Results of a study released on June 7 by DEFG – a Denver-based consulting firm specializing in energy –show that more than half of a group of affluent Americans with incomes over $50,000 would use a prepay option from their utilities, if it were available.
Indeed, the top finding of the new report, “Prepay for Everyone: Prepay Energy and Higher Income Americans,” is that affluent Americans are more interested in a voluntary prepay option from their local utility than the general population by 11 percentage points.
“There is an assumption … in the utility sector that prepay energy is a second-class service … targeting low-income Americans. This survey was intended to gauge the interest and preferences of higher-income consumers in a voluntary prepay energy option offered by their local utility,” DEFG said of its objectives for the poll, conducted on its behalf by East Rutherford, New Jersey-based Russell Research.
The Russell Omnibus was conducted via the Internet among 992 adults during the first week in April. The 992 omnibus respondents yielded 515 respondents with household incomes of $50,000 or higher. An additional 89 interviews were conducted to bring the total sample size to 604.
“The top line finding may seem counterintuitive to some,” stated DEFG CEO Jamie Wimberly, adding, “But we already know that prepay in general is associated with high customer satisfaction for all segments because it is viewed as a more convenient way to pay bills and expenses, so it stands to reason that prepay energy would also be of interest to a broad range of Americans from all income levels.”
Among the primary findings of the consumer survey are:
- Affluent Americans perceive strong benefits of prepaid energy to help children outside the home manage their utility bills (36 percent) and managing utility bills remotely for vacation homes or other property (61 percent). This points to the need for messaging and marketing strategies differentiated from other segments for successful penetration.
- Seventy-seven percent of affluent Americans were interested in learning more about how prepaid energy could have a positive environmental impact. In addition, the top reason given by affluent Americans (69 percent) to use prepay energy would be to “reduce energy usage, help the environment and monitor usage closely.” Environmental messaging around prepaid energy could be very effective with this segment.
- Prepaid energy can be a bridge to other customer objectives. A good example is the alignment between prepaid energy and consumers desire to go paperless. Almost 60 percent of affluent Americans survey indicated a strong interest in going paperless.
“There are important differences on how you would position prepay energy to higher income Americans than other customer classes,” continued Wimberly. “For higher income Americans, it is more about making it easier and more convenient to remotely manage assets, e.g., vacation homes or rental property, and people, e.g., a student away at university, than anything else. Plus, as with prepaid Starbuck cards, affluent consumers are quickly moving towards cashless transactions. If the messaging and marketing are aligned specifically to the preferences and predilections of the higher income segment, I predict that you will have even greater enrollments by higher income customers than other customer classes.”