Last week I received the official e-invitation to try the beta version of Microsoft’s new Hohm product. It’s basically an online energy audit — Google has one coming out as well, and several start-ups are popping up with a similar idea. A few years ago the idea of major consumer brands playing in a traditional utility space would have been unheard of. But now energy’s cool. And showing people how to save it could be a huge revenue generator (and a threat to utilities — read on down to the end).
Our Director of Insight was kind enough to take on the task of opening a Microsoft Hotmail account — a requirement in order to complete the Hohm process — and enter all the data required so she could receive tips on how to save energy and get comparisons to average energy consumption for similar homes. Her delicate way of explaining her experience with this process was something akin to a “pain in the butt,” and she felt certain she would not have completed the process (it requires measuring attic insulation, pulling files, completing calculations, etc.) if she weren’t being required to do it as part of her job.
Given that convenience rules for mainstream consumers (it’s their number one choice over comfort and the environment), this doesn’t sound like a promising prospect for Microsoft. Perhaps Google will create something more user-friendly. Or somebody else. To the winner of the simplicity equation goes the spoils. Here’s how: once Microsoft (or whomever else) has your email address and information about the energy consuming products in your home, they now have a rich database from which to market you all kinds of products, which manufacturers will be happy to pay for the right to do. So that Hotmail account will now fill up with very specific offers from window makers and insulation manufacturers who could go so far as to pitch you custom products, quotes, rebates etc. for your situation, based on the data you entered.
Now, this is actually an excellent marketing and sales model, but it should be a big concern for utilities. Three quarters of the population told us in our Utility Pulse study that they expected utilities to offer them this sort of information AND they would feel better for utilities for doing so. If Microsoft and Google figure out how to be the consumer’s trusted partner for energy measurement, efficiency tips, product rebates and general connection to a pipeline of savings and information, that consumer will have no reason to turn to his/her utility for that info. And the feel-good, brand enhancing glow of Energy Efficiency/DSM programs will be lost for utilities.
Utilities could (and should) explore partnering with Microsoft and Google so they can play a role in the process and still get credit (in a customer satisfaction sense) from consumers for doing so. Further, Microsoft and Google should welcome a utility having a seat at the table. We see open rates of as high as 30% on e-mails with rebate and tip information sent from our utility clients to their customers — which is a far cry from the less-than-5% e-marketing industry standard. Utility involvement could help ensure Microsoft and Google get their e-mails opened…which will help them sell their databases for a higher price tag to manufacturers looking to advertise.
Utilities will need to explore more and more alliances like this and look for non-traditional ways to maintain control of their customer relationships and brand equity. Especially now that energy is cool.