By DOUGLAS MILLER and LARRY ZARKER
Peer Diffusion: A form of communication within and between networks of people that (1) occurs through varying forms of social comparison and social interaction around an innovation (i.e., a new behavior, idea, or technology) and (2) ultimately promotes the broader adoption of that innovation.
In homes across the United States, growing numbers of homeowners are installing solar panels on their rooftops, LED light bulbs in their lighting fixtures, and programmable thermostats on their walls. Homeowners continue to report that they want energy-efficient homes and the suite of benefits these homes provide, including increased property value and improved comfort, health, safety, and peace of mind. The overall U.S. residential renovation market also expects continued growth as homeowners keep spending on general home improvements.
Nevertheless, the overall rate of U.S. residential energy performance improvements decreased over recent years — with almost half of homeowners reporting that they have done nothing to improve the energy performance of their homes.
This juxtaposition between homeowner surveys and actual investments reveals an opportunity for the home performance industry — from residential energy service providers to utility/third-party program administrators — to enhance how home performance contractors engage with homeowners around quality whole-home energy upgrades to help unlock the U.S. energy upgrades market.
Informed by leading research and real-world examples, Rocky Mountain Institute (RMI) and Building Performance Institute (BPI) outline in a new report the key elements of a “peer diffusion” strategy for contractors to promote social interaction and social comparison among homeowners around these home improvements. By deploying a robust strategy using online and in-person tactics to enable peer diffusion before, during, and after projects, contractors can help make energy upgrades a “must have” in homes and encourage increased investments.
Promoting social interaction and social comparison
Homeowners make home improvement investment decisions based on financial, social, and emotional factors. Consider, for example, how half of homeowners report that their families and friends influenced their previous home buying decisions. Furthermore, research suggests that the strength and frequency of peer-to-peer communication shape the broader adoption or “diffusion” of a given innovation (i.e., a new behavior, idea, or technology).
Home performance contractors tend to rely on the financial motivations — namely, energy cost savings — when promoting their services. While financial motivations are important, they are often overemphasized as a driver of choice and insufficient on their own to motivate homeowner investment decisions. Home performance contractors may therefore be underselling energy upgrades by underplaying the role of social and emotional motivations for home improvement decisions.
Contractors can leverage the influence of peers on decision-making to broaden the appeal of energy upgrade investments. By promoting greater social interaction and social comparison around home energy upgrades, contractors can empower homeowners to share and show off their own home energy upgrade projects among their family, friends, and neighbors. This will help make these investments more visible, conversational, and experiential. As more homeowners see their peers investing in energy upgrades, the more likely they will want to “keep up with the Joneses” and make similar investments.
Strategic online and in-person tactics
Contractors can use online and in-person tactics to promote greater social interaction and social comparison around home energy upgrades within and between customers’ peer networks. They may find it helpful to use a framework that is organized by project phase and platform along the lines of the illustration provided below when they develop their own peer diffusion strategy.
Contractors have numerous opportunities to better engage with homeowners online and in-person during different project phases, including:
Before: Contractors can use various tactics to encourage more homeowners to get an energy audit, increase follow-through with recommended investments, and inspire homeowners to find ideas and interact with others about options for their own energy upgrade. For example, contractors can organize group energy assessments where attendees watch contractors use thermal cameras and blower doors to pinpoint specific opportunities to reduce energy costs and improve comfort and health. It turns out that after homeowners see the money and energy wasted in a house similar to and nearby their own, they become more likely to get an energy upgrade in their own home.
During: Contractors can use tactics to demystify and celebrate home energy upgrades, increase the know-how of current and future homeowners, and bolster interest in residential energy industry employment. For example, contractors can encourage customers to post project updates on social media platforms like Facebook, Instagram, and Twitter, or assemble photo galleries on platforms such as Dropbox or Google Drive and share them with family members and friends — increasing the visibility of energy upgrade projects underway within peer networks.
After: Contractors can use tactics to encourage homeowners to show off their energy upgrades and provide word-of-mouth referrals. Contractors can set aside marketing budget funds for post-renovation events to generate new business leads among the customer’s peer networks, or partner with modern and historic home tour organizations to capture the attention of large audiences who attend these tours in cities nationwide. In addition, contractors may want to help show customers how to showcase their completed energy upgrade projects on property listings to help increase property value.
You can read more about these recommendations and others in the full report.
Home performance contractors will likely make a number of strategic considerations when assessing the potential of online and in-person tactics based on financial costs to operationalize and maintain a given tactic, ease and timing of implementation, the depth of social interaction and social comparison each tactic creates, and resulting impacts on business development. Contractors will also likely modify their strategy over time depending on what works well in a given market.
Showcasing effective homeowner engagement strategies
RMI and BPI would like to support and showcase home performance contractor companies who are interested in (or are already) deploying peer diffusion tactics that make quality whole-home energy upgrades more social and their uptake more visible. Those who are interested in collaborating with RMI and BPI to develop bold demonstrations of peer diffusion strategies to unlock the U.S. energy upgrades market should contact us at firstname.lastname@example.org.
Douglas Miller is a senior associate at the Rocky Mountain Institute. Larry Zarker is the CEO of the Building Performance Institute, Inc. This post originally appeared at RMI Outlet.