Segmentation processes of yesterday no longer serve the needs of consumers. In today’s service-oriented and busy world, reaching the right energy, water or gas customer with relevant messaging is a must to change behavior or trigger action. To help utilities gain program participation, forward-thinking and predictive data analytics and customer engagement platforms provide effective processes to reach ambitious state and federal energy and water saving goals. Experience the future of customer segmentation and learn best practices to efficiently gain program participation in this session. This presentation - Improve your Energy Efficiency, Water Conservation & Low-Income Program Participation Easily with a Smarter Customer Segmentation Approach - was originally presented at CS Week 2016.

1. Using Customer Segmentation to Improve Energy Efficiency,
Water Conservation, and Program Participation
Robert Brnilovich, Black &Veatch & Harman Sandhu, SUS
| @Black_Veatch| www.bv.com

2. About the Speakers
Harman Sandhu
• 15 years in analytics and technology
• Experienced executive helping utilities with management
strategy, Smart Grid, and technology roadmaps
Robert Brnilovich
• 31 years in enterprise management & technology consulting
• Focused on helping E&U companies become more customer
focused and solve environmental issues with technology.
| @Black_Veatch| www.bv.com

3. Utility Customer is changing
• Continued focus on energy efficiency and water
conservation requires engaged customers and demand
side management.
• Customer side technologies (DER, EV, Home Automation)
will require specific interactions for different customers.
• Utility customer is rapidly changing from a homogenous
group to a multi cohort population with unique
aspirations!
Multi-channel
EngagementEnergy Efficiency &
Water Conservation
Distributed Energy
Resources
Home Automation
Electric Vehicles
| www.bv.com | @Black_Veatch

4. Translating Consumer Awareness Into
Action:
58% customers
want efficiency
recommendations,
only 7% access
rebates
60% dishwashers
purchased are
eligible for
rebates, only 29%
are claimed
 80% of consumers are broadly aware of energy efficiency, but limited action
(Source: McKinsey & Company, 2015 & Accenture, 2013)
 A 2013 EPA survey of households revealed that incremental improvements
in consumer and awareness about energy efficiency are small and take time
While progress is being made in moving customers from greater awareness to
taking action, much work remains.
| @Black_Veatch| www.bv.com

5. Utility Expectations & Experiences
(Picture Source: https://www3.epa.gov/region9/greenbuilding/codes/standards.html#labeling )
Electric & water utilities face many hurdles to improving energy
efficiency and water conservation adoption rates among their
customers:
 Greater levels of differentiation among customer segments:
 Household demographics (age, family size, family structures)
 Differences by income level(s) and/or educational attainment
 Variations in lifestyles, including constraints on time
 Limited utility resources available for marketing programs and customer
outreach
 Greater regulatory scrutiny to verify operational effectiveness & results
 Efficiency programs vary widely: A “one-size-fits-all’ approach to
marketing and customer outreach is no-longer an effective strategy.
Standardized labeling of energy and bill savings obtainable
through energy efficiency is an important first step.
| @Black_Veatch| www.bv.com

6. Tracking Utility Program Performance & Results is
Key
MEASURABLE & VERIFIABLE ENERGY AND WATER SAVINGS
Measured energy savings of 8-9% in the 1st year Measured water conservation savings of 5-6%
CUSTOMER ADOPTION RATE(s)
Energy Efficiency Technology Penetration Rate of Somewhere between 4% and 18% per year
MARKETING & OUTREACH
$3-$5 per customer on energy efficiency marketing = A Utility budget of between $180k - $300k/year
Performance Tracking Must Be Done for Each Major Market Segment Targeted By the Utility.
| @Black_Veatch| www.bv.com

7. Measurements to Drive Change
“You can’t manage what you can’t measure.”
- Peter Drucker
…we can measure, therefore we can change!
| @Black_Veatch| www.bv.com

8. A Look at Segmentation
Segmentation is the process of
dividing the customer base into groups of
individuals that are similar in particular
ways such as demographics, usage habits,
interests, attitudes, etc.
Traditionally Utilities have used segments
based on customer class or the type of
program offered.
| @Black_Veatch| www.bv.com

9. However the Energy Use Profiles vary…
 PG&E ACEEE Summer Study (2012)
 15-minute residential electric usage data
 8,337 households, 43 days
 Aggregated data to 6 peak load shapes
 We believe that you can solve the problem by getting in front of
the right person with the right message, than we can grow
participation.
| @Black_Veatch| www.bv.com

10. Multi-factor Segmentation
 Data on customers easily accessible
today – More sources, better
resolution
 Micro segmentation of customers
based on past behavior, demographic
data, and energy/water end use
How
much they
use?
When do
they use?
Who are
they?
Why they
use?
| @Black_Veatch| www.bv.com

11. Cloud Technologies Make it Easy
The cloud-based analytics requires little effort to
setup and can create detailed signature energy and
water use profiles for each customer along with an
Efficient Use Baseline for each segment.
• Real-time analysis using continuous data
processing
• Data from third party sources for property,
weather, and customer demographics
• Social Norm based messaging through multi-
channel customer engagement showing customer
comparisons and call to action
Property Attributes Weather Profile
Energy Usage Customer History
Smart iQ Energy Platform
(Continuous Data Processing, Multifactor Correlation Modeling,
Machine Learning, Delivery Services)
Customer Energy/Water Signature Profile +
Efficient Use Baseline
(Property, Use, and Weather Normalized)
Social Norm Based Messaging
| @Black_Veatch| www.bv.com

12. Reduce Cost
Improve
Participation
Achieve
Targets
New Data
Sources
Energy /
Water
Analytics
Access To
Information
Energy /
Water
Management
INFORMED
AND
ENGAGED
CUSTOMER
• Real-time, two-way
Communication
• Usage Analysis
• Efficiency Ranking
• Consumption Projection
Portal / IOS / Android
+
Social Media Integration
Smart Meters
Smart Thermostats
(Green Button Data)
Coupling Analytics with
Engagement

13. Utilities can increase the response
rates, reduce the outreach costs, and
improve the program impact by using
the right combination of segmentation
analytics and engagement techniques.
Bringing it Together
Key
Success
Factors
Customer
Segmentation
Relevant
Messaging
Multi Channel
Engagement
Real-time
Information
Two-way
Communication
| @Black_Veatch| www.bv.com

14. Black & Veatch Study
SUS commissioned Black & Veatch to conduct a
statistical analysis of the Smart Customer Mobile
Portal (SCM) portal service to determine if
customers w/ SCM modify electricity and water use
compared to non-SCM customers:
 Multivariate Statistical Model
 Control for other factors influencing Usage:
o Weather
o Seasonal variations in usage
o Trend changes that occur over time
 Include customers that do not have SCM
(i.e. a control group )
| @Black_Veatch| www.bv.com

15. Black & Veatch Findings
A robust statistical revealed that customer
use of the Smart Customer Mobile Portal
(SCM) contributed to:
 Lower electricity use among regular residential
customers (without PV-solar), following
registration in SCM
 Lower electricity usage among customers that
did have solar panels, following registration in
SCM
 Water usage was also measurably lower among
both residential customers w/ and w/o solar
panels that registered for SCM
Innovative Technology Delivers
Measurable and Verifiable
Customer Value!
| @Black_Veatch| www.bv.com

16. Group Discussion
Further Questions, Contact Us!
| @Black_Veatch| www.bv.com