Case Study

Energy Case Study: Hydro One


CLIENT:

Hydro One delivers electricity safely, reliably and responsibly to homes and businesses across the province of Ontario. It owns and operates Ontario's 29,000 km high-voltage transmission network that delivers electricity to large industrial customers and municipal utilities, as well as a 123,000 km low-voltage distribution system that serves about 1.3 million end-use customers and smaller municipal utilities in the province. Hydro One is wholly owned by the Province of Ontario.


CHALLENGE:

At a time of rising electricity rates and a changing electricity market, Hydro One wanted to strengthen its connection with customers and promote energy conservation. But in recent years, the utility found itself facing declining customer satisfaction and flattening enrollment in many energy conservation programs. Hoping to reverse those trends, Hydro One sought a way to better understand its varied audiences and create more effective programs and communications across the organization—from energy conservation programs to customer communications and channel strategies. 


SOLUTION:

To learn more about its residential customers, Hydro One analysts conducted a satisfaction survey, focusing on their customers’ attitudes towards rates, their image of Hydro One and customer service. They then classified all customers into four distinct groups based on a wide range of data: demographics, social values and lifestyle defined by the PRIZM segmentation system. Finally, they identified marketing strategies that might resonate with each of the four customer groups. For instance, the Flourishing Families group consisted mostly of comfortable suburban families in PRIZM segments like Suburban Gentry and Winner’s Circle. They were satisfied with the price of electricity but had a negative image of the company; in the future, Hydro One might target these customers for web-enabled and new premium services. Meanwhile, the Empty-nest Enthusiasts consisted of rural and suburban middle-class seniors and families from segments such as New Homesteaders and Nearly Empty Nests. They were slightly price sensitive and had a positive image of Hydro One; emphasizing the utility’s community service efforts would resonate with them. By applying this segmentation-based strategy, Hydro One intended to build stronger relationships with their customers and boost participation in energy conservation programs. 

RESULTS:

With its targeted marketing efforts, Hydro One was able to appeal to their customers’ needs and raise awareness and enrollment in its Peaksaver conservation program. In fact, the segmentation-informed marketing effort—with customized bill inserts and direct mail pieces going to households in each segment—allowed Hydro One to double their program enrolments by simply changing their marketing messaging and resulted in a 390 percent lift in participants over previous bill insert campaigns. Today, as Hydro One incorporates segmentation across the organization, the utility is transforming itself into a more customer-centric organization. “They’re starting to integrate segmentation into every aspect of their company,” says Rupen Seoni, Vice President and Practice Leader at EA. “It’s helping in their conservation programs, marketing, and community relations, and in the future might even extend to how to alert their customers about a service call, an outage or billing related issue. By turning to segmentation, Hydro One is able to serve all of its customers better.”