond statement stuffers and newsletters? How did we gain leadership buy-in? How much will it cost and what can you get back? What were lessons learned?

Quickly ~ who is Great River Energy?

Why are we marketing to sell less of our product?

What are the steps that lead to behavior change?

What’s new and emerging

Beyond statement stuffers and newsletters?

How did we gain leadership buy-in?

How much will it cost and what can you get back?

What were lessons learned?

Quickly ~ who is Great River Energy? Second largest wholesale electric power supplier in the state and the fifth largest generation and transmission (G&T) cooperative in the U.S. Serve 28 retail distribution cooperatives across Minnesota Headquartered in Elk River, MN until April, 2008

Second largest wholesale electric power supplier in the state and the fifth largest generation and transmission (G&T) cooperative in the U.S.

Serve 28 retail distribution cooperatives across Minnesota

Headquartered in Elk River, MN until April, 2008

Great River Energy (continued) We had a vision…to Lead by Example Move Towards Sustainability ~ Triple-Bottom Line (Competitive Rates, Reliable Service and Environmental Stewardship) Achieve LEED Platinum Certification How can we ask others to conserve and be efficient if we aren’t doing it ourselves?

We had a vision…to Lead by Example

Move Towards Sustainability ~ Triple-Bottom Line (Competitive Rates, Reliable Service and Environmental Stewardship)

Achieve LEED Platinum Certification

Why are we marketing to sell LESS of our product? As a Marketing Team we’ve been asked to: Sell less of our product Give people money for consuming less of our product Track and measure how much people don’t use our product Governor PAWLENTY SIGNS NEXT GENERATION ENERGY ACT May 25, 2007 Electric Companies must reduce their energy consumption by 1.5% in the year 2010 and every year thereafter.

As a Marketing Team we’ve been asked to:

Sell less of our product

Give people money for consuming less of our product

Track and measure how much people don’t use our product

Building Momentum 1.0% 111,000,000 2010 .85% 94,000,000 2009 .7% 78,000,000 2008 .6% 62,000,000 2007 .3% 35,000,000 2006 .3% 32,000,000 2005 Percent of Member Sales kWh Saved Program Year

Determine Residential Priorities Lighting (5) = 51% HVAC (10) = 41% Appliances (10) = 5% Other (8) = 4% Energy Savings

Lighting (5) = 51%

HVAC (10) = 41%

Appliances (10) = 5%

Other (8) = 4%

Change Behavior vs. “Communicate” Changing public behavior means “impacting where people rank an issue in their priority of compelling social causes – it is about long term or permanent attitudinal shift that is manifested in peoples’ commitment to taking action to create change…it requires a multi-dimensional approach to changing attitudes and impacting behavior” ~ building Public Will, Metropolitan Group, February, 2005

Changing public behavior means “impacting where people rank an issue in their priority of compelling social causes – it is about long term or permanent attitudinal shift that is manifested in peoples’ commitment to taking action to create change…it requires a multi-dimensional approach to changing attitudes and impacting behavior”

~ building Public Will, Metropolitan Group, February, 2005

Five Steps to Impact Behavior Change Structure the Problem Know your Audience Create an Integrated Plan Deploy Integrated Strategies Measure , Analyze and Adjust

Structure the Problem

Know your Audience

Create an Integrated Plan

Deploy Integrated Strategies

Measure , Analyze and Adjust

1. Structure the Problem Legislation in Minnesota is a reality Reporting savings is a mandate Gain distribution member buy in /end use member engagement Striking a balance between need for conservation and the co-ops’ need to increase member revenue Currently, the choice is voluntary; there’s an incentive, but no penalty (eg. Gas prices) Perception is that conservation is “going without”, but efficiency is being smart Need to frame the issue in a positive light ~ better manage your energy costs through energy efficiency

Legislation in Minnesota is a reality

Reporting savings is a mandate

Gain distribution member buy in /end use member engagement

Striking a balance between need for conservation and the co-ops’ need to increase member revenue

Currently, the choice is voluntary; there’s an incentive, but no penalty (eg. Gas prices)

Perception is that conservation is “going without”, but efficiency is being smart

Need to frame the issue in a positive light ~ better manage your energy costs through energy efficiency

2. Know Your Audience Research conducted with Himle Horner indicated: 95% of our members are satisfied with our member cooperatives as their electric provider and that the local electric cooperative is a credible messenger for energy efficiency and conservation messages 82% of our member base is concerned about the affordability of electricity

Research conducted with Himle Horner indicated:

95% of our members are satisfied with our member cooperatives as their electric provider and that the local electric cooperative is a credible messenger for energy efficiency and conservation messages

82% of our member base is concerned about the affordability of electricity

2. Know Your Audience Additionally: 75% of members want to support energy efficiency, but don’t want to pay for it 59% take environmental action mainly in order to lower their energy bill, another 15% do so for future generations When asked “How often do you take actions to conserve energy” ~ 89% said everyday “… human beings consistently think they are better than they are…self-serving bias. …94 percent of men rank themselves in the top half according to male athletic ability.” The irrational side of change management. The McKinsey Quarterly, 2009

Additionally:

75% of members want to support energy efficiency, but don’t want to pay for it

59% take environmental action mainly in order to lower their energy bill, another 15% do so for future generations

When asked “How often do you take actions to conserve energy” ~ 89% said everyday

3. Create an Integrated Plan Determine Key Messages – Make it Personal : Low cost/no cost actions Affordability – control your rising rates Future generations – do it for your kids/grandkids Determine Priorities High impact Low cost Innovative programs Gain Leadership Buy-In Develop Integrated Marketing Strategy

Determine Key Messages – Make it Personal :

Low cost/no cost actions

Affordability – control your rising rates

Future generations – do it for your kids/grandkids

Determine Priorities

High impact

Low cost

Innovative programs

Gain Leadership Buy-In

Develop Integrated Marketing Strategy

4. Deploy Integrated Strategies Marketing Communications Grassroots Key Messages Mnbrighterideas.com PR Student Presentations Presentations Articles Videos Film Festival Promotions/Contests Advertising Sell Sheets Case Studies Events/Sponsorships

5. Measure, Analyze and Adjust Determine promotion goal and economics Develop promotions with emphasis on measurement and analytics Provide weekly measurement statistics to all key stakeholders Provide comprehensive end-of-promotion report Identify gaps to drive change for future promotions

Determine promotion goal and economics

Develop promotions with emphasis on measurement and analytics

Provide weekly measurement statistics to all key stakeholders

Provide comprehensive end-of-promotion report

Identify gaps to drive change for future promotions

In Summary We knew what residential areas needed focus What key messages would resonate We needed to have a flexible approach for our member cooperatives We needed to make it easy for the consumer and the member cooperatives

We knew what residential areas needed focus

What key messages would resonate

We needed to have a flexible approach for our member cooperatives

We needed to make it easy for the consumer and the member cooperatives

Case Study: CFL Promo What did we set out to accomplish? 9,370,800 kWh savings

What did we set out to accomplish?

9,370,800 kWh savings

Case Study: CFL Promo How did we set out to accomplish this? Co-creating program with member cooperatives Universal GE Coupon Wal-Mart Instant Mark-Down Offer Home Lighting Makeover Sweeps

How did we set out to accomplish this?

Co-creating program with member cooperatives

Universal GE Coupon

Wal-Mart Instant Mark-Down Offer

Home Lighting Makeover Sweeps

Case Study: CFL Promo How did we set out to accomplish this? Gave member co-ops flexible ala carte tools

How did we set out to accomplish this?

Gave member co-ops flexible ala carte tools

Case Study: CFL Promo Runestone Dakota Meeker Connexus Itasca-Mantrap

Case Study: CFL Promo 126,455 bulbs sold 9,610,580 kWh saved 30% Coupons 70% Wal-Mart instant markdown 102% of goal obtained during the 3-month promotion

126,455 bulbs sold

9,610,580 kWh saved

30% Coupons

70% Wal-Mart instant markdown

Case Study: CFL Promo

Case Study: CFL Promo Key Learnings: Extremely pleased with results for our first statewide promotion Home Lighting Makeovers were labor intensive Ensure GE provides us pictures of every Wal-Mart store set up Include “End Cap on Main Walkway ” in contract Don’t invest in downloadable coupons, not enough people took advantage of them Determine organization’s tolerance for non-member purchases Coupons are extremely important to some of our member cooperatives (i.e. BENCO = 13% return rate vs. overall 2% return) Co-ops did a GREAT job marketing the program to their members Cost per kWh for this promotion estimated to be only $0.018

Key Learnings:

Extremely pleased with results for our first statewide promotion

Home Lighting Makeovers were labor intensive

Ensure GE provides us pictures of every Wal-Mart store set up

Include “End Cap on Main Walkway ” in contract

Don’t invest in downloadable coupons, not enough people took advantage of them

Determine organization’s tolerance for non-member purchases

Coupons are extremely important to some of our member cooperatives (i.e. BENCO = 13% return rate vs. overall 2% return)

Co-ops did a GREAT job marketing the program to their members

Cost per kWh for this promotion estimated to be only $0.018

Case Study: Appliance Promo Objective: Drive energy savings generated through refrigerator and washer sales Target between four and five million kWhs saved Strategies: Increased rebate dollars for six week period Standard rebate process with any appliance retailer Coupons good at Minnesota Best Buy stores Fill Your Fridge Sweepstakes Tactics: Required recycling of old fridge Best Buy contributed to rebate dollars Mom and Pop stores could participate and add rebate dollars

Objective:

Drive energy savings generated through refrigerator and washer sales

Target between four and five million kWhs saved

Strategies:

Increased rebate dollars for six week period

Standard rebate process with any appliance retailer

Coupons good at Minnesota Best Buy stores

Fill Your Fridge Sweepstakes

Tactics:

Required recycling of old fridge

Best Buy contributed to rebate dollars

Mom and Pop stores could participate and add rebate dollars

Case Study: Appliance Promo

Case Study: Appliance Promo (continued) Result: 4.5M lifetime kWh saved Power over 411 homes for an entire year Meet annual household savings goal of 110 kWh for 41,095 homes The kWh savings generated during the appliances’ lifetime are enough to:

Case Study: Appliance Promo (continued) Key Learnings: Start early ! Don’t launch promo the same week it’s announced that banks are failing and economy begins to go downhill Use big box that mirrors cooperative “feel” Actively engage Mom and Pops sooner than later Cost per kWh for this promotion estimated to be only $0.022

Key Learnings:

Start early !

Don’t launch promo the same week it’s announced that banks are failing and economy begins to go downhill

Use big box that mirrors cooperative “feel”

Actively engage Mom and Pops sooner than later

Cost per kWh for this promotion estimated to be only $0.022

Case Study: 2009 Appliance Promo

What were lessons learned? Create strong partnerships with retailers that resonate with your member base (i.e. Best Buy vs. Sears) Always include a local / community option so you don’t alienate “mom and pops” Member cooperatives trust you when you add value The right message resonates and it needs to be disseminated in many different ways Offer ala carte options for our member cooperatives Start planning now for 2010

Create strong partnerships with retailers that resonate with your member base (i.e. Best Buy vs. Sears)

Always include a local / community option so you don’t alienate “mom and pops”

Member cooperatives trust you when you add value

The right message resonates and it needs to be disseminated in many different ways

Offer ala carte options for our member cooperatives

Start planning now for 2010

What’s new and emerging beyond statement stuffers and newsletters? Bored with your typical marketing tactics? INTEGRATE! Social Media (Facebook, LinkedIn, Twitter) Contests Linked to Education Cable TV Sponsorships Community Outreach Sell Sheets Ads (web and newsletter) Cast Studies In-Store Events Trade Ally Engagement Press Articles Web Coupons

Bored with your typical marketing tactics?

INTEGRATE!

Social Media (Facebook, LinkedIn, Twitter)

Contests Linked to Education

Cable TV

Sponsorships

Community Outreach

Sell Sheets

Ads (web and newsletter)

Cast Studies

In-Store Events

Trade Ally Engagement

Press

Articles

Web

Coupons

Case Study: State Fair Marketing Communications Grassroots Key Messages -Buy CFLs -Buy ENERGY STAR Appliances -Conserve Energy Mnbrighterideas.com -Drive to web for quiz/sweeps Sustainability Stage Presentations - Conservation Doesn’t Have to Mean “Going Without” – It Can Simply Mean “Waste Less” Co-op Volunteers Educate Visitors About Promos and Rebate Programs Long-Standing Sponsorship New Venue—Eco Experience Building Integrated CFL Promotion Giveaway = CFL Coupon On-Site Sweepstakes – ENERGY STAR ® Refrigerator Advertised in Local Paper, Web and at HQ

Case Study: State Fair

Case Study: MNBrighterideas.com

Case Study: MNBrighterideas.com Goals for Website Engage consumers in how they can: Conserve energy Waste less electricity and use electricity wisely Save money Lay the ground work for conservation programs and marketing Position local co-ops as conservation/energy efficiency information brokers Local resource for consumers

Goals for Website

Engage consumers in how they can:

Conserve energy

Waste less electricity and use electricity wisely

Save money

Lay the ground work for conservation programs and marketing

Position local co-ops as conservation/energy efficiency information brokers

Local resource for consumers

Key Site Messages Based on research done by Himle Horner, the following information should be communicated strongly and clearly through the website: How to take practical steps to control energy costs How to become more energy efficient and help save the environment by putting good intentions to work through no-cost/low-cost actions Small steps we can take to secure a cleaner, more energy-efficient future for our children

Based on research done by Himle Horner, the following information should be communicated strongly and clearly through the website:

How to take practical steps to control energy costs

How to become more energy efficient and help save the environment by putting good intentions to work through no-cost/low-cost actions

Small steps we can take to secure a cleaner, more energy-efficient future for our children

Today’s www.MNBrighterideas.com

Integrated Member Experience mnbrighterideas.com

Case Study: MNBrighterideas.com Results: 1,744 visits in first month 5:27 average time on site Spikes with newsletters/CFL Promo Level of engagement is strong based on per visit pages and time Out-state visitors over represented on site and have better than average engagement stats Half of visits come directly to the site Half of direct visitors are visiting for a second time Co-ops are significant source of traffic representing 70% of all referrals CFL Sweeps is the largest driver of site traffic Meaningful traffic for Quiz, Events, Tools

Results:

1,744 visits in first month

5:27 average time on site

Spikes with newsletters/CFL Promo

Level of engagement is strong based on per visit pages and time

Out-state visitors over represented on site and have better than average engagement stats

Half of visits come directly to the site

Half of direct visitors are visiting for a second time

Co-ops are significant source of traffic representing 70% of all referrals

CFL Sweeps is the largest driver of site traffic

Meaningful traffic for Quiz, Events, Tools

Keeping it Fresh Evolution of MNBrighterIdeas.com Dynamic Children’s/Youth/Education section (leveraging Touchstone Energy Assets) MN Brighter Ideas Film Fest Promotion of our Programs/Rebates Social Media Implementation/PR Several New Videos on You Tube account

Evolution of MNBrighterIdeas.com

Dynamic Children’s/Youth/Education section (leveraging Touchstone Energy Assets)

MN Brighter Ideas Film Fest

Promotion of our Programs/Rebates

Social Media Implementation/PR

Several New Videos on You Tube account

How did we gain leadership buy-in? Senior Staff Board of Directors ACT Committee DSM Member Services Weekly reports – actual vs. goal Analytics/economics before, during and after promotions

Senior Staff

Board of Directors

ACT Committee

DSM Member Services

Weekly reports – actual vs. goal

Analytics/economics before, during and after promotions

How much will it cost? What can you get back? Rule of thumb: Goal is to be below .07/kWh Actual is .01/kWh Marketing is .22% of annual budget Plus cost of rebates Measurable energy savings supported by strong on-line/off-line tools: CFL Promo Appliance Promo LED Holiday Lighting

Rule of thumb: Goal is to be below .07/kWh

Actual is .01/kWh

Marketing is .22% of annual budget

Plus cost of rebates

Measurable energy savings supported by strong on-line/off-line tools:

CFL Promo

Appliance Promo

LED Holiday Lighting

Did We Meet Your Expectations?