Determining effective marketing strategies to increase consumer participation in a local energy efficiency program using design of experiments

Worldwide energy demand has increased significantly over the last half century. A main reason for this increase in demand is the growth in population, which grew from 2.55 billion in 1950 to 6.396 billion in 2004. There are many negative effects associated with greater energy consumption such as increased levels of greenhouse gas emissions and higher energy prices. In the Charlottesville-Albemarle region of Virginia, the Local Energy Alliance Program (LEAP) - a community-based, non-profit group which facilitates energy retrofits of existing houses - was established in the fall of 2009 as a proactive measure to help mitigate these growing issues. There are many barriers which can deter prospective participants from pursuing energy efficient retrofits (including lack of awareness and understanding of the program, uncertainty of benefits and potential savings, high transaction costs, lengthy and involved time commitments, and other complex logistical issues). This paper reviews the team´s process of determining the most cost-efficient approach to increasing consumer participation in the LEAP program. Applying design of experiments principles, the team analyzed marketing strategies and various incentive types to provide an evidence-based recommendation to guide LEAP´s future efforts in attracting homeowners to perform work necessary to reduce energy consumption in their homes. Through statistical analysis of results, the team was able to determine that marketing media coupled with financial incentives yield a significant increase in response rate compared to a period of no exposure. However, the team could not conclude that one financial incentive had a more significant impact on response rate than another. Based on these findings, a supplementary cost analysis leads the team to propose that there may be more cost-efficient strategies to increase consumer participation other than the layered, multi-touch approach using paid media.