Know your target market

A recently retired ACE board member helped the organization focus in on the wants and needs of the target market, writes Ron Lamberty. This column appears in the February issue of EPM.
By Ron Lamberty | January 18, 2016

Scott Parsley recently retired after 30 years at East River Electric, and 27 years on the American Coalition for Ethanol board of directors. Scott was one of the first board members and the first ACE president who wasn’t Merle Anderson. Scott is also my Aunt Sue’s brother, and I met him more than 40 years ago, when my family spent the day with a bunch of the Parsleys at Lake Campbell one Fourth of July.

I remember being in the middle of the lake, in a boat with Scott, my Dad, a dead motor and a storm rolling in. Scott and Dad were trying to get the engine restarted, and they were checking the electrical system with Dad turning the key while Scott held wires in the engine compartment to feel whether a charge was getting to the spark plugs. That’s right, Scott verified power was delivered by getting repeatedly shocked. Kind of like testing an outlet by sticking a fork in it. Memorable.

Some people would be shocked (sorry, couldn’t resist) to learn the problem turned out to be fuel related, several years before ethanol arrived in the fuel supply. And since I went there, I won’t resist drawing a cheesy parallel to Scott being comfortable with power in his hands, or willing to be a hands-on board member, even when it’s painful. All that is true. We appreciate Scott’s service to ACE, and wish him well in his retirement.

For this column, Scott came to mind for a different reason. One of the first times I proposed a promotional campaign, Scott said he liked the idea, asked about the target market, and then asked the question he would ask in several future ACE meetings, “Do you know if they’ll like it?” I started to answer, and realized I didn’t know. It was my opinion. I hadn’t asked anyone that wasn’t one of us.

Scott’s question came from his participation in the creation of the Touchstone Energy brand for rural electric cooperatives, a name and look his group didn’t think of, and didn’t care for when the advertising agency suggested it. The agency told them the dairy industry didn’t like their ideas at first, either, but were convinced by extensive research that said people who actually buy milk, liked this ridiculous, new, “milk moustache” campaign. The Touchstone Energy research was apparently similar and resulted in similar (albeit lesser known) success.|

There’s plenty of consumer research on motorists’ fuel buying habits, and focus group research done by ACE and other ethanol supporters falls in line with historical fuel buying studies. First, most people hardly ever think of fuel. When they have to, 70 percent of people say price drives their decision, 20 percent location and 8 percent brand. Those numbers drift a percent or two each year, but they’ve been consistent for decades. When you really press people, they’ll eventually say fuel quality is important, too.

Big Oil’s retail marketing approach suggests their numbers are the same. They rarely advertise fuel, unless it’s premium. Premium barely sells, but suggests brand quality. They spend money to brand locations they don’t own, in exchange for long-term contracts that dictate more expensive branded fuel offerings, and limit availability of less expensive, higher-octane ethanol blends. And with competitors doing the same, that pesky price issue is minimized.

Until someone in a market starts to sell those less-expensive, higher octane ethanol blends.
E10 went nationwide well ahead of the renewable fuel standard, without brand campaigns or big promotions. The lower price—made even lower with a tax credit—simply had to be explained to marketers. They ran with it from there. Today, lower-priced E15 and flex fuels include renewable identification numbers (RINs), and marketers need to understand how RINs work for them. We have to teach math, know fueling equipment and lots of rules and regulations. That’s not flashy or exciting like an ad campaign or special event, but research suggests there’s a 70 percent chance it’ll work.

Author: Ron Lamberty
Senior Vice President
American Coalition for Ethanol