Electric Growers

Anaïs Jan, The PwC Approach - April 22nd 2020

1 burglary every 23 seconds
Executive Summary
Successful launch of a home security system on the US market
Electric Growers is launching a new home security system on the US market at a national scale.
Their long-term objective is to become the #1 security systems provider in the country. In order to
succeed in their launching phase, they want to make sure they are focusing their marketing strategy
on the 3 most relevant customer segments and the 5 cities where they have the best potential to
grow.

To gather perspective and build consensus, we started by engaging with the stakeholders at EG:
- Michelle, Vice-President of Operations
- David, Vice-President of Marketing
- Greg, Operations Manager
- Barbara, Lead Data Analyst

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Methodology
Get a glimpse of our approach to solving Electric Growers’ challenges
Hypotheses
We formulated various hypotheses with regards to customer segments, cities of interest and
targeting strategy:
• The ideal customer segments that we should be targeting are persons that want to install an advanced high tech security
system in their home. They could additionally be customers who would switch security system brands because they do not
have trust in their current systems or want to upgrade its quality.
• The ideal cities that we should be targeting should be the ones with the lowest competition, where crime rates, reported
burglaries, property crime rate and homicides are on the rise.
• The ideal cities that we should be targeting should be the ones where there is a lot of competition that customers are not
happy with.
• The ideal cities that we should be targeting should be the ones with the most break ins where home security systems are
already in place.
• To approach our leading customer segments, we should advertise through media platforms they trust, sell through local
agents and online channels.

In this study and with the available data, we will confirm or disprove these hypotheses.

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Data Collection
In terms of data collection, Electric Growers provided us with external data sets:
• Survey Data, Third Party Survey Data
• City Pop by Segments, Annual Survey of Government, American Housing Survey
• City-wise Demographics, US Census Data, Population Estimates Program

We double checked the accuracy of the data with the Lead Data Analyst at EG and complemented
with structured data with unstructured data, being our conversations with the stakeholders and the
video they sent us.

To address both qualitative and quantitative data, we ran comparative analysis to detect patterns
within very large data sets, factor and regression analysis to identify relationships between
variables, segmentation analysis to divide broad category into subsets that have common features,
needs, interests and priorities, sentiment analysis and sentiment analysis to help us identify and
categorize opinions.
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Exploratory Analysis
Let’s have a look at the exploratory analysis on customer segments and cities to target
Customer Segments
Let’s start with our customer segments
 Propensity Index
The Propensity Index - determining TOP Customer Segments - has been based on the following criteria:

Security
• Own burglar alarm Weighing for 18% of the index
• Would like to buy security devices Weighing for 28% of the index

Insurance
• Has residential insurance for primary residence Weighing for 15% of the index
• Has residential insurance but NOT satisfied with primary company Weighing for 15% of the index
• Switched residential insurance for more / better policy features Weighing for 6% of the index

Technology
• Prefer products with the latest technology Weighing for 6% of the index
• Willing to pay more for top quality electronics Weighing for 6% of the index
• Among 1st of my friends to try new technology products Weighing for 3% of the index

Shopping Habits
• Buy based on quality, not price Weighing for 3% of the index
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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 Propensity Index

Shopping
Security Insurance Technology
Habits
Switched
Household Residential Prefer Among 1st of Propensity
Customer Segments Residential residential Willing to pay
Counts Would like to insurance but products my friends to Buy based on Index
Own burglar insurance for insurance for more for top
buy security NOT satisfied with the try new quality, not
alarm primary more/better quality
devices with latest technology price
residence policy electronics
company technology products
features
Index calculation weight 18% 28% 15% 15% 6% 6% 6% 3% 3% 100%
Well-Heeled Affluent 2,647,809 26.66% 44.42% 95.47% 13.52% 4.03% 25.43% 28.59% 12.96% 35.25% 0.3852
Prosperous Achievers 3,653,326 24.58% 23.26% 94.76% 13.60% 2.92% 24.48% 26.10% 11.26% 36.83% 0.3184
Elite Households 3,782,280 25.26% 20.44% 90.41% 14.38% 4.73% 27.03% 30.50% 14.59% 35.69% 0.3123
Upscale Matures 2,990,662 20.46% 15.08% 94.24% 13.06% 2.18% 22.34% 21.63% 9.53% 35.72% 0.2813
Young Affluent Mobiles 5,455,273 18.51% 7.84% 84.59% 17.14% 3.75% 29.03% 30.89% 16.29% 34.86% 0.2614
Young Upscale Families 6,370,407 20.80% 5.77% 87.85% 13.71% 4.65% 26.41% 27.76% 13.32% 34.88% 0.2557
Mass Markets 8,944,892 13.55% 9.03% 77.60% 12.92% 4.14% 24.93% 25.03% 14.49% 31.21% 0.2316
Elder Midscale Class 5,126,538 11.54% 8.28% 86.71% 10.30% 2.40% 22.26% 19.53% 7.87% 33.34% 0.2284
Comfortable Retirees 3,502,870 6.87% 3.46% 76.42% 10.12% 1.45% 20.74% 15.34% 8.22% 31.25% 0.1862
Diverse Workers 9,067,386 7.81% 3.61% 61.31% 12.04% 2.41% 22.97% 21.18% 13.25% 30.71% 0.1753
Young Urban Masses 6,709,160 5.62% 2.03% 44.12% 7.44% 1.62% 24.62% 25.42% 15.28% 30.84% 0.1380
Modest Families 3,922,926 3.67% 5.72% 31.49% 8.30% 2.35% 23.78% 22.10% 15.56% 28.26% 0.1244
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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 TOP Customer Segments
Based on Michelle’s recommendations and the results of our propensity index, we prioritized the
following customer segments, customers who want to install advanced hi-tech security system
and/or switch security system brand.

• #1 Segment • #2 Segment • #3 Segment

• 0.385 propensity index • 0.318 propensity index • 0.312 propensity index
• 2,647,809 households • 3,653,326 households • 3,782,280 households

Well-Heeled Prosperous Elite

Affluent Achievers Households

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #1. Well-Heeled Affluent
• Married couple

• Between 45 and 64 years old

• With or without children living at the house, <18 & 18+

• HH income from $149,999 on

• IPA from $2 Million on

• Have been living in the same house for more than 5 years

• Owner of their house

• House value from $200,000 on

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #1. Well-Heeled Affluent - Demographics
Householder Age Householder
N/A 25-34 Marital Status
2,9% 0,3% 35-44
2,3% 83,3%

45-54 5,7% 11,0%

35,9%
55-64
58,5% Single Married Other

HH Size Children 0-17

N/A
5+ People 3,0% 1 Person living at home
8,9% 8,2% 71,8%

3 or 4
People 13,4%9,5%
38,9% 2,1% 0,5% 2,8%
2 People
41,0% 0 1 2 3 4+ N/A

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #1. Well-Heeled Affluent - HH Finances
HH Income Income Payment Agreement
55,1%
$100,000 - $149,999 2,0%

$150,000 - $199,999 51,4%

18,4%
12,5% 10,0%
$200,000 - $249,999 20,3% 3,9%

$250,000+ 26,4% $250K $500K $750K $1 Million $2 Million+

- $499K - $749K - $999K - $2 Million

Length of residence Rents Tenure Value of owned home

83,0% Home 47,0%
2,6% 42,0%

Own
Home 5,7%
4,1%
11,9% 97,4% 1,3%
5,1%
Under $99,999 $100,000 - $150,000 - $200,000 - $500,000+
<1 Year 1-4 Years 5 Years+ $149,999 $199,999 $499,999

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #1. Well-Heeled Affluent - Targeting Strategy
Awareness Purchase

Develop awareness and consideration through media / advertisement, and lead to a purchase 39.2% bought primary policy residential
insurance through a single company agent
Internet TV Newspaper Radio Magazine
25.9% prefer to shop at specialized stores
Media trusted the most 17,3% 12,1% 11,9% 4,4% 3,2%
33.9% purchased online in the past year

Are amusing
Give good info on new products/services Yearly online shopping
Give good info on consumer product use 80,5%

Give useful info on bargains

Appear at inconvenient moments

Are alike 12,0%
2,2% 5,2%
Are repeated too often
Have no credibility <$50 $50 - $200 $200+ N/A

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #1. Well-Heeled Affluent - Targeting Strategy
Retention Cross-Selling

Retain our customers thanks to an active community and a loyalty program Allow for our customer base to increase
expenditure acquiring complementary
Preferred service channel for Residential insurance switch products and/or services
residential insurance Combined
reason
Moved
53,8% policy 7,1%
49,1% 11,3%
47,9%

Better 62.6% prefer auto & residential with

Lower
reputation
price same carrier
13,9%
48,5%

More /
better
policy
features 22.2% will buy on credit rather than
Local Agent Phone Website 19,1% wait
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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #2. Prosperous Achievers
• Married couple

• Between 55 and 74 years old

• Without kids living at home

• $100,000 < HH income < $149,999

• $100,000 < IPA < $499,999

• Have been living in the same house for more than 5 years

• Owner of their house

• $200,000 < House value < $499,999

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #2. Prosperous Achievers - Demographics
Householder Age Householder
N/A 35-44 Marital Status
2,8% 0,4%
45-54 74,7%
75+ 14,9%
21,2%

19,8%
5,5%
65-74 55-64
24,6% 36,0%
Single Married Other

HH Size Children 0-17

5+ People 1
3 or 4 3,7% N/A Person living at home
People 3% 15,8% 87,8%
21,1%

2 5,4% 3,1% 0,6% 0,3% 2,8%

People
56,6% 0 1 2 3 4+ N/A

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #2. Prosperous Achievers - HH Finances
HH Income Income Payment Agreement
$250,000+ 5,5% 30,6%
28,4%
$200,000 - $249,999 3,9%
$150,000 - $199,999 9,6% 15,3%
13,0%
9,6%
$100,000 - $149,999 66,0%
2,0% 1,1%
$75,000 - $99,999 12,4%
Under $74,999 2,6% <$99K $100K $250K $500K $750K $1 Million $2 Million+
- $249K - $499K - $749K - $999K - $2 Million

Length of residence Rents

Tenure Value of owned home
86,6% Home 51,3%
4,6%

22,0%
14,0%
8,7%
Own 4,0%
10,2% Home
3,2%
95,4%
Under $99,999 $100,000 - $150,000 - $200,000 - $500,000+
<1 Year 1-4 Years 5 Years+ $149,999 $199,999 $499,999

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #2. Prosperous Achievers - Targeting Strategy
Awareness Purchase

Develop awareness and consideration through media / advertisement, and lead to a purchase 38.2% bought primary policy residential
insurance through a single company agent
Internet TV Newspaper Radio Magazine
24.4% prefer to shop at specialized stores
Media trusted the most 13,7% 13,6% 13,3% 4,7% 3,9%
30.2% purchased online in the past year

Are amusing
Give good info on new products/services Yearly online shopping
Give good info on consumer product use 74,5%

Give useful info on bargains

Appear at inconvenient moments

Are alike 15,3%
6,9%
Are repeated too often 3,3%

Have no credibility <$50 $50 - $200 $200+ N/A

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #2. Prosperous Achievers - Targeting Strategy
Retention Cross-Selling

Retain our customers thanks to an active community and a loyalty program Allow for our customer base to increase
expenditure acquiring complementary
Preferred service channel for Residential insurance switch products and/or services
residential insurance reason
Combined Moved
57,6% policy 4,8%
7,1%
45,0%
41,5%
65.4% prefer auto & residential with
Better
reputation
same carrier
11,3%

Lower
More / price
better 60,2%
policy 22.6% will buy on credit rather than
features
Local Agent Phone Website 16,7% wait
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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #3. Elite Households
• Married couple with children under 18

• Between 34 and 54 years old

• $100,000 < HH income < $199,999

• $100,000 < IPA < $499,999

• Have been living in the same house for more than 5 years

• Owner of their house

• $200,000 < House value < $499,999

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #3. Elite Households - Demographics
Householder Age Householder
65-74 N/A
2,8% 3,5%
25-34 Marital Status
55-64 9,1%
11,2% 84,1%

6,2% 9,7%
35-44
45-54 37,6%
35,7% Single Married Other

HH Size 1 person Children 0-17

N/A 5,1%
5+ people 3,4% living at home
2 people
19,8% 31,4%
19,8% 29,9%

21,3%

9,9%
4,0% 3,4%
3 or 4 people
51,9%
0 1 2 3 4+ N/A

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #3. Elite Households - HH Finances
HH Income Income Payment Agreement
42,4%
35,9%
$100,000 - $149,999 54,2%

$150,000 - $199,999 26,3%

7,9% 8,4%
$200,000 - $249,999 10,1% 4,8%
0,7%

$250,000+ 9,4% $100K $250K $500K $750K $1 Million $2 Million+

- $249K - $499K - $749K - $999K - $2 Million

Length of residence Tenure Value of owned home

Rents 65,3%
59,6% Home
13,8%

27,4% Own 21,3%

Home
9,5%
12,9% 86,2% 2,9%
1,0%

Under $99,999 $100,000 - $150,000 - $200,000 - $500,000+

<1 Year 1-4 Years 5 Years+ $149,999 $199,999 $499,999

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #3. Elite Households - Targeting Strategy
Awareness Purchase

Develop awareness and consideration through media / advertisement, and lead to a purchase 35.1% bought primary policy residential
insurance through a single company agent
Internet TV Newspaper Radio Magazine
25.5% prefer to shop at specialized stores
Media trusted the most 21,0% 11,3% 10,6% 4,7% 3,0%
37.5% purchased online in the past year

Are amusing
Give good info on new products/services Yearly online shopping
Give good info on consumer product use
76,8%
Give useful info on bargains

Appear at inconvenient moments

Are alike 12,8%
8,0%
Are repeated too often 2,4%

Have no credibility <$50 $50 - $200 $200+ N/A

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 #3. Elite Households - Targeting Strategy
Retention Cross-Selling

Retain our customers thanks to an active community and a loyalty program Allow for our customer base to increase
expenditure acquiring complementary
Preferred service channel for Residential insurance switch products and/or services
residential insurance Moved
reason
7,3%
52,0% 50,6% Combined
46,4% policy
11,6% 62.7% prefer auto & residential with
Lower
Better price same carrier
reputation 46,7%
14,8%

More /
better
policy
features 22.8% will buy on credit rather than
19,5%
Website Local Agent Phone wait
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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
Cities to be Targeted
Let’s have a look at the cities to first launch our home security system
 Attractiveness Score
The Attractiveness Score - determining TOP Cities to target - has been based on the following criteria:

Criminal Victimization
• Property Crime Rate per 1000 HH Weighing for 30% of the index
• Burglaries per 1000 HH Weighing for 25% of the index
• Crime Rate per 1000 HH Weighing for 15% of the index

Development
• Population Growth Rate Weighing for 15% of the index
• Housing Construction Weighing for 15% of the index

Next, filters were applied to focus on our key customer segments on cities of a certain size:

• Our TOP 3 customer segments are Well-Heeled Affluent, Prosperous Achievers and Elite Households
• There has to be more than 5,000 households belonging to our TOP segments within the city
• The Attractiveness Score of the city has to be over 60

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 Attractiveness Score

Criminal Victimization Development

Segments' TOP
Household Penetration Segments' Property Attractiveness
State City Burglaries Crime Rate Population Housing
Counts in HH Penetration Crime Rate Score
per 1000 per 1000 Growth Constructio
number % per 1000
HH HH Rate n
HH
Attractiveness Score Calculation 30% 25% 15% 15% 15% 100%
Texas Houston 562,062 123,372 21.95% 92.7 9.6 224.5 1.77% 1.06% 63.9
New York New York City 405,625 85,249 21.02% 167.3 19.6 459.3 0.74% 0.94% 124.0
California San Francisco 185,434 47,987 25.88% 121.6 8.5 279.6 1.68% 0.44% 80.5
Alaska Anchorage 48,897 14,903 30.48% 117.9 17.4 289.1 0.65% 0.22% 83.1
California Berkeley 26,088 7,220 27.68% 97.8 2.5 212.1 1.62% -0.24% 61.8
California Santa Clarita 9,134 6,779 74.22% 133.4 10.9 300.4 -1.53% -0.15% 87.8
California Oxnard 28,475 5,938 20.85% 112.1 6.7 255.2 1.40% -0.60% 73.6
California Antioch 17,471 5,884 33.68% 119.9 13.3 288.4 1.43% 0.53% 82.6
California Fairfield 18,790 5,184 27.59% 103.1 7.2 233.7 1.75% 0.64% 67.8

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 TOP Cities to be Targeted
Based on Michelle’s recommendations and the results of our attractiveness score, we prioritized the
following cities, where our TOP customer segments live and our home security system could have a
great development potential.

Houston, TX New York City, NY San Francisco, CA Anchorage, AK Berkeley, CA

123,372 85,249 47,987 14,909 7,220

HH belonging to our HH belonging to our HH belonging to our HH belonging to our HH belonging to our
customer segments customer segments customer segments customer segments customer segments

63.9 124.0 80.5 83.1 61.8

Attractiveness score Attractiveness score Attractiveness score Attractiveness score Attractiveness score

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
 TOP Cities to be Targeted
Additionally, we
notice that the state
of California is a
really interesting
cluster for a 2nd
development phase
on the US market as
smaller cities around
San Francisco,
Berkeley and Los
Angeles show good
potential.

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Source: Data provided by Electric Growers; Data analysis by PwC. April 2020. Confidential information for the sole benefit and use of Electric Growers.
Conclusion
We have such interesting challenges ahead of us!
Recommendations
Customer Segments to focus on Cities to target as a priority

• Houston, Texas
Well-Heeled Affluent
• New York City, New York

• San Francisco, California

Prosperous Achievers • Anchorage, Alaska

• Berkeley, California

Elite Household

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