Peter Troast of Energy Circle's webinar for BPI Goldstar Contractors on market segmentation in home performance, insulation and HVAC.

1. Understanding Home
Performance Consumers:
Cost Effective Ways to
Discover and Reach Your
Target Audience
Building Performance Institute
Goldstar Webinar Series
Peter Troast, Founder & CEO, Energy Circle
May 23, 2017

2. 5/23/17
Founder/CEO of Energy Circle
Linked In: Peter Troast
Twitter: @EnergyCircle
G+: Energy Circle
Facebook: Energy Circle
Volunteer/Pro Bono
Efficiency First
Home Performance Project
Home Performance Coalition
1000 Home Challenge
CHERP
2
peter@energycircle.com

3. 5/23/17
340+ Home Performance Businesses
builders, remodelers, auditors/raters, HP contractors, HVAC, non-
profits, architects
49* States
3.2 Million Web Visitors
Thousands of Leads
64,000 Tracked Search Terms in HP
Lots and lots of experiments
$1+ Billion in High Performance Building Work
3
The Energy Circle Sandbox

4. 5/23/17
HOW PEOPLE BUY HOME PERFORMANCE
UNDERSTANDING SEGMENTATION BASICS
THE VALUE OF SEGMENTATION
A LOOK AT SEGMENTATION METHODOLOGIES
PRACTICAL MARKETING TACTICS YOU CAN
IMPLEMENT
4
What We’ll Discuss
1
2
3
4
5

5. 5/23/17 5
Segmentation Benefits & Challenges
“Market segmentation is the process of dividing a broad
consumer or business market, normally consisting of existing and
potential customers, into sub-groups of consumers (known as
segments) based on some type of shared characteristics.”
Wikipedia

6. 5/23/17
• Forces marketing focus & choices, but it’s not forever
• Can sometimes overcomplicate marketing
• Always results in less expensive, more effective marketing
6
Segmentation Benefits & Challenges
“Market segmentation is the process of dividing a broad
consumer or business market, normally consisting of existing and
potential customers, into sub-groups of consumers (known as
segments) based on some type of shared characteristics.”
Wikipedia

7. HOW PEOPLE BUY HOME
PERFORMANCE
(they don’t. you sell it)

8. 5/23/17 8
Whole House
Home
Performance
How Much Demand for This?

9. 5/23/17 9
Whole House
Home
Performance
Heating
Cooling
Indoor
Air
Insulation
Health
Connected
Home
Energy
Audits
Windows
Solar
Air
Sealing Lighting

10. 5/23/17 10
Air Conditioning

11. 5/23/17 11
Air Conditioning vs Furnace

12. 5/23/17 12
Air Conditioning vs Furnace vs Insulation

13. 5/23/17 13
Home Performance vs AC/Furnace/Insulation

14. 5/23/17 14
Whole House
Home
Performance
Heating
Cooling
Indoor
Air
Insulation
Health
Connected
Home
Energy
Audits
Windows
Solar
Air
Sealing
Program
Incentive
Climate
Change
the
Jones’
Want
Solar
Home
Value
Green
Bling
Remodel
Efficiency
Lighting
Windows
Leak
Health
Problem
Comfort
Problem
Energy
Cost
Energy Audit
Mold
Issue
Lighting
Cool Equipment

15. 5/23/17 15
Whole House
Home
Performance
Heating
Cooling
Indoor
Air
Insulation
Health
Connected
Home
Energy
Audits
Windows
Solar
Air
Sealing
Program
Incentive
Climate
Change
the
Jones’
Want
Solar
Home
Value
Green
Bling
Remodel
Efficiency
Trigger
Service
Lighting
Windows
Leak
Health
Problem
Comfort
Problem
Energy
Cost
Energy Audit
Mold
Issue
Lighting
Cool Equipment

16. 5/23/17 16
Fundamentals of HP Marketing & Sales
EGIA/BPI
WHOLE HOUSE HOME PERFORMANCE
AC Repair
Spray Foam Asthma Rebate
IAQ
New Furnace
Climate Change Heat Pump
Sick Child
Mold
Cold Room
Energy Cost
MORE COMPREHENSIVE JOBS
Fujistu

17. 5/23/17 17
Whole House
Home
Performance
Windows
Opportunity
Cost to
Acquire

18. 5/23/17
Health
18
Whole House
Home
Performance
Cost to
Acquire

19. 5/23/17
Cost to
Acquire
19
Whole House
Home
Performance
Climate
Change

20. 5/23/17
Conversion from Single Interest
to
Whole House Perspective
is
Critical
20
Home Performance’s Key Success Factor

21. TARGETING ONLY THE BEST
PROSPECTS
(this is Segmentation)

28. THIS IS SEGMENTATION
(where marketing planning begins)
EGIA/BPI

29. 5/23/17 29
Market
Customers
FocusingYour Marketing Efforts
Best Targets
Cheaper to market to
Less waste
More likely to convert
Shorter sales cycle
Lower Cost per Acquisition
Best
Targets

30. 5/23/17 30
Segmented Marketing is Cheaper
$1.74 million @ 7500/job
Tactics Impressions/Visits Cost
Conversion
Rate # of Leads
Conversion
Rate Quotes
Conversion
Rate Jobs CPA
Community 1000 500 10.00% 100 50% 50 50% 25 $20
Email 12000 1000 2.50% 300 25% 75 50% 38 $27
Open Houses 75 500 35.00% 26 75% 20 90% 18 $28
Past Customers 250 500 5.00% 13 90% 11 90% 10 $49
Referral Program 750 2500 25.00% 188 25% 47 75% 35 $71
Social Media 25000 1500 0.10% 25 75% 19 90% 17 $89
Paid Web 10000 3000 2.50% 25,000.00% 25% 63 50% 31 $96
Organic Web 15000 3000 1.00% 15,000.00% 25% 38 75% 28 $107
Directories 5000 500 0.25% 13 35% 4 50% 2 $229
Direct Mail 8000 2800 0.25% 20 50% 10 75% 8 $373
Public Relations 250000 3000 0.02% 38 35% 13 50% 7 $457
Print Ads 100000 3500 0.05% 50 25% 13 50% 6 $560
Trade Shows 250 4000 10.00% 25 50% 13 50% 6 $640
Lead Gen 1750 50 15% 8 20% 2 $1,167
TOTAL 25050 204 $293

31. 5/23/17 31
04101
zip code
Segmentation is Rarely Perfect
Homeowners
High
Income
Ask Yourself:
Does the target audience
dominantly skew towards
my best prospects?

32. 5/23/17
Geographic
Region, town, neighborhood
Demographic
age, gender
Psychographic
personality, values, attitudes, interests, lifestyles
Behavioral
based on actions, such as watching a video, or opening an email
Housing Type
age, basement, known issues
32
Types of Marketing Segmentation
EGIA/BPI

33. 5/23/17 33
for marketing
Segmentation is meaningful only if
there are practical, cost-effective
ways to use it for targeting

34. SEGMENTATION APPROACHES
IN ENERGY EFFICIENCY

35. 5/23/17
Green Advocates
"care about energy-saving behavior as a goal in its own right." Motivated
by environmental factors. About 20% of the total population.
Disengaged Energy Wasters
"don’t care about saving energy or saving money." Not interested in the
environment, and not interested in saving money. 20%.
Traditionalist Cost-focused Energy Savers
motivated entirely by cost savings.
Home-Focused Selective Energy Savers
motivated primarily by home improvement, which may involve a cost-
savings or technological element.
Non-Green Selective Energy Savers
happy to improve their homes' energy efficiency, as long as they don't have
to think about it. "Set it and forget it."
*last 3 = 60%, not broken down
35
McKinsey Segmentation
Sizing the Potential of Behavioral Energy-Efficiency Initiatives in the US Residential Market. McKinsey. November 2013

36. 5/23/17
Green Advocates
"care about energy-saving behavior as a goal in its own right." Motivated
by environmental factors. About 20% of the total population.
Disengaged Energy Wasters
"don’t care about saving energy or saving money." Not interested in the
environment, and not interested in saving money. 20%.
Traditionalist Cost-focused Energy Savers
motivated entirely by cost savings.
Home-Focused Selective Energy Savers
motivated primarily by home improvement, which may involve a cost-
savings or technological element.
Non-Green Selective Energy Savers
happy to improve their homes' energy efficiency, as long as they don't have
to think about it. "Set it and forget it."
*last 3 = 60%, not broken down
36
McKinsey Segmentation
Sizing the Potential of Behavioral Energy-Efficiency Initiatives in the US Residential Market. McKinsey. November 2013

37. 5/23/17 37
Energy Trust of OR Study 2009

38. 5/23/17 38
Opinion Dynamics for CA

39. 5/23/17 39
LBL Driving Demand (Everett Rogers)

40. 5/23/17 40
for marketing
Segmentation is meaningful only if
there are practical, cost-effective
ways to use it for targeting

41. WHO IS BUYING
HOME PERFORMANCE?

42. 5/23/17 42
DATA

43. 5/23/17 43
CA CPUC/Opinion Dynamics 2009
http://energycenter.org/sites/default/files/docs/nav/programs/swmeo/OpinionDynamicsFinalSegmentationReport.pdf

44. 5/23/17 44
Earth Advantage Study (Portlandia)
76%
4 yrs college +
38%
Grad Degree +
n = 183
Certified Home Performance: Assessing the Market Impacts of Third Party Certification on Residential Properties, 2009
50%
$100,000 +

45. 5/23/17 45
State of the Nation’s Housing, 2016 (6-22-16)

46. 5/23/17 46
The Wisdom of Sam Rashkin
“Actually I work hard to not let Data get in the way of Wisdom. We
know who the next home buyers are with or without the data…78
million gen-y young buyers with massive pent-up demand from
delaying commitments, living with parents, and accumulating
resources after assuming $1 trillion of college debt. More importantly
this is the demographic that demands technical innovation and is
demonstrating incredible willingness to pay more for a better
experience (10X for smart vs. cell phone; 3X to 5X for Starbucks vs.
convenience store coffee; 2x for Chipotle vs. McDonalds for healthier
eating; and we could go on.)”
Sam Rashkin, Chief Architect,
Building Technologies Office, DOE
July 2015

47. 5/23/17 47
Waiting for the Millenials

48. 5/23/17
AGE DEMOGRAPHICS
Baby Boomers—Last Home
Phenomenon
Gen X (35-55 yrs)
Millennials (15-35 yrs)
48
High Performance Home Buyers
OTHER CATEGORIES
Academics
Technologists (Engineers,
Medical, Technology, Software)
Upscale/Wealthy
Green/Left Leaning
Health Focused
First Home

49. 5/23/17
AGE DEMOGRAPHICS
49
High Performance Home Buyers
OTHER CATEGORIES
Academics
Technologists (Engineers,
Medical, Technology, Software)
Upscale/Wealthy
Green/Left Leaning
Health Focused
First Home
Millennials
Boomers
Gen X

50. PRACTICAL WAYS TO GET STARTED
WITH SEGMENTATION

51. 5/23/17
Your Best Past Customers--is there commonality?
Your region/climate zone--typical problems or
challenges?
Your housing stock--is there a sweet spot?
Past customers that are influentials--does their
word of mouth guide you?
51
Ideal Customer Profile

52. 5/23/17
Techie Tom
Overall Goal: To save energy and make his house more efficient because it's the smart
thing to do, and (secondarily) because it's the right thing to do.
Level of knowledge: Very high. Knows what tools are out there, which are best. Up
to date on consumer reviews and reports.
Attitude toward shopping: I want to buy from people like me, who know their stuff.
Informational Sources: Web - blogs, Twitter, Major Media, Green focused media,
Renewable media
What he wants: I need more information than they have on their site - details,
practical experience, proof that they are the experts, and the product will do what I
need it to do.
Motivation for efficiency: Two-prongs: 1). it's just smarter living. 2). it's the right
thing to do for the planet - and (3) soon, people are going to catch on to it, and
efficiency is going to be the next big thing. He wants to be at the top of that wave.
Age: 35
Profession: Software developer
Location: Boston
Personality: Type A. Over- educated energy geek. Likes to feel engaged, to be a part of
the process.
Home Life: Married. No kids.
Hobbies/releases: Mountain biking, long-distance running.
52
Personas
EGIA/BPI

53. 5/23/17
Heather the Greenie
Overall Goal: Wants to feel a part of the green community because those people
seem cool, and throw good parties.
Level of knowledge: Low. Often falls under the spell of green-washing tactics, and
"buys green" because it feels like what she should do. Some uncertainty because
she’s Republican and socially conservative. Not completely at ease with full-on
Green.
Informational Sources: Reads People Magazine on the sly, reads Vanity Fair,
husband Receives Economist, WSJ
What she wants: Heather tends toward immediacy - buys when she sees
something in the store, or hears about something that is widely appreciated. She
wants to buy from either the cheapest place or the recognizable leader in the field.
Motivation for efficiency: Green is the new Coach bag.
Age: 29
Profession: Former professional in banking industry, now a stay at home mom.
Location: Suburbs
Personality: Heather is extroverted and funny. She likes to be busy, and appreciates a
pretty constant buzz of activity. She is smart, and likes to surround herself with bright and
engaged people.
Home Life: Heather has 4 children and a black lab. They have two houses - a ski house
and a house in the suburbs. During ski season, she feels like she is constantly
schlepping between the two places. She'd like something, some how to feel her life
could be simpler.
53
Personas
EGIA/BPI

54. 5/23/17
Last-home William
Overall Goal: Envisions a dream home in a beautiful location where he and his
spouse can spend their retirement years living well, at low operational cost in a safe
healthy home.
Level of knowledge: High, but willing to take new input. He has read as much
as he can and understands the basic parameters. It’s not his first time working
with contractors or building a new home. If he trusts you, he’ll listen and learn.
Informational Sources: Economist, local paper, reference books, trusted
friends and family members, sometimes a blog or email newsletter.
What he wants: A great overall result. Executive decision-making power. A
source of pride and a site for family reunions, now including grandkids.
Freedom from high monthly bills. The ability to enjoy retirement, travel.
Motivation for efficiency: It’s a soft investment. He knows it may not pay off
entirely in his own lifetime, but he can afford it. The concept of home.
Age: 62
Profession: Doctor
Location: Suburbs or somewhat rural
Personality: Thoughtful, active and generally social, but likes his quiet time.
Home Life: William has seen his 3 kids through college. 2 of them are married and
have homes of their own. The youngest has a job and her own place to live,
although she has not completely solidified her finances yet. William and his spouse
like to cook and go for walks together. They host a monthly revolving dinner party
with about 10-12 friends, also baby boomers.
54
Personas
EGIA/BPI

55. 5/23/17 55
Segmentation Basics for HP
1
2
3
Geography
Housing Type
Presence of Kids
Interests
Homeownership
Income Level

56. 5/23/17 56
Approaches to Targeting
Segment Characteristics Targeting Method
Green
Advocates
Support charities--environmental,
animal. May be dilettantes. Age
characteristics?
Search marketing, Facebook ads (green
causes, left of center politics), Direct Mail
(green causes), Organizations, Speaking &
Community Events,
Traditionalist
Cost-focused
Energy Savers
Possibly skew older
Empty nesters
Last house concept--concern for long
term operating costs, health, simplicity
Direct mail by age
Geographic targeting by age
Homeownership
Community and Speaking
Home-Focused
Selective
Energy Savers
Skew Younger to Middle Aged
New-ish to Homeownership
New house investment phase
Search Marketing
Social Media
Web Content
Home Improvement Interests (Facebook)
Early
Adopters
Younger, more technologically savvy,
possibly no kids
Search Marketing
Social media
Web content
Information
SEO

57. 5/23/17 57
Old & Dying
Yellow Pages
Print
TV
Telemarketing
Radio
Old & Living
Word of Mouth
Vehicles
Lawn Signs
Direct Mail
Canvassing
Door Hangers
Presentations
Home Shows
Open Houses
Lead Gen
New & Thriving
Primary Website
Active Referrals
Google+ Local
Organic Search
Paid Search
Online Display
Facebook
Twitter
Email Newsletters
Pinterest
Houzz
Which Marketing Tactics are Targetable?

58. Facebook
Targeting

59. 5/23/17 59
Mind Blowing Targeting
Interests
Ventilation
Sick Bldg Syndrome
Mold Growth
Radon Mitigation
SEER
ASHRAE Handbook
R-Value
SIPs
HRV
Allergen
Thermal Comfort
Behavioral
Length of Residence
Recent Homebuyer
New Mover
Charities—Enviro
Home Renovation
Green Cleaners
AOL email
Gmail email
Primarily Cash
Watch Home Imp
Shows
Demographic
Expectant Parents
Very Conservative
Very Liberal
Donate to Liberal
Year Home Built
Square Footage
Home Value
Life Event: Newly Moved
Friends of Recently Moved
Liquid Assets
Net Worth

60. 5/23/17 60
Supercharge Your Lists
Tower
Data

61. 5/23/17 61
Custom Audience From Your Lists
Upload List
(email or phone)
Matches in
Facebook

62. 5/23/17 62
Geo Targeting in Paid Search

63. QUESTIONS?
Peter Troast
peter@energycircle.com
207.847.3644