Segmentation in the 9 Box Model for incentive program implementation

DNV has implemented DTE Energy’s Commercial and Industrial energy efficiency program since 2009.

The program offers incentives for both electric and natural gas customers, with varying service territories. Throughout the state, there is a range of customers from small businesses in rural towns up through some of the largest industrial customers in the world. Given the broad range of customers, geography and available measures, the DTE program is an ideal test-bed for applying DNV’s 9 Box marketing and outreach strategy. DTE’s program has traditionally used the typical annual marketing plans, activity calendars and broad budgets to generate program awareness and participation. And while there were many tools already in place, the 9 Box Model forced us to re-think our approach and focus of our efforts unique to individual customer and contractor groups and maximize the effectiveness of our marketing and outreach tactics.

The DTE program long segmented customers (and will continue to…) by vertical segment, which is typical of many utilities and relies heavily on our contractor base to promote the program to their customers. However, in 2017, the program adopted a strategy based on the 9 Box Model. This new approach has given the DTE Energy program a new perspective on how we segment and market to our customers and how our outreach team interacts with our valuable contractor base. For example, we previously used DTE’s existing categories of “assigned” and “unassigned” customers as the basis for our outreach strategy. But the 9 Box differentiation of value to the energy efficiency programs gives a third category of “highest value.” This provides great clarity and insight into DTE’s largest customers, which drive almost 30% of our incentives annually.

The 9 Box Model also helps provide a common, unified strategy for our marketing and outreach efforts. By focusing our efforts into well-defined categories based on their value to the program, we have greater clarity in deciding how our financial and staffing resources are divided among various customer segmentation groups. Thus we can streamline budgets and deliver lean programs more cost-effectively, with greater accountability. Value differentiation brings a new level of focus and attention to our marketing and outreach efforts, allowing for greater differentiation of our efforts, messaging and resources to the different customers, contractors and market influencers.

In addition to the benefits to local teams, the common approach has allowed our program teams nationwide to work from, and improve, a common playbook. The 9 Box strategy supports but does not replace our marketing plans which further define the roll out of the tactics, it is a best practice to develop an effective go-to-market strategy when deploying resources, people and money.

My top three lessons learned from employing the 9 Box Model are:

Focus on the players. Less than .01% of all customers account for 30% of our incentive dollars annually. By allocating our resources and spending the appropriate time on these highest-value customers, we are cost-effective in our return on investment.
Align effort with realistic results. Highest, High and Moderate customers, contractors and influencers all have varying profiles and characteristics. By knowing exactly how to approach them and being realistic about what to expect in return, our team matches tactics, budgets and resources appropriate for what these groups bring in return.
The numbers don’t lie. Once we reviewed the numbers, and created our definitions of the various tiers, the pieces fell into place. It was hard to argue with the facts and was easy to achieve buy-in from our team on how we are aligned, and where our efforts were to be focused.

With this article, I hoped to bring a little clarity on how this model can be applied to any energy efficiency program. I also tried to illustrate and provide examples of how we focus our efforts and how this strategy helps to identify where we direct our resources. As this blog series continues to dive deeper into this strategy, please stay tuned for the next blog by my colleague Wendy Ayers who will explore the vendor/contractor group of influencers.

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