What Every Utility Needs To Know About SMB Engagement

It’s no secret that small- and medium-sized businesses (SMBs) have historically low rates of participation in utility initiatives. While SMBs represent 90 percent of a typical utility’s commercial customer base and consume 40-50 percent of commercial energy, less than two percent are enrolled in their utility’s energy efficiency program.

The high cost of customer acquisition and relatively small project size associated with SMB engagement may have deterred some utilities from focusing on this segment in the past. But as our industry shifts away from conventional energy efficiency programs and kWh savings and toward grid management and demand response, SMB participation will become a vital piece of the puzzle. The time for utilities to get ahead of the curve is not after this shift occurs—the time to act is now.

Informed by Ecova’s experience implementing utility programs and working with business clients of all sizes—bolstered by market research, industry reports and our powerful Retroficiency data analytics—we’ve created a roadmap for the SMB programs of the future.

Start with the right messaging. Program outreach and promotional materials must engage SMB customers at the right level, responding sensitively to their unique challenges and avoiding presumption about the sophistication of their systems and equipment.

Give them actionable information. SMBs are more likely to engage in energy efficiency measures when presented with data that is truly relevant to their type of business and building, illustrating exactly where they’re overspending in energy costs.

Keep entry costs low. Finding ways to offer low- or no-cost measures upfront can help SMBs overcome a major barrier to participation. Including an easily-managed financing solution—like balance-sheet-neutral Managed Energy Service Agreements (MESAs)—is even more critical.

Ensure rapid rewards. Money and time are both limited resources form most SMBs. Utilities can address both factors by providing immediate cost benefits from upgrades and streamlining program requirements to create the easiest possible participation experience.

Segment by vertical. The SMB market is incredibly diverse—the needs of a regional grocery store chain are different than those of a neighborhood florist. Conveying the direct benefits and business value of energy efficiency for each target vertical makes program participation more compelling.

This roadmap touches on the key themes of Ecova’s SMB approach. In future posts, I’ll dive into some of these key components in greater detail and share lessons learned from Ecova’s current program delivery. You can also watch Ecova’s recent webinar, 3 Ways Utilities Can Engage Their Small & Medium Business Customers Today.