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The Utility Bill 
- A Marketing Device -
Really  ?

A bill is a bill is . . . a marketing tool? 

One form of communication reaches all utility customers every month: the utility bill.

Realizing this, utilities have long used bill inserts to tell customers about various programs.

Now, however, some utilities see the bill itself as a marketing tool and a way to help customers save energy dollars.

The Environmental Protection Agency has launched an Energy Star Billing program to make it easy for utilities to offer enhanced billing information.

The program grew out of research showing utility customers want information on how their energy use compares with other households.

The research also found that the comparisons should be both easy to understand and analytically valid.

EPA provides participating utilities with guidelines and Energy Star Billing displays that show customers how they rate compared to others with houses the same size, on the same meter reading route, or in the same neighborhood.

More useful comparisons:

In the past, utilities often have shown customers how their current energy use compares with their past consumption - for the previous month and the same month the previous year, for example.

But this information isn't always helpful.

Although comparisons with the previous year are intended to show energy use in similar weather conditions, the weather in January one year may differ significantly from the following January.

A cold snap of five consecutive days with subzero temperatures could cause much larger energy consumption this year compared with last year, when unseasonably warm temperatures melted the usual high demand for heating.

In addition, this information tells the consumer nothing about where their energy use rates in comparison to others.

Does the next-door neighbor use a similar amount of energy? Consumers traditionally have had no way of knowing.

To make the information more useful, the Energy Star Billing program compares use among similar homes for the same time period.

This gives consumers a good basis for evaluating their energy use.

If they see their energy use consistently score in the top 5 percent for similar households, for example, they may see the value in exploring utility sponsored energy efficiency programs.

Various groupings:

Houses can be grouped according to various factors to get reasonable comparisons.

The Energy Star Billing Website uses the example of Traer Municipal Utilities in Traer, Iowa

--the first utility in the country to give customers Energy Star bills.

Traer uses a combination of square footage and appliance mix as comparison groups.

A sample on the Energy Star Billing Website shows a home of 1,080-1,282 square feet. Utility bills are spread over a range from $0 to $104.

This gives homeowners a real means of assessing if their home uses an excessive amount of energy.

Other options include comparisons with homes on the customer's block or in a larger area of their neighborhood.

Customers who continuously rank toward the top of the range will begin to question why they use more energy than their neighbors.

This gives utilities an opportunity to market their energy efficiency programs, benefiting both the utility and the customer.

For the bill to be an effective marketing tool, however, it must also be easy to understand.

A graphical representation of where the customer ranks may have the most impact on the consumer.

Energy Star Billing includes a bar chart option, with a pointer showing where the customer ranks.

Another option uses graphics of houses to show the distribution.

Each house represents a household in the neighborhood.

When customers see a majority of houses bunched together at a monthly rate, and their home sitting by itself at a significantly higher rate, it sends them a very clear message.

A line graph also successfully illustrates this point.

Several benefits

Besides providing low-cost marketing for demand-side management programs, EPA says Energy Star Billing can:

Build the utility's image as technically sophisticated, caring about its customers

Serve as a strategic tool in repositioning the utility within a restructured, more competitive environment

Use the EPA Energy Star logo to lend credibility to the billing enhancement and strengthen the environmental image of the utility

The University of Delaware, which conducted research on providing more useful information on bills, designed the billing displays included in the Energy Star Billing program.

The university also provides free implementation support to program participants through a cooperative agreement with EPA and is researching the impact of an introductory letter and legends explaining the graphics on customers' understanding of comparative graphics.

Graphical representations of billing comparisons give con-sumers an opportunity to see at a glance how their utility bills compare with those of other consumers with similarcharacteristics.

The three samples below illustrate different way of accomplishing this goal.

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