Energy Utilities: Staying Competitive in the Smart Home Market

The smart home market is booming, reaching 40% of all US households. By 2025, this number is expected to reach almost 60%. For energy utilities, this sought-after technology is an opportunity to reach customers in new ways, increase engagement and improve JD Power scores.

Unfortunately, in today’s digital age, energy utilities aren’t the only ones competing for customers’ time and attention.

Ogle the competition

The reality is that Amazon, Google and other tech companies aren’t just makers of smart home devices — they’re now direct competitors to energy utilities.

Beyond selling smart home devices, tech companies are using home energy automation as an opportunity to collect customer data, which they use to build digital relationships. In fact, many of your utility customers receive energy-related emails directly from these tech giants.

Google sends a monthly email newsletter to Nest customers with colorful reports on each customer’s energy usage and local energy trends. The e-newsletter includes infographics and videos that provide energy efficiency tips and other engaging content.

For energy utilities, efforts like this can negatively impact their own customer relationships and undermine long-term satisfaction. As relationships with these tech companies grow, customers will begin to look to Amazon or Google as a resource for their energy needs, not their local utility.

The smart home market is expected to reach $29 billion in sales in 2021 and nearly $47 billion by 2025. With financial gain at stake, tech companies have a strong incentive to continue building relationships with their customers. around energy efficiency.

According to a recent survey, 80% of energy utility managers agreed that utilities do not match the level of personalization and convenience that customers receive from Amazon and Google. That’s why it’s up to your energy provider to take back control of the smart home conversation and reestablish their role as the energy expert.

Build relationships with content

To start the smart home conversation, energy utilities need to leverage content marketing to educate and engage customers. Research reveals that 70% of internet users want to learn more about products through content compared to traditional advertisements. Content marketing creates long-term engagement and fosters a digital relationship that brings value to customers.

With the right content, energy utilities can educate customers, help them make decisions, and show them how this technology is an essential part of a smart energy lifestyle.

A smart home strategy could include a personalized email newsletter for customers who have shown interest in this technology or purchased a product from the energy market. Energy utilities should also promote the energy efficiency benefits of smart home technology in their education and outreach efforts.

It’s also essential to create a consistent message across the company to ensure that all customers have a similar experience, whether they receive a promotion on the purchase of a smart thermostat or contact your call center to inquire about smart home resources.

As more energy utilities roll out time-of-use pricing options and demand-response programs, it will be critical to encourage the adoption of smart energy technologies among the public. residential and commercial.

The cost of doing nothing

The risk of losing customer relationships to tech giants could lead to lower program uptake, higher operational costs, and reduced revenue from lost market sales. Another potential threat is big tech selling electricity in the future.

According to a Wall Street Journal article, “In 10 or 20 years, the main retail electricity supplier in the United States will be Amazon or Google.” Currently, technology companies are team up with energy industry partners – a market that could grow by up to 500% in the coming years.

For example, Amazon Web Services has an oil and gas division with BP and Shell as customers, while Microsoft currently has a partnership with ExxonMobil and Chevron. Google has a partnership with Schlumberger for its oil and gas petrotechnical software.

According to the UCRC’s State of the Customer Report, about 25% of consumers would choose a different energy supplier if given the option, and another 50% had no strong opinion in either sense.

That’s why it’s essential to build strong customer relationships around smart home technology before tech companies make new inroads.

A competitive advantage

While it’s not easy to compete with these tech giants, energy utilities have a major competitive advantage: customers trust their energy utility.

According to a study by the Smart Energy Consumer Collaborative (SECC), 42% of consumers said that having their utility involved or endorsed would influence their adoption of smart home technology.

On the other hand, customers are concerned about big tech and data privacy as cybersecurity breaches continue to dominate the headlines.

Ultimately, customers are looking for smart home advice from a trusted source like their energy provider. They need advice and information – and this is the perfect opportunity for energy suppliers to take control of the conversation.