DEFG’s EcoPinion Consumer Survey Points to Strong Interest from Higher Income Consumers in a Voluntary Prepay Energy Offering
Denver, CO … DEFG, a management consulting firm specializing in consumers and consumer-facing offerings in the utility sector (http://defg.local/), released today EcoPinion No. 25, “Prepay for Everyone: Prepay Energy and Higher Income Americans.” DEFG worked with the members of the Prepay Energy Working Group early in 2016 to survey approximately 500 Americans with annual incomes of $50,000 or higher.
There is an assumption by some advocates in the utility sector that prepay energy is a second-class service offering targeting low income Americans. This survey was intended to gauge the interest and preferences of higher income consumers in a voluntary prepay energy option offered by their local utility.
The top line finding is that affluent Americans are MORE interested in a voluntary prepay option from the local utility than the general population by 11 percentage points (28% in this survey vs. 17% in our national survey of all consumers conducted late in 2015). This finding strongly refutes the argument that prepay energy is only for low-income customers.
“The top line finding may seem counterintuitive to some,” stated Jamie Wimberly, the CEO of DEFG LLC. “But we already know that prepay in general is associated with high customer satisfaction for all segments because it is viewed as a more convenient way to pay bills and expenses, so it stands to reason that prepay energy would also be of interest to a broad range of Americans from all income levels.”
The primary findings from the consumer survey are:
- Affluent Americans perceive strong benefits of prepaid energy to help children outside the home manage their utility bills (36% in top 3 box) and managing utility bills remotely for vacation homes or other property (61% in top 3 box). This points to the need for messaging and marketing strategies differentiated from other segments for successful penetration.
- 77% of affluent Americans were interested in learning more about how prepaid energy could have a positive environmental impact. In addition, the top reason given by affluent Americans (69%) to use prepay energy would be to “reduce energy usage, help the environment and monitor usage closely.” Environmental messaging around prepaid energy could be very effective with this segment.
- Prepaid energy can be a bridge to other customer objectives. A good example is the alignment between prepaid energy and consumers desire to go paperless. Almost 60% of affluent Americans survey indicated a strong interest in going paperless.
“There are important differences on how you would position prepay energy to higher income Americans than other customer classes,” continued Wimberly. “For higher income Americans, it is more about making it easier and more convenient to remotely manage assets, e.g., vacation homes or rental property, and people, e.g., a student away at university, than anything else. Plus, as with prepaid Starbuck cards, affluent consumers are quickly moving towards cashless transactions. If the messaging and marketing are aligned specifically to the preferences and predilections of the higher income segment, I predict that you will have even greater enrollments by higher income customers than other customer classes.”
For a free copy of the report, go to: http://defg.local/.
DEFG is a management consulting firm specializing in consumers and consumer-facing offerings in the utility sector. We believe that customers are the future of energy. Since 2003, we have helped clients create value in a commodity marketplace. In our rapidly changing marketplace, customer engagement is key to success, and our clients learn to better engage with residential and commercial customers. These customers provide unique resources, reduce risks and increase revenue potential.
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