5 Tips for Communicating with LMI Customers

Posted to Questline Digital in the Customer Care Group
image credit: Questline
Brian Lindamood's picture
Vice President, Marketing & Content Strategy, Questline Digital

Brian Lindamood is Vice President of Marketing and Content Strategy at Questline Digital, a marketing and technology agency dedicated to the energy utility industry. He leads the team that...

  • Member since 2020
  • 30 items added with 9,114 views
  • Jan 23, 2023

The cost of energy is rising, along with the price of everything else. After three years of economic ups and downs in the wake of the coronavirus pandemic, utilities may find that more customers than ever are in need of energy assistance programs — some for the very first time.

The U.S. Energy Information Administration projects that home heating costs will rise 28% this winter, due to surging fuel costs and colder weather. Meanwhile, 26 million households are already behind on their utility bills, by an average of $788.

Reaching low- and medium-income customers (LMI) has always been a challenge for utilities. Now, as this customer segment grows and their needs evolve, it’s critical for energy providers to have an effective communication strategy. Here are Questline Digital’s five tips for reaching LMI customers and letting them know about payment assistance programs.

Understand your audience

Low- and medium-income customers come from every walk of life, from rural communities to major metropolitan areas. They represent all ages and are made up of households with and without children. Income is the only characteristic that differentiates this group from higher-income customers. As a result, this group spends a lot more of their income on energy than other customers — in fact, twice as much as other customers, as a percentage of income.

These customers look to their energy providers for support to help ease their energy burden. But in terms of interests and motivations, this group is not unlike other utility customers. In its customer segmentation research, the Smart Energy Consumer Collaborative found common motivations for energy efficiency regardless of income bracket. Customers with incomes above $50,000 and customers with incomes below $25,000 shared the same two top motivations to save energy: No. 1 to save money, and No. 2 to save the environment.

Personalize messages

While, as a group, LMI customers have a lot in common with most other utility customers, they also want to be treated as individuals with their own unique needs and interests. Customers expect to have personalized digital relationships with the companies they do business with, and their energy providers are no exception.  

That means sending program promotions that are relevant to each customer. If a customer has participated in energy assistance programs in the past, they should receive reminders to enroll again or be told about related programs they may also qualify for. Customers who have not participated in the past should be connected to programs they may be eligible for. Billing and payment information, energy use, content engagement and other behavioral data can all be used to build targeted segments of customers who are most likely to enroll in each program.

Reach out proactively

The pandemic and rising inflation of the last few years prompted the entire industry to expand how we think of customers who may need assistance. In the wake of COVID, a lot of customers faced financial challenges for the first time; many of them had no awareness of energy assistance programs because they had never needed them before. Now, even those who aren’t considered LMI customers may be struggling with rising bills.

It's important to reach these customers proactively. Promote energy assistance and other payment programs before customers need them. For example, help customers prepare for high bills in the months before winter and summer peaks with efficiency advice as well as information about level billing, prepay, or other payment options. Likewise, energy assistance program promotions should be sent at the first sign of potential difficulty, such as a late or partial payment.

Make it easy to sign up

Informing customers about payment assistance programs is one thing. Getting them to actually sign up is another matter altogether. To boost conversion rates and maximize participation energy providers should make it as easy as possible to enroll in programs.

PSE&G found success with a Deferred Payment Arrangement program it launched at the height of COVID. The promotional emails included personalized information, such as each customer’s name, account number, and balance due. Signing up required just one click. The landing page was also prepopulated with the customer's information and presented their payment arrangement options as a simple drop-down menu. This ease of enrollment helped make the campaign, and the program, a success for the utility.

Educate and empathize

When energy bills are rising, utilities often lean on efficiency messaging to help customers save: Suggesting behavioral changes to use less energy, or promoting low-cost investments like smart thermostats that can reduce costs. While this advice is sound, it’s not enough, and it can leave customers feeling like their energy provider is blaming them for rising costs.

Utility outreach should take a more empathetic approach, pairing efficiency suggestions with supportive messages acknowledging that rising energy costs hurt everyone. These messages should also explain the reasons behind increases, such as rising fuel costs.

Most importantly, utilities should proactively connect customers with programs that can help. By understanding the needs of LMI customers, and creating targeted customer segments, utilities can proactively recommend relevant assistance programs or payment options that will help customers better manage their energy bills.

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Questline Digital is a marketing and technology agency that builds engaging experiences throughout the utility customer journey, boosting program participation and overall satisfaction.

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Thank Brian for the Post!
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