How A Deeper Customer Understanding Can Energize Innovation

Energy companies have a powerful tool to drive sales: Specialized outreach to understand—and market—end-users

In the popular film, Field of Dreams, the protagonist Ray Kinsella hears a voice that whispers, "If you build it, they will come." Kinsella heeds the voice and builds a storybook baseball field and at the film’s dramatic close, players have arrived and hundreds of cars are streaming toward the ballpark.

Lots of companies in the energy sector today are acting like Ray Kinsella. They’ve built storybook products of their own, and they’re justifiably proud of the genuine efficiencies and environmental benefits they’ve captured. Whether the ultimate customers are utilities, restaurants, hotels, commercial buildings, or homeowners; companies have an abiding faith that those product benefits—often communicated through third-party distributors—are all that’s needed to fire sales. Having built it, the customers will come.

Unfortunately, what plays in a fantasy movie rarely works in real life.

In today’s crowded and competitive energy markets, many product manufacturers fall short in their marketing. They’re forgetting a vital principle: that we motivate behavior by understanding and addressing the desires of the end-user customer. Vaunting product attributes—the default marketing formula among many companies—will only move the needle so far. What’s often lacking is the missing link: direct marketing to end-user customers, based on genuine insight into how the products benefit end-users and addresses their needs.

This fundamental marketing principle is, of course, a hallmark of successful and admired companies everywhere. Consider Samsung, the smartphone manufacturer, has based its entire business model on understanding end-user needs. Its signature mobile phones are a less expensive alternative to the iPhone, preserving the latter’s essential features while including some wholly inspired by customer demand, such as a combination keypad/hand writing option particularly suited for the Asian language. And while Samsung sells overwhelmingly through third-party distributors, it is a world-class marketer to its end-users, and today, sells more phones than Apple.

Granted, the Galaxy S4 smartphone is a different product with a different market than an LED lamp, fuel cell, solar panel, battery, or smart grid device—yet the basic marketing principals hold true in each case.

Understanding and Responding to the Customer "Buying Equation"

Like any business, companies have much to gain from clearly understanding and addressing the constellation of factors that motivate their end-user buying decision. For example:

  • Do you know first-hand the drivers and barriers to end-user adoption of your technology?
  • Do you recognize which organizations end-users trust to inform themselves about the kinds of investments they should make?
  • Do end-users truly understand how they can optimize their energy usage?
  • Do end-users have a clear understanding of the impact your technology has on sustainability—and does that matter in their decision-making?

To answer these questions—and to determine a creative response—usually demands a greater level of continuing engagement between companies and the end-user customer. This implies that companies must find ways to increase interaction with end-users, not bypassing the insights its distributors can bring, but supplementing those with direct communications of its own.

This kind of deeper customer understanding can inspire product and service innovation. For example, Hubbell Lighting, which manufactures and sells energy efficient lighting technologies, came face-to-face with its own "build it and they will come" dilemma. Its energy efficiency products offered indisputable cost saving benefits. Yet end-users were not investing in retrofits to the extent that seemed logical. The company explored the problem directly with its end-users and uncovered several barriers—ranging from the high upfront cost of a retrofit to simple inertia.

Hubbell Lighting responded by reaching directly to end-users with an innovation born of customer understanding: it would offer end-users no-down-payment loans structured in a way that energy cost savings from the retrofit would be greater than monthly financing costs. The program has been a big success.

Where to Start? Reaching End-Users Through Vertical Media

One of the best ways that companies can begin to engage with end-users directly is through specialized "vertical" media. As opposed to marketing through a blanketed wide-ranging approach, the vertical strategy focuses on targeted sources where interested customers look to get specialized information. There is a web of trade journals, blogs, Internet forums, and social media outlets that target every relevant end-user, including those who influence them. This media is usually on the look-out for quality content—be it bylined articles or expert commentary. There are few better ways to build a company’s reputation with the individuals or groups that will ultimately purchase and use their product.

Part of the challenge in working successfully with vertical media is delivering quality content. Companies that are used to focusing on technical product attributes and benefits can find it challenging to shift focus to insights about the larger issues that speak to end-users. If they can do this, there are exciting benefits, notably in positioning the organization as a source of insightful and trusted counsel.

One company that has done a strong job providing this kind of content is Nanocomp Technologies, a firm that manufactures sheets and yarns comprised of carbon nanotube fibers. Its website covers the bases on its product line, but it doesn’t stop there. The company’s homepage is built to funnel end-user audiences into areas where they can find specific and useful information on how Nanocomp’s products meet their needs. Plus, the company offers vertical media coverage on broad topics such as "A New Twist in Electrical Wiring," "Paper that Can Stop a Bullet" and its perspectives on the state of the industry. It has an active program of soliciting awards and recognition, as well as addressing relevant forums and conferences. All this content suggests a strong, focused marketing campaign to position the company with end-user customers as an innovator and leader.

This is a challenging environment for any business to build customer loyalty. Yet it is also a time when marketing focused on influencing end-users can pay major dividends for companies in the energy sector—precisely because so few are doing it. For those who take the step forward, it could well be the missing link in boosting sales and visibility among those who ultimately have the power to take the organization to new heights.

Andy Beck is Executive Vice President of Makovsky’s energy and sustainability practice and general manager of the firm’s Washington, D.C. office. Prior to joining Makovsky, Andy was the Director of Public Affairs for the U.S. Department of Energy—the U.S. government’s top energy spokesperson and communications strategist. He also served as a senior communications and outreach advisor to the head of the U.S. Environmental Protection Agency (EPA) and as a senior official at the U.S. Department of Transportation.

[Image: Flickr user Andreas]

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