DIY energy efficiency kits, a marketing tool sometimes used to promote utility-based incentive programs, are distributed to customers, often free of charge, to entice them to make simple changes that will help save energy. Typically kits include items like compact fluorescent (CFL) or LED light bulbs, LED nightlights, light switch and power outlet gaskets, hot water gauges, water-saving shower heads, faucet aerators, or weather stripping. Historically, used to promote residential energy efficiency programs, we wondered, “Can energy efficiency kits help promote small business direct install programs, too?”
Part of a kit’s allure to program implementers is its ability to produce a gateway effect. Kits may serve as a customer’s first hands-on introduction to the benefits of energy efficiency, or for those already converted to energy efficiency, they can boost energy savings to the next level, by encouraging participation in another related program.
Even though energy kits are not new—they were first introduced in the 1990s—the technology they offer has improved significantly, as has the packaging, related education materials and ability to customize all of the above for a specific program. As the kits improve, that helps them appear more valuable to customers.
Recent research suggests that kit programs can be a versatile way to engage clients in commercial, multifamily apartment and K-12 education programs, all while offering energy savings. In kit programs targeted to these specific markets, there are opportunities not only for savings, but to increase customer awareness of energy efficiency, reach hard-to-reach customer segments, introduce new technologies, and serve as a retention tool in competitive energy markets.
For customers who cannot afford higher-cost measures, kits can be used to increase utility program awareness and promote other programs—hence the gateway terminology. Or they can be used as an add-on to existing programs and/or an integral piece of a sector-based program. There are many variables involved in such kits, including savings, delivery method and implementation, installation rates, and the types of measures the kit provides.
Although many variables exist, there are several common characteristics shared by successful kit-based programs. Here are some areas of best practices worth considering, based on our own experience with the use of energy efficiency kits in direct install program implementation.
Customers receiving energy efficiency kits should be given access to various types of educational media to appeal to different types of learners and knowledge levels. Kit-specific education, as well as energy efficiency awareness in general, makes it more likely that the measures will be installed and remain installed. Educational handouts, additional web resources and videos should discuss the advantages of the kit devices, how to install them and other potential low-cost/no-cost actions that can be taken.
In a small and medium-sized business gas direct install program in Colorado, for example, we developed and distributed a kit to provide to prospective customers. Our utility partner was able to claim savings for each kit that was installed and the kits helped our energy auditors develop a relationship with the prospective customers, which helped encourage deeper participation in the program. Of the prospects that received and installed the kit, 39% signed a contract to move forward with additional, deeper gas savings measures, and another 20% were in our sales pipeline. With nearly 60% of customers moving forward in some way, these kits proved to be a low-cost and effective way to drive deeper savings in the program.
Fairly low-cost marketing tactics, such as bill inserts, community flyers, email or direct mail (e.g., a letter or postcard from the utility) can alert potential participants to a new program or one in need of a savings boost. But if that same outreach includes a call to action about registering for a free kit, the conversion rate can increase substantially and make the outreach even more effective.
We recently began testing this hypothesis in a small and medium-sized business electric direct install program in Colorado, after seeing positive effects in our gas program noted above. We initially primed the market with teaser posts on social media, which featured pictures of the kits and our staff, and mentioned that the kits would be available soon. Then we sent postcards to prospects identified by our propensity model as “best” candidates for completing projects and targeted Facebook ads to select prospects. The postcards and ads announced that the free kits were available with a call to action to “Reserve your free kit!” Our landing page submission rate increased 1114 percent with this call to action, versus our typical "Register for a free energy audit" call to action. Our sales auditors followed up on this outreach in the field, meeting with the inbound requests for kits we received, and dropping additional kits off to key customers in our sales pipeline with contracts that had not yet been signed. The inbound leads from Facebook and direct mall have resulted in an initial kit request-to-audit-request conversion rate of 13 percent. We continue to nurture the prospects through the marketing funnel with paid search, social media posts and email outreach. The initial results have been promising and, pending final test results, we may expand this campaign in this program or the others we implement around the country.
In sum, kit programs can be a surprisingly effective part of a direct install program implementation strategy, as they directly lead to behavioral savings and help drive deeper program participation. Kit programs also have the capacity to target specific customers, introduce new or emerging technologies into markets, and leverage the customer goodwill into customer retention. They also offer a memorable way for newly established energy efficiency programs to create recognition.