No one is quite sure what the next generation of smart homes will look like, but a great many of your customers want one – and energy utilities are uniquely positioned to lead the way, whether by pioneering new technologies or engaging in affinity partnerships.
Demand Growing Across Demographics
Energy is as ubiquitous and necessary to the smart home as broadband and wifi, and the number of those interested in the technology is only matched by the ways it can be utilized. Among Millennials, one in four own a smart home device and four in ten want one. Older Millennials have embraced the idea wholeheartedly, while younger ones are a bit more reserved, because of concerns about privacy issues.
Millennials are willing to put their money where their interest is – 86 percent are willing to pay up to 20 percent more to purchase or rent a home with smart home technology. They aren’t the only generation willing to do so – 65 percent of Baby Boomers and 57 percent of Generation X also would put down more cash for smart homes, and Generation Z, the oldest of whom are in their early twenties and beginning to establish their own homes, are even more likely than Millennials to want smart homes.
As smart home devices have become less expensive and easier to use, renters have become a larger segment of users and now are just as likely as homeowners to have a smart home device. The largest hurdle is encouraging users to see past Alexa and Google to the vast number of products available to them. The smart home landscape is expected to change over the next five years, with the entertainment share slowing, while smart appliances and home automation see a boost in popularity.
Most Wanted: Convenience and Security
Smart Home devices fall into three major categories: practical and functional, such as smart appliances, thermostats and lighting and personal item trackers; lifestyle and entertainment, such as remote speakers and streaming televisions; and safety and security, such as alarm systems, smoke and carbon monoxide detectors and smart safes and locks. Devices focusing on functionality and security align with products some energy utilities are already exploring.
In a poll of Coldwell Banker sales associates, 65 percent of buyers wanted security devices; 57 percent wanted temperature control; 48 percent wanted safety features such as smart locks; 46 percent wanted lighting features; 42 percent wanted entertainment devices; and 23 percent wanted smart appliances.
An Essence Group report found that Millennials are most interested in devices that provide convenience, while Generation X likes security and energy savings. Accordingly, the most popular devices are smart thermostats, lighting and locks and connected cameras.
VynZ Research predicts that smart home technology hasn’t even begun to peak with an estimated compound annual growth rate of 14.2 percent to become an $89.9 billion industry by 2024. Users will demand safety, convenience and security and look for flexibility and innovation. North America will be the largest revenue holder in smart home solutions and products.
Affinity Partners: Testing the Waters
While energy companies have begun to enter the smart home market, it is a shift from the traditional business model. To bridge this, utilities should consider an affinity partnership.
An affinity partnership can take three separate, but similar forms, according to the Wharton School. A window strategy gives access to new technologies and developments while exploring potential programs or products and reducing uncertainty; an options strategy is a “calculated bet,” building a platform that can be scaled up or down, based on need and viability; and positioning strategy is a low-risk partnership that offers advantage based on scale or scope or gives access to a new customer base.
In seeking an affinity partner, consider companies with shared values and offerings that have practical value, not just “buzz.” Affinity partnerships can help both companies find new eyes for their products or services while connecting their own customers with services or products that cater to their needs. The more complimentary your offerings, the more likely you will boost revenues – without a corresponding increase in marketing costs.
These partnerships are most valuable when they pair noncompetitive brands that share the same values and have a client base that transfers well. The skill is in choosing a partner whose offerings align with your needs.
HomeServe USA, a national home warranty company, partners with utilities across the nation to offer water, sewer and electrical service line and interior plumbing and electric warranties to their customers. HomeServe maintains a 400-seat, award-winning call center 24/7/365 and dispatches fully licensed and insured, local contractors after one call. To learn more about an affinity partnership with HomeServe, contact us.
Originally posted on CenterPoint Energy’s website.
Houston – Aug. 24, 2018 – CenterPoint Energy today announced it has added seven new Home Services protection plans to its current natural gas pipe and air conditioning offerings. These optional plans are available to eligible CenterPoint Energy natural gas customers in Texas.
The company has partnered with HomeServe USA Corp. (HomeServe), a provider of emergency home repair programs nationwide, to offer its Texas natural gas customers the option of purchasing protections plans from HomeServe for several household systems, including cooling systems, customer-owned natural gas lines, electric wiring, exterior water and sewer lines, water heaters, heating system and air conditioner tune ups.
“Thousands of natural gas customers in Texas have responded positively to the program by enrolling in the cooling systems and natural gas pipes protection plans,” said Gregg Knight, senior vice president and Chief Customer Officer of CenterPoint Energy. “We’re expanding our services to customers by adding seven new protection plans to the current offerings.”
These optional service plans are designed to help protect homeowners from the inconvenience and unexpected expenses associated with normal wear and tear repairs to these critical household systems. The new seven protection plans include covered repairs due to damage from normal wear and tear, subject to various maximum benefit amounts:
- Exterior Electric Repair for $5.49 per month – Includes weatherhead, insulator, riser, meter base and service entrance conductor repairs.
- Interior Electric for $6.99 per month – Includes inside electric lines damaged, such as amp panels, wiring failures and faulty GFCI (ground fault circuit interrupter) outlets, and more.
- Water Service Line for $5.99 per month – Covers leaking or blocked water service lines from the home’s outer wall to the property boundary.
- Sewer/Septic Line for $9.99 per month – Covers leaking or blocked sewer or septic service lines from the home’s outer wall to the property boundary.
- Water Heater for $9.99 for one or $18.99 for two – Covers repairs or replacement of a tank-based electric, natural gas or propane water heater.
- Heating System for $13.99 per month – Covers one natural gas/propane or electric heating system.
- Cooling System Tune-Up for $8.99 per month – Includes one 18-point tune-up for your cooling system. Up to four plans may be purchased to cover four cooling systems.
“CenterPoint Energy prides itself on being a trusted energy advisor, so we are pleased to work with HomeServe to provide our customers access to these new valuable services,” added Knight. “These new service plans are a natural extension and will provide homeowners with a low-cost, peace-of mind option for unexpected repairs to covered systems.”
The cost of the plans will be added to customers’ monthly natural gas bill. Customers can get more information and enroll via My Account Online or by contacting the CenterPoint Energy Houston call center at 1-800-752-8036.
Existing Protection Plans: Natural Gas Pipe and Air Conditioning
- Natural Gas Pipe Protection for $5.49 per month – Many homeowners are unaware they are responsible for the repair of any damage to the natural gas service lines from the meter to their appliances.
- Air Conditioner Protection for $8.49 per month – Allows homeowners to have a trusted team of local contractors to quickly and expertly restore comfort in case of a cooling system breakdown.
Our partner, HomeServe, offers emergency home repair programs nationwide, has a customer service line open 24/7, and has a 99 percent customer satisfaction rating* from customers surveyed after receiving service. More information about the plans can be found at CenterPointEnergy.com/HomeServices.
*Data based on customer polls conducted between July 1, 2017 and December 31, 2017, 48 hours or more after service was performed.
As utilities seek new ways to more deeply engage customers, they are looking at branded online marketplaces for energy services. With a significant number of millennials now making energy decisions, this strategy is one that will resonate with more and more energy consumers in the coming years. A new Utility Dive article discusses some early results from PG&E’s online marketplace.
A partnership with HomeServe enables utilities to offer their customers valuable repair plans for electric service line, water heaters and other home systems. HomeServe can provide protection to utility customers who aren’t prepared for an emergency repair and increase customer satisfaction at the same time – at no cost to partner utilities.
Learn more about how a partnership can benefit utilities and their customers at www.homeserveutility.com or contact us with questions.
As state after state deregulates electricity, forcing utilities to offer lower prices to be competitive with retail providers, and more efficient homes and a growing interest in green technology flattens load growth, many energy utilities have sought new revenue through value-added services.
Through the virtue of being a recognizable, trusted brand that has relationships with broad swaths of customers, utilities are in a unique position to offer services that will improve customer satisfaction and retention. Studies show customers want choice, so offering services customers can choose to participate in increases their satisfaction, and J.D. Power has found increased customer satisfaction means improved ROE.
Despite a proliferation of electric-hungry devices and smart home technology, emerging technologies make it easier and cheaper than ever for homeowners to incorporate green energy. Solar panel prices have dropped more than 70 percent since 2009 and saw an increase in implementation globally by 50 percent in 2016.
Device-addicted Millennials – they spend 90 hours a month using smartphone apps – also have the greatest interest in smart homes, with 86 percent willing to pay up to 20 percent more in mortgage or rental payments for smart home technology, such as smart thermostats, according to a Wakefield Research study. Millennials, who have passed Baby Boomers as the largest component of the U.S. workforce, also are interested in green energy, with 56 percent indicating a desire to incorporate solar panels, according to an Accenture consumer survey.
Between technological advances and grid modernization, the stage has been set for partnerships between utilities and affinity partners in offering new services to customers. Value-added services can fall under three main categories: energy services, home services and information services. Energy services can include items as simple as surge protection, lighting, weatherproofing or as complex as energy storage and electric vehicle charging.
Energy services goes hand-in-hand with information services such as home energy management systems, energy reports and real-time usage information through analysis of smart meter data. Customers can manage consumption and costs through real-time data. Fifty percent of Millennials will pay more for real-time information and 61 percent want an app that remotely monitors their energy usage and controls home elements.
Home services is a developing market that includes home inspection, landscaping, emergency home repair plans and bundled services, such as home security systems. Utilities can use collected data to anticipate customer needs and move into that space before startups.
Those customers who received an emergency home repair plan through their utility rated their provider higher than those who didn’t have policies – an increase of 40 percent for gas providers and 36 percent for electric providers, according to a HomeServe USA survey. In addition, 59 percent of those who don’t currently have policies would have an improved opinion of their utility provider if they did offer a repair plan, while more than half said it would be appropriate for their utility to offer one and more than 80 percent said a utility should inform customers what repairs won’t be covered by the utility.
Utility companies have a leg up on services in all of these areas through their connections to customers’ homes and the huge amount of data collected regularly. Investing in value-added services can increase operating margins and reduce attrition.
HomeServe USA partners with utility providers to offer home warranties, complementing other energy services offerings and providing reliable and convenient repair services for home electric, gas, water and sewer lines. To find out how HomeServe can expand your home services offerings, contact us.