Sample of Recent Experience in Gas and Electric Utilities

Marketing strategy for a new Demand-Side Management program: A northeastern utility had determined that commercial heat pumps would improve its load factor, but wanted to understand whether there was a suitable market for them, and if so, how best to pursue it.

The consulting team first evaluated the market opportunity for the product by analyzing commercial segments' size and growth, evaluating the appropriateness of the heat pumps for specific commercial applications, and diagnosing customers' requirements from a series of extensive interviews and focus groups.

The consulting team met with managers in an off-site planning session to select four segments that had the greatest promise, and to lead the managers in developing a strategy for segment penetration. Identification of critical success factors led to the development of programs to address external market needs, and to strengthen the utility's own marketing capabilities internally. The consulting team then guided individual managers in developing a formal implementation plan for each program.

Market opportunity evaluation for a new marketing program: A southwestern utility wanted to know if there was a market among its commercial customers for a new product it was considering promoting, the heat pump water heater. Hamilton Consultants gauged the level of customer interest in the product, and identified appropriate applications for it, through personal interviews, surveys of nine commercial segments, and a survey of members of the construction trade. The consultants used the level of customer interest in the heat pump water heater, and the economic viability of the product for different types of customers, to project the size of the market opportunity. Hamilton identified the most promising segments to target, and outlined programs to overcome barriers to product acceptance.

Market program planning for Demand-Side Management programs: Hamilton principals have conducted a number of marketing reviews to identify the steps utilities must take to successfully introduce a new energy conservation program for residential and commercial new construction.

These reviews of utilities in the northeast, southwest, and midwest combined analysis of the utility's internal capabilities with a review of external market conditions. They addressed the utility's strategy, resources, organization, and capabilities, and evaluated what the construction trade and customers required before adopting the program. The reviews led to a specific series of steps to develop necessary marketing capabilities within the utility, and to promote the program successfully to and through the construction trade.

Training of trade allies to promote Demand-Side Management: Recognizing the critical role of realtors in residential customers' adoption of an energy-efficiency program for new construction, a southwestern utility wanted its realtors to better understand the value of the program it was promoting. A Hamilton principal developed seminars for the realtors that educated them about the program, about its value to homebuyers and realtors, and about how realtors could best communicate that value to homebuyers. The seminars were also an opportunity to refresh realtors on fundamental salesmanship skills.

Business development project for a gas utility: For a company owning an LDC, several pipelines, and a trading operation, Hamilton reviewed the company's skill base and physical assets to see what could be leveraged into new businesses. Options included home controls, customer service, co-generation, and management software. Two alternatives were chosen for implementation by the company.

Evaluation of the market for a new energy service: Hamilton performed market research with small investor-owned and managed utilities, governments, and large commercial gas customers to assess interest in a new gas service for managing their gas costs. The research uncovered the market segments most interested in the service, and Hamilton helped the client prepare a marketing strategy and action plan.

Marketing audit for a northeastern gas utility: Having recently elevated the marketing function to a vice-presidential post, this gas utility was considering the best way to organize its marketing function, set priorities for marketing activities, allocate resources, and measure marketing performance.

At the outset, the consulting team determined that the market for converting oil heating customers to gas heat was declining as saturation of the market was nearing completion. The utility had relied on this market for its last ten years of successful growth, but now further growth would have to come from somewhere else. For residential customers, the consultants analyzed existing marketing programs, computerized customer data, market survey data, and financial investment models. They identified the six most important residential market segments for the company to pursue, and showed how programs for these segments could be financially evaluated.

The consultants also greatly simplified segmentation of the commercial and industrial customer base and designed research to determine the potential of each of the ten segments identified. Finally, the consultants worked with the Vice President of Marketing to develop an organization and set of measurements that would carry out the segment-oriented marketing strategy.

With new markets identified comprising potential that doubles the existing size of the company, and a "game plan" developed with the consultants on how to exploit the markets, the client is pursuing aggressive growth goals with a new marketing organization in place.

New product and service marketing strategies: Hamilton has evaluated the markets for a number of new products and services developed by gas and electric utilities in the Northeast and Middle Atlantic regions. Hamilton developed marketing and operations strategies for the new products and services along with product and service roll out plans.