Published on March 30th, 2010 | by Jennifer Kaplan1
Q&A: Andrea Fabbri, COO of EcoAlign, Focuses on Energy Star
On March 19th the EPA and DOE announced new steps to strengthen the Energy Star program. A few days later the GAO issued a report showing that the Energy Star Program certification process is (nicely put) “vulnerable to fraud and abuse.” The day after the GAO report was issued I sat down with Andrea Fabbri, COO of EcoAlign, the authors of a new EcoPinion report on consumer perceptions of the Energy Star brand, to talk about Energy Star, green consumers, eco-branding and what we need to do to reduce energy consumption.
JK: Hi Andrea. This new EcoPinion report about the Energy Star brand couldn’t have come at a more relevant time. Why all the focus on Energy Star?
AF: Given the stalemate of discussions around climate change, Energy Star is the only brand in US that has the power to help reduce energy consumption and, as a result GHG emissions. The problem is that the brand and its value have to evolve. We point that out clearly in our recent EcoPinion report and, once again, it’s about understanding and listening to customers. The EPA has announced changes to the Energy Star, but at EcoAlign we don’t believe the changes address the fundamental issues.
Energy Star is a “passive” brand, meaning that the economic advantages are not visible nor measurable to the consumer once a product begins its useful life, although consumers trust that there are benefits. Moreover, the Energy Star brand cannot control consumer behavior associated with the purchase of a new, efficient appliance. We live in an always-on world and it is intrinsic to human nature to use more – use the new TV more, keep the new light on, change the temperature setting, etc. If prices increase, Energy Star products will surely allow for more savings, but those savings will not visible to the consumer and all the consumer will see will be a greater expense, hence possibly making the Energy Star brand irrelevant and not useful in the eyes of people.
Energy Star is also suffering to some extent from its own success. The same light blue label today can be found on most home appliances and electronics. Given the fact that the Energy Star value stems off a comparison a consumer makes between an endorsed vs. not endorsed product, what will the value be in a world where everything is endorsed? If one adds the pervasiveness of the brand with the low, perceived economic value delivered to consumers, one can easily see that the Energy Star brand, with electricity bills increasing, will run the risk over time of losing its relevance – becoming part of the problem rather than the solution.
JK: So what do you make of the GAO report?
AF: The GAO findings are obviously a major disappointment for millions of consumers who depend on Energy Star when making product purchases and look to it as a guiding light for choices with built-in energy efficiency. I think it points to the need to re-evaluate the process, the standards and put in place a tiered structure that will differentiate among various levels of savings. A brand that can be seen everywhere, like Energy Star, and that begins to stumble into issues such as those uncovered by the GAO can quickly loose its credibility and swiftly become an ignorable commodity. One that has more of a beurocratic value than a behavior-changing force – especially in the era of social media where word of mouth is a world of mouth.
JK: Let’s take a step back. Why we should care about consumer perceptions?
AF: Most of the conversations and debates within the energy space today are centered around technology. The customers are not front and center. Look at the first three SmartGrid projects in Boulder, San Francisco and recently in Texas with Oncor. They have failed due to communications issues pertaining to customers. The conversation needs to move from technology to a customer-centric view of the value of that technology; this is critical if we want to see the billions of dollars that are being invested right now evolve successfully. For example, based on our research we know that customers label Smart Grid investments as “expensive Fantasy”. There is a gap between what customers expect the Smart Grid to be versus what will be delivered to them. Understanding customers expectations, needs, wants, and beliefs will be essential in order for the massive technology investments into Smart Grid to result in value rather than become cathedrals in the desert.
JK: What insights do you have about Energy Star and the green consumer?
AF: According to the last EcoPinion report only 4% of Americans buy Energy Star products purely out of altruistic motivations to protect the environment. It looks like most Americans believe protecting the environment is a sweetener or kicker to the primary motivation of saving money. It smells like an indulgence to me: buying Energy Star products to atone for our environmental sins.
The implication is that messaging strategies focused primarily on environmental impact will not be effective in driving further behavioral changes. This doesn’t surprise me. As said before, Energy Star is a functional brand positioned around economic benefits. Only in recent years has messaging and public awareness started to stress the relationship between energy savings and GHG emissions. In fact, also not surprising, younger respondents were significantly more likely (admittedly, from a small base) to say that “protecting the environment” is the important attribute. This is interesting, because it may show a higher level of understanding on the part of younger respondents. Energy Star products don’t really “protect” the environment. But because of their efficiency, they are gentler, and the footprint is lessened.
JK: What advice would you offer to businesses that want to promote energy efficiency?
AF: Walk the walk first. Start with your own business and engage your employees. If they believe in it and you’re authentic then you will likely succeed with your customers. Your employees are practically a Beta market. Secondly, energy conservation means different things to different people. Choose a strategy to promote energy efficiency that aligns with the worldviews and psychographic characteristics of your customers. Thirdly, be visible and engaging. Energy efficiency is pretty dry subject, so it is essential to make it fun.
Jennifer Kaplan is adjunct faculty in Marketing at Marymount University, author of the new book, Greening Your Small Business and a Senior Adviser to DEFG/EcoAlign.