'Save Money' No Longer a Realistic Promise

Marketers of energy-efficient goods have already made the easy sales to early adopters, says a new report from the Shelton Group. Now they must get through to the "holdouts," who are fairly indifferent to energy conservation, while also reaching more-willing consumers who overestimate the degree to which they've made their homes more frugal. And they must do so at a time when rising electric rates mean that a simple "you'll save money" message isn't a realistic promise to be made on behalf of energy-efficient appliances, lightbulbs, windows and the like.In a general way, many people understand they've got a way to go in making their home energy-efficient. In polling for the report, the Shelton Group (an advertising and research agency that specializes in converting mainstream consumers to sustainability) asked respondents to assess the energy efficiency of their own home. Just under half the respondents rated it as "efficient" (35 percent) or "very efficient" (14 percent). Thirty-seven percent said it's "neither inefficient nor efficient," while 11 percent rated it "inefficient" and 3 percent "very inefficient." Still, many respondents to the survey (conducted over the summer) reported having taken significant steps to reduce their household's energy usage. Among such measures: 49 percent have put in extra insulation, 51 percent have installed a more-efficient heating or cooling system, 59 percent have bought an Energy Star-qualified appliance, and 49 percent have installed high-efficiency windows. IN AN UPHILL BATTLEThese numbers represent an accomplishment, but also reflect a difficulty for the future. "The early adopters have mostly completed their to-do lists," says the report, "so energy-efficiency marketers are in for an uphill battle as they try to sell energy-efficient products and home improvements to an increasingly less enthusiastic audience." More specifically, marketers need to "start targeting those who haven't embraced energy efficiency as a personal value, those who have less interest in the topic, and those who have serious barriers to overcome to be able to act." Marketers' success in reaching the early adopters should not blind them to the challenge they now face. "Instead of identifying people who've already completed energy-efficient improvements and finding more people like them, marketers must spend more time, more energy and ultimately more money communicating with the holdouts if any long-term progress is to be achieved," says the report.It's a reality that many marketers in this field have yet to grasp. "We think marketers will likely continue to push out their same messages as if there's still low-hanging fruit, and they'll be surprised when their sales start to dip," says Shelton Group president and CEO Suzanne Shelton. "The challenge with reaching the next layer of consumers—the middle-hanging fruit, if you will—is that they've got some very real barriers. The very rich simply don't see a need. If you're living in a McMansion, you're not conservation oriented and your energy bill is such a small percentage of your monthly overhead it's an annoyance rather than a front-burner issue. The messaging that can work with this group is a 'don't waste' message. No matter how well-off you are, nobody wants to pay the utility company more money than they should. "The next group are lower-middle-income, blue-collar folks who actually do desperately realize they're leaking energy out of their homes, they want very much to fix the problem, and they simply have no upfront cash to make it happen," Shelton continues. "These folks have changed behaviors and done the low-expense items, but they simply can't afford to add insulation, upgrade their furnace or put in new windows. So for these guys, it's not about a marketing message, it's about rebates and financing."QUANTIFYFING THE HOLDOUTSOne gets a sense of the dimension of the "holdout" cohort from a question in the survey that asked respondents to say how important energy conservation is to them "in the way it affects your daily purchase choices and activities." A majority said it's either "very important" (33 percent) or "important" (28 percent). But that still left a sizable minority saying it's "neither unimportant nor important" (26 percent), "unimportant" (8 percent) or "very unimportant" (5 percent). More simply, Shelton pegs holdouts at about 50 percent of the population.The unregenerate holdouts aren't the only challenging audience, though, for marketers of energy efficiency. There are also the many consumers who believe they've made more energy-saving changes than is actually the case. Lightbulbs are an all-too-shining example. Seventy-seven percent of respondents said they've already replaced "most" of their incandescents with compact fluorescent (CFL) or light-emitting diode (LED) bulbs. "However, we think that respondents are vastly overstating their CFL replacement activity," says the report. It cites a Department of Energy study last year that found CFL bulbs "in only about 11 percent of available sockets in homes." And it adds that industry sales figures don't support consumers' claims to have migrated en masse to the newer bulbs. In one sense, this means there's much more of an untapped market for energy-saving bulbs than consumers' self-reported activity would suggest. But it also means many consumers are oblivious about the degree to which they're still using the old energy-wasting bulbs. The report suggests that "Americans understand and accept that CFLs are much more energy-efficient than incandescents." Further, it says "price points have dropped so much that talking [consumers] into buying CFLs instead of incandescents is no longer the primary challenge." And this has clear implications for marketing of the energy-efficient bulbs, as "messaging should move beyond 'change a lightbulb' to 'change more of your lightbulbs!'" LOOKING TO SAVE MONEYWhen people do take steps to reduce their energy consumption, the chief reason (cited by 32 percent) is "to save money"—nearly double the number who said they do so "to protect our environment and save natural resources" (17 percent). Unfortunately, those intent on saving money don't necessarily see an obvious payoff for their energy-saving efforts. Instead, 64 percent said their home-energy bills have gone up. Several reasons are at work here, according to the report, including increases in electricity rates. Consumers also own more devices that are hungry for electricity, ranging from computers to flat-screen TVs to smartphones. And there's what the report refers to as the phenomenon of "moral licensing," in which people who've invested in making their home more energy efficient end up using more energy—taking longer showers, leaving more lights on, turning the heat up higher, etc.The upward course of utility rates means marketers of energy-efficient goods are prone to over-promising when they say a consumer will "save money" if they buy the new refrigerator or air conditioner or window or whatever. "Ultimately, saving money is an empty promise in a rising rate environment—a promise that shouldn't be made," says the report. Not that this is stopping brands from making it. "Almost every utility, retailer and appliance manufacturer advertising energy efficiency promises 'save money' in their ads," says Shelton. "It's a promise they can't really live up to as they have no control over what happens in the actual home, how the end consumer actually uses the new product." She emphasizes that consumers often have little sense of how much energy they're using. "Three-quarters of the population insists they're not using more energy today than five years ago, but what about all those things they're plugging in and charging?"Under the circumstances, then, what should marketers be saying? "The best promise is one of controlling costs: 'Energy costs are going to keep going up, take control while you can,'" Shelton advises. "Also, we found that 'energy independence' messaging works really well right now to encourage consumers to take action. That works very well as an end benefit, too, and helps avoid the whole 'save money' promise."COMFORT COUNTS, TOOIn any event, energy efficiency is not the only thing on people's minds when they consider making big-ticket improvements to their homes. In a question that asked respondents to choose among making their home "more energy efficient," "more comfortable" or "more beautiful," barely half (52 percent) chose energy efficiency. Thirty-three percent picked comfort and 15 percent opted for beauty. As these numbers indicate, there's a substantial constituency that would be receptive to a "comfort"-oriented message for energy-efficient goods. But marketers have done comparatively little to pursue this opportunity, says Shelton. "Though consumers tell us, via their answers to lots of different questions we ask, that increased comfort is a real motivator to making their homes more energy efficient, we haven't seen a campaign that really caused consumers to light up and go, 'Yeah! That's what I'm talking about!' Mostly we see that advertisers are putting so many messages into their efficiency advertising—save money/control costs/gain comfort—that the end result is all watered down, or we see that they just aren't going for the jugular with this one."

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'Save Money' No Longer a Realistic Promise

Mark Dolliver

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Mark Dolliver