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EcoFactor is betting that, to save on their energy bills, consumers in Oncor’s Dallas-Fort Worth service area will gladly take the company up on its offer of a $9 a month subscription that also includes six months are free (for a limited time) and a one-time $20 smart thermostat installation fee. But will the consumers actually bite? It’s perhaps too early to tell, but EcoFactor’s consumer-friendly approach to monetizing its tech looks very promising.
It’s imperative that smart grid firms start wooing consumers, even this early stage. Competition in smart grid subscriptions is looming. For instance, telecom giant Verizon has signaled that it views home energy management as a revenue-generating opportunity that it can build atop its wireless and FiOS services. Comcast, obviously looking to offer subscribers more than just cable, voice and Internet service, is a backer of Palo Alto, Calif.-based energy management software maker iControl. To win over consumers — perhaps one day wrest them from these two heavy-hitters — smaller firms will have to appeal to them first. Here are three tips from the home energy management firm’s playbook, for startups that are eyeing direct-to-consumer subscriptions.
The Honeymoon Period
How do you get consumers to pay up for energy savings? Following EcoFactor’s foot-in-the-door tactic is a good start. An affordable entry fee ($20) plus a free, six-month “honeymoon” period presents consumers with a low-risk opportunity to achieve energy savings and test the technology’s mettle. It also demonstrates that EcoFactor is confident it can help homeowners squeeze energy savings of 20 to 30 percent out of their HVAC systems.
What Am I Paying You For?
Why do we pay for services? So that we don’t have to do the work ourselves, generally. This is just as true of home energy management. If consumers wind up parting with their money and slavishly turning knobs and pressing buttons, they’ll quickly start second-guessing their investment. Automation, therefore, is key to taking the sting out of paying a monthly fee, particularly in light of free alternatives like Microsoft Hohm and Google PowerMeter. Don’t overwhelm consumers with options (or bury them in an advanced tab or menu for techies) and provide them with set-it-and-forget-it convenience, just like EcoFactor’s automated, real-time system of subtle energy adjustments offers.
Don’t Keep the Savings a Mystery
EcoFactor is expecting consumers to pay over $100 a year on the premise that it can save the average home nearly four times that amount. You’ll forgive me if I don’t take EcoFactor’s word for it. I’m also willing to bet that many consumers feel the same way. Luckily, EcoFactor’s customers can see the results for themselves by logging into a web-based portal and viewing their HVAC energy consumption data and the savings they achieve as a result of EcoFactor’s intervention. Remind consumers — or more to the point, prove to them — why your product is a good investment by providing easy access to energy data and how it translates into financial savings. If you’re the cause of lower utility bills, stake that claim.
Certainly, EcoFactor owes a lot to its real-time energy management technology, which supercharges demand-response by incorporating weather, geography and other environmental factors. However, the company also appears to have a firm grasp on what makes consumers tick. It’s a focus on the latter that’s desperately needed to help generate acceptance — dare I say, anticipation — of smart grid services and solutions among the general population. If your company is considering a direct-to-consumer subscription plan, EcoFactor is a good example to emulate.