Challenge Accepted Issue #01: Marketing heat pump water heaters
Challenge Accepted is a new monthly series where we identify and explore a unique marketing problem, ask, or general ponderance relevant to the better building and clean energy industries. We’ll start by outlining the details of the problem: What’s the “ask?” What interesting request or question are we as digital marketers facing lately, and what are the specifics of the situation? What’s the scope, the budget, the timeline, the audience… what’s the challenge?
Then, we’ll really dive in. We’ll lay out a possible solution – an approach to strategy, planning, execution and optimization. We’ll propose tactics and messaging; explore targeting and channel strategies, KPI tracking, and measurements of success – all culminating in a comprehensive look behind-the-scenes at the Energy Circle secret sauce (well, some of it – we won’t give away all of the ingredients).
Find out how we tackle some of today’s toughest marketing challenges. We are the digital marketers of Energy Circle, and this... is Challenge Accepted!
Today’s Challenge: Heat-Pump Water Heaters vs. A Lack of Awareness, Consideration, and Proactive Demand
In Short: Sell more Heat-Pump Water Heaters (HPWHs) to homeowners across the United States.
In Long: With hot water heating representing 18% of a typical home’s energy use, a new breed of heater--HPHWH’s--offer the easiest and highest return of any home energy improvement. The technology is well established, prices have declined, programs across the country incentivize the product, and they provide ancillary benefits like dehumidification. Yet, despite these advantages, the penetration of HPHWH’s is tiny relative to gas and traditional electric water heaters. It is estimated that HPWH’s have only 1 to 2% of the US market.
Demand is Usually Need Based and Urgent
Water heating systems typically don’t give homeowners a lot of (or any) warning before they fail. There isn’t a gradual decline in performance, and there are no symptoms indicating the system needs to be fixed or replaced. In most cases, it’s working one day and broken the next. This creates a market of “need-based demand,” where consumers are essentially at the bottom of the funnel the day they start looking for the product. They’re ready to buy the moment they enter the market because, well, people have become accustomed to having hot water.
Homeowners are Uninformed
“Need-based demand” can be a big help in marketing, because it reduces the need for multiple touchpoints, a lengthy sales process, and frequent tweaking to your messaging and tactics to address consumers at all stages of the funnel. But – what happens if your target audience is largely uninformed or unaware of the specific product or service you want them to buy? Now we kind of want consumers to do a little research, and maybe even engage with us multiple times so we can lead them down the funnel in the direction we want.
In the case of HPWHs, many homeowners looking to replace their water heating system may not know about all of the different options available to them, or understand the pros and cons associated with the different types of water heaters. Educating consumers about the energy efficiency, economic, and environmental benefits of HPWHs over gas, oil, or standard electric water heater systems will be a critical piece of addressing this marketing challenge.
Homeowners are Misinformed
We’ve established that not many people know about HPWH’s. But even when introduced to the new technology, as is the case with any product out of the mainstream, consumers can be skeptical about how well it works, or how good the ROI actually is at this point. They may even be making assumptions based on dated or inaccurate information from when the technology first hit the market, and so will have to be re-educated about today’s updates and improvements.
To address this challenge, our marketing efforts will also need to establish and promote credibility, awareness, and consideration for the technology behind HPWHs to reduce skepticism and dispel misconceptions. Disseminating updated facts and data about how HPWHs are no longer experimental new technology, and how they are a tested and superior option to older systems, will play a key role in this digital marketing plan.
The Approach: Strategy & Tactics
Now that we’ve identified the ask and the challenges, we’ve got the foundation of our secret sauce! From here, we do a little reverse engineering to determine the approach, and then identify the tools and tactics to execute that approach.
Strategy: Educate & Inform (Generate Awareness & Consideration)
If homeowners are unaware or are misinformed about the availability and benefits of a heat-pump water heater, we need to educate and inform them. Offer consumers accurate and helpful information, where and when they’re looking for it.
Geo-Targeted Paid Search: Capture consumers when they enter the funnel and are actively searching for a solution (so, when their water heater breaks). By only targeting "emergency" related keywords, PPC will be an efficient tactic since ads only show for emergency searches. Target relevant keywords and phrases that imply urgency like “24 hr plumber” or “emergency HVAC contractor” as well as terms that imply need-based demand like “broken heater replacement” or “new water heater.” Don’t forget about long tail and question based queries for all those Alexa and Google Home voice searchers out there… “Ok Google, what to do when your hot water heater stops working?” and “Alexa, find someone who can fix my water heater now!” And yes, question-based searches are certainly on the rise — you can see the numbers in our recent blog.
Comprehensive, Conversion Optimized Landing Pages: We’ve captured their attention with a targeted paid search ad. Now, we need to deliver the information. Drive them to a credible HVAC or Plumbing contractor’s website that contains comprehensive, easy-to-follow information on why they should consider upgrading their system to a heat-pump water heater. We know they likely need a new system at this point – give them compelling, digestible data that effectively supports the argument for an upgrade while offering an immediate, direct, and cost-effective path to getting one. (Remember: it’s often an urgent situation and consumers are looking for a quick solution; reflect this sense of urgency in the landing page content and calls-to-action).
Utilize Third Party Credibility and Content. Organizations and thought leaders such as the Department of Energy or the Northeast Energy Efficiency Alliance can be valuable resources. Use their market research to support your own assertions.
Strategy: Create and Nurture Proactive Demand (Build a Broader Audience)
Waiting for someone’s water heater to break to engage with a potential customer inherently limits the opportunity. To broaden the narrow need-based audience, we need to tap into a pool of potential customers whose motivations for purchasing a new water heater are slightly more diverse, giving us a larger base to target, and hopefully a more consistent and predictable stream of new business.
This broader audience may not be actively searching for a new water heater, because they don’t have an immediate need. But, they may have tangentially related motivations - like a desire to reduce their carbon footprint, lower their energy costs, or increase their home’s value. This audience is primed for creating proactive demand for heat-pump water heater systems.
Topics Targeted Display - PPC: If they’re not actively searching, place your message where they are passively browsing. With well-crafted dynamic messaging and visually compelling graphics and images, display ads can be placed inline with content that’s related to the product or service you’re marketing. Think of image and text ads that appear alongside that article you’re reading about the “10 Best Ways to Lower your Utility Bill.” That’s a topic-targeted display ad and it’s a great way to drive users to your website when they’re not actively searching for your target keywords.
Remarketing - PPC: Incorporate remarketing into the display PPC strategy as well. Maintain awareness and encourage recall by cookie-ing your website visitors and serving them relevant ads that drive them back to your site for a second or third time. Create a sense of urgency by promoting limited-time rebates or incentive programs in your display ad text or landing page content. Remarketing ads are an effective method for keeping your brand and product top of mind with consumers who have passively engaged with your messaging in the past but weren’t quite ready to convert.
Email Marketing: Choosing to replace your heating system when it’s not broken in order to take advantage of the economic or environmental benefits is the definition of proactive demand. Where better to start mining for those go-getters than in your own customer list? HVAC and Plumbing contractors who have a list of previous water heater install customers can use those email addresses to send direct, personalized messaging, information and offers to kick-start a funnel of potential customers interested in proactively upgrading their systems.
We’ve identified the ask. We’ve laid out a strategy that addresses each challenge and determined which tactics are best suited to implement that strategy. Next comes execution, analysis, and optimization. Implement the strategy and tactics across their various channels and track performance and results. Evaluate metrics like click-through rate, form submissions, phone calls, live chat engagements, page depth per session, and number of new users to determine how well the tactics are educating and growing the target audience, and raising awareness of / increasing consideration for heat pump water heaters over alternatives like gas, and standard electric heating systems.
Analyze performance results by looking at demographic, geographic, and behavioral trends. There’s a seemingly infinite number of ways you can segment your audience and optimize your marketing tactics to better reach potential customers. Once you have enough data, you can prioritize elements like the time of day or day of the week you serve ads or send emails, the devices to which you allocate more budget, the cities or towns where specific messaging is served, the platform and channel you use to communicate with certain demographics, and SO much more.
In order to sell more heat pump water heaters to homeowners in the US, consumers need to be better informed about the technology and how it works, as well as the environmental benefits, and available financial incentives for upgrading their systems. Through enhanced web content, targeted paid search, display and email marketing campaigns, we can grow the potential customer base and gradually create proactive demand for the systems, generating a more consistent and predictable flow of leads for new heat pump water heater install jobs to home performance, HVAC and plumbing contractors.