Low-income customers are a challenging residential segment for utilities to reach.
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July 26, 2017

Low-Income Customers: Reaching This Hard-to-Reach Customer Segment

Low-income customers are a challenging residential segment for utilities to reach. This customer segment needs assistance in relieving the financial burden of their energy bills, but they’re often unaware of the opportunities available to them to save money and energy. Not only does this array of customers deserve programs designed for their unique needs but they can provide an opportunity for utilities to capture additional savings and get innovative programs approved. It’s time for these customers not to be seen as a problematic credit and collections issue but rather as a strategic advantage for utilities.

Low-Income Segmentation

E Source embarked on low-income program design, marketing and communications, and customer experience as a primary focus for our 2017 research. We believe low-income populations aren’t a single, homogenous group of customers; instead, they can be segmented into groups with varied needs. In our new, nine-report series, we leverage E Source market research data to develop low-income segmentation profiles for each US Census Division. In this series, we explore the characteristics of the top low-income segment in each US Census Division, dive into past program participation, and explore new and untapped opportunities unique to each low-income population. These customers are underserved and underengaged, but utilities have the tools and business opportunity to provide tailored services. The New England region report is available for members of the E Source Residential Marketing Service, and the remaining census regions will be available in the coming months.

Map of the nine US Census Divisions

Program Delivery

The E Source Demand-Side Management (DSM) team keeps a pulse on which low-income DSM programs are—and aren’t—performing well, strategies for improving program performance, and better valuation of program benefits. We’ve developed some of our latest research from questions asked by our utility members through the Ask E Source service. So what’s new in low-income customer program delivery?

A number of utilities—including AEP Ohio, Eversource, Berkshire Gas, and KCP&L—direct home energy reports to low-income customers to increase awareness of how they use energy within the home. Total savings differences vary, with one program finding significantly lower savings from low-income customers and another finding no difference. Innovation in low-income DSM programs ranges from: the use of solar arrays coupled with energy-efficiency education; to incentives for nonprofits, such as Habitat for Humanity to ensure it builds new homes efficiently; to energy education and savings opportunities customized for income-constrained customers living in Vietnamese, Indian, Chinese, Korean, and Hispanic communities. Although these aren’t new offerings, we find that on-bill financing, low- or no-interest loans, and the Home Energy Affordability Loan program (employer-to-employee loans) have been well-received by low- and moderate-income customers.

Learn More

Check out our latest e-book, Using Segmentation to Personalize Low-Income Program Outreach and Increase Participation, which was born out of collaborative research efforts by our DSM and Marketing and Communications teams.

Using Segmentation to Presonalize Low-Income Program Outreach and Increase Participation e-book cover

In addition, the Customer Experience research team digs into topics that can aid in creating better interactions with your low-income customers, including optimizing low-income-friendly billing programs and services.

We’re bringing our low-income work to the E Source Forum this year from September 12–15, 2017. If your utility struggles with how to serve these low-income populations in a mutually beneficial way, we have several sessions for you:

  • More Than a Paycheck: Segmentation and Utility Programs for Limited-Income Customers
  • From Disgust to Delight: How to Sway Your Haters
  • The Green Brick Road: Pathways to Serving Your Multicultural Customers

These sessions will all touch on how to create opportunities out of and serve your low-income customers.

Stay tuned for more cross-over research coming from the E Source DSM, Marketing and Communications, and Customer Experience teams by making sure you’ve selected the “low-income” alert topic in your E Source alerts under Email Preferences in your online account.

About the Authors

Meredith Ledbetter

MEREDITH LEDBETTER

Analyst

Meredith Ledbetter researches and writes on topics such as marketing for residential and business DSM programs and utility strategies for engaging customers in energy efficiency.

2017 E Source Forum ad
Courtney Welch

COURTNEY WELCH

Lead Analyst & Customer Relations

Courtney Welch provides research, analysis, and consultation to members on energy efficiency, renewable energy, and DSM policy and program issues, with a specific focus on the residential sector (including multifamily and low-income segments).

Talk Back iconTalk back!

Let us know what you think. If you want to weigh in or chat about this topic, just email Kym Wootton, E Source vice president of Marketing. Follow Kym on Twitter.

Contributing Authors

Senior Analyst, Marketing & Communications

Meredith Ledbetter researches and writes on topics such as marketing for residential and business demand-side management programs and utility...

Lead Analyst & Customer Relations, Demand-Side Management

Courtney Welch provides research, analysis, and consultation to members on energy efficiency, renewable energy, and DSM policy and program issues,...