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The seasonal member: a case study.

Because our seasonal members are usually a bit "different" from the average people on our lines, it is sometimes tempting to consider them a necessary evil, feel that they may not be worth all the special attention they demand and show a sigh of relief when they have exited our offices. And so it is with any member subgroup, whether they be residents of the upper crust subdivision on the outskirts of town, irrigators, a mobile home park or anybody else whose needs and priorities make them a more difficult load to serve.

In this article, Al Klose reports on the results of a research study undertaken by Polk-Burnett Electric Cooperative in which they learned a great deal about their seasonal members. Their goal was to identify who the seasonals are demographically, learn some of their present energy use patterns and then determine what else the cooperative might be able to offer them. It's a project well worth emulating, and we appreciate Polk-Burnett's willingness to share their results with us.

Many markets have sales that fall into regular seasonal patterns. Hardware stores have traditionally seen spring as the best opportunity for the sale of lawn and garden supplies.[1] Grocery stores find regular seasonal patterns for the sale of products such as soup, ice cream, and soft drinks.[2] Research has shown that "the average expenditure for jewelry and watches in the fourth quarter is double that in any other quarter, and television, radio and sound equipment purchases are a third higher."[3] From industry to industry, managers are faced with seasonal products and seasonal customers.

The sale of electricity is no exception. Researchers have demonstrated time and time again the seasonal variations in the demand and sale of electricity.[4,5,6] The main thrust of this seasonal demand research focuses on climate, appliance stock, and the prices of alternative fuels. These macro seasonal demand models demonstrate how temperature, appliance penetration levels and alternative fuel prices affect the demand for electricity.


Another important factor in the seasonal demand for electricity, which is often overlooked, is the residential seasonal customer. A residential seasonal customer is, for the purpose of this paper, defined as someone who has a home which is occupied for less than six months each year. Examples of seasonal homes are cabins, lake homes, winter homes, and summer homes.

In some regions of the U.S. the seasonal member makes up a large percentage of the electrical load for our systems. The number of "individuals staying in housing units occupied entirely by persons with a usual home elsewhere, as of April of 1980, was 500,000."[7]

However, the profile of the seasonal member does not remain homogeneous among regions. The seasonal member in many of the southern states is made up of "snowbirds"--individuals who travel to the south to avoid the winter cold. In the lake regions and coastal areas the seasonal members are those who have lake homes and beach houses; in the mountain regions, they are people who own cabins. Across the country seasonal members make up a very diverse group and occupy many different types of residences.


To obtain the profile of the seasonal member for a specific region, Polk-Burnett Electric Cooperative in Centuria, Wisconsin commissioned AHP Systems Market and Opinion Research to conduct a research study. The seasonal member is of primary importance to Polk-Burnett because of the large number of lake homes located in their service territory. Seasonal homes account for nearly 50% of Polk-Burnett's total customer base.

The Polk-Burnett study was designed to gather demographic information on seasonal members, collect end-use data, and determine whether the seasonal members had any unique needs that could be met by the cooperative. The study was completed in the spring of 1990 and had a sample size of 300.


Demographic characteristics provided some of the most interesting results of the study. The seasonal member was found to be very affluent; over 40% of them had household incomes in excess of $50,000 per year and 35% were college graduates (Figure 1). They also tended to be a little older, with 36% falling between the ages of 51 and 64 (Figure 1). Thus the typical Polk-Burnett Electric Cooperative seasonal consumer was well educated, affluent, and in the later stages of his or her career.


Because the sample used for this study was supplied by the electric cooperative, electricity was an available energy source in all of the seasonal homes. Following electricity, other available energy sources were propane, wood, fuel oil/kerosene and natural gas. A graphic listing of these available energy sources, along with a comparison of their availability in nonseasonal homes, can be found in Figure 2. (The statistics on the non-seasonal consumers are from a residential consumer study conducted for Polk Burnett Electric Cooperative during the fall of 1988). The data presented in Figure 2 reveal that seasonal consumers are more likely to have propane as an available energy source than are the non-seasonal consumers.


The research results concluded that the primary home heating market was dominated by propane and electricity. The use of propane by seasonal consumers was found to be 16% higher than propane use by nonseasonal members (Figure 3). The level of electricity use for home heating was also was 8% higher than that of the non-seasonal members.

As a result of the higher market share levels for propane and electricity, the other energy sources of wood, fuel oil/kerosene and natural gas all had smaller shares of the seasonal primary home heating market (Figure 3).


Even with propane's dominance in the seasonal primary home heating market, electricity was the primary energy source used in the seasonal water heating market. It is important to note that thirteen percent (13%) of the seasonal households did not have a water heater (Figure 4). However, of the seasonal homes that did have a water heater, seventy-one percent (71%) were electric, twenty-five percent (25%) were propane and four percent (4%) were natural gas (Figure 4). A comparison of the energy sources used in the seasonal and non-seasonal water heating market reveled no significant differences (Figure 5).


Another important objective of the study was to determine the level of interest in new products and services. It was believed that seasonal members may have needs that could be met by the electric cooperative.

Seasonal consumers were each read a list of several products and services. After each they were asked to indicate if the service was something currently available at their seasonal home, and if not would they be interested in having this service provided. The results presented in Figure 6, indicate that there are several products and services of interest to seasonal members.


The research results indicate several issues which should be of interest to managers. Demographic characteristics of the seasonal member reveal a very affluent group with tremendous buying power, which presents an excellent opportunity for the sale of new products and services. The research results indicate several services and products are of potential interest, such as rural garbage collection. The possibility of establishing new products and services could prove lucrative and should be examined in detail.

The seasonal home heating market indicates a relative strength for electricity compared to its penetration levels found in the non-seasonal home heating market. Propane also demonstrated relative strength in the seasonal home heating market. Marketing programs for home heat in the seasonal market must focus on propane. Ideas of safety and assured service can be very effective when targeting seasonal homes with propane.

Energy sources in the water heating market show little variation between the seasonal and non-seasonal homes. The major difference in this market is 13% of seasonal consumers do not have water heaters. A marketing program stressing the safety of electricity, assured service and the convenience of owning a water heater may be effective in maintaining and increasing load in this market.

From a marketing standpoint, the seasonal consumer shows tremendous potential. This article was designed to point out some of the interesting nuances of the seasonal member market and to show the special needs seasonal consumers may want addressed. Hopefully these results will spark an interest in other managers to analyze the inherent marketing possibilities of their seasonal members.


[1]Shay, T. (1990). "Making the Most of Spring." Hardware Age (March): 12. [2]Wellan, D.M. and Ehrenberg, A.S.C. (1990). "A Case of Seasonal Segmentation." Marketing Research (June): 11-13. [3]Boyle, M. (1988). "BLS to Publish Quarterly Data From Consumer Expenditure Survey." Monthly Labor Review (July): 27-32. [4]Garbacz, C. (1984). "A National Micro-Data Based Model of Residential Electricity Demand." Southern Economic Journal (July): 235-49. [5]__(1986). "Seasonal and Regional Residential Electricity Demand." The Energy Journal (Vol 7, No. 2): 121-34. [6]Houthakker, H.S. (1980). "Residential Electricity Revisited." The Energy Journal (January): 29-41. [7]Friedman, S.K. (1988). "Forecasting a Seasonal Population." Business Economics (July): 48-52.

Al Klose is a research consultant at AHP Systems Market and Opinion Research. Allen has a master's degree in economics from the University of California, Santa Barbara, and a bachelor's degree in economics and philosophy from Augustana College in South Dakota. He has conducted research for several rural electric clients.
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Title Annotation:casual workers
Author:Klose, Al
Publication:Management Quarterly
Date:Sep 22, 1991
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