Marketplace Need

Average household use of natural gas has steadily declined by approximately 30% over the past 30 years as reported by AGA. This reduction comes from things such as appliance efficiency improvements, improved insulation, and demographic changes.

During this time many utilities have undertaken multiple restructurings to address the challenges of operating in a de-regulated environment. Utility staffs tasked with the responsibility for retaining and growing gas load in the residential sector have all too often been given fewer resources with which to
accomplish their sales and marketing goals. This consortium will develop methods and strategies to reverse the trend of declining gas use by maximizing opportunities to install additional appliances and capturing a majority of the new construction market.(If warranted by member needs and interests,
defending existing natural gas loads will also be considered by the consortia.)

While residential customers have a great affinity for natural gas use for heating, cooking, clothes dryers and domestic hot water, they remain unfamiliar with many of the newer gas product applications. Typically 85% of homes using natural gas only have a couple gas appliances totaling 2-4 burner tips. Yet, there are more than 17 different pieces of equipment that could be used in a variety of ways.

Clean burning natural gas fired products offer residential customers comfort, ambiance, and convenience. Different types of gas burning equipment are pictured below and offer a substantial increase in potential gas load of the residential market segments.

Technology

Strategies for Increasing Sales

1) Retention of existing customers
2) Increasing sales to existing customers
3) Gain market share of new construction
4) Sell additional technologies to new customers
5) Sell other products and services to increase revenue

The initial Phase of this consortium will concentrate on “low hanging fruit” by bringing additional technologies to the market place.

The first phase of this consortium will focus on strategies #2 - #4 above, typically the markets that are easier to attract. By addressing strategies #2 - #4, some of the deliverables from the initial phase will also have an impact on strategy #1. It is very difficult to implement new service offerings that are designed to grow revenue such as appliance service plans (strategy #5), however strategies #1 and #5 will be considered by the membership for action in a future phase of the consortium. Strategy #1 may also be considered as a discussion forum only during Phase I.

Deliverables

Phase I

Monthly discussion forum, review of available software, brainstorming sessions and market segment updates to find ways to build awareness of end uses of natural gas, as well as discuss other topics such as new equipment, retention, competition, threats, etc.

Develop repository of information on various gas appliances, incentive programs, etc. encompassing the “how to” aspect, possibly including various “approach to market” options.

Ads / Brochures / Marketing Materials that focus on newer and more innovative equipment ideas for home owners

• Create at least 12 new Bi or Tri fold Brochures for various technologies in an open electronic format and prioritized by consortia membership which will be used to develop corresponding print ads
• Power Points, stock speeches, product literature, etc. for newer technologies

Equipment manufacturer national contact listing

Trade show in a box, pick and choose materials

• Develop 5-6 backdrops as prioritized by members in electronic format that members can have customized and produced into posters or other material

Collaboratively created marketing plans

Best practices guide – builder incentives, HVAC incentives, successful programs

Developing and Maintaining Trade Allies & Distribution Channel Marketing Newsletters to builders/HVAC installers, develop stock articles

Bill Stuffers, etc.; that sell the ‘Gas Comfort & Convenience’, time-saving, or family values

Phase II

Web site

Rate making / structure: (Identify the structures that have worked to increase loads such as multiple appliance discounts, declining blocks, customer versus usage charge. This would be limited to identification of successful structures that marketing staffs can then use to work with their rate making group.)

Lead generation through Call Center, Service visits, or Web

Financing of equipment installation (This may be an integral part of marketing plans)

Rebates, coupons, vendor equipment & installation network (Rebates and coupon may fall out through one of the items listed in Phase I)

Sales Training

For more information contact:

Eric Burgis, Director – Residential and Commercial Markets
400 North Capitol N.W., Suite 450, Washington, D.C. 20001
Phone: 610-796-1946, Fax 202-824-9093, e-mail: eburgis@escenter.org

The ESC thanks the American Gas Association for their contribution to this effort.