12 Aug Collaborate, Innovate and Differentiate
By Jack Doueck
The theme of the 8th Energy Marketing Conference taking place on September 19th in New York City is “Collaborate, Innovate and Differentiate”. We believe these are the keys to success in retail energy.
Successful energy retailers today are finding ways to collaborate with unrelated businesses, and seemingly competitive businesses. To compete, REPs find ways to work effectively with marketing providers, operational providers, municipalities, energy efficiency providers, and solar companies.
As an example of partnerships with seeming unrelated firms: Crius created unique partnerships with Cincinnati Bell (Cincinnati Bell Energy), Frontier Communications (FTR Energy Services) and Fairpoint Communications (Fairpoint Energy).
Nowadays there is a lot of talk about “convergence”. Many energy professionals think that retail energy will ultimately be taken over by regulated utilities or IPPs, internet companies like Amazon.com, or distributed energy generation (Solar, Wind, Battery storage, CHP) etc.
We don’t know what the future holds, but we do know that unless we learn to work together and collaborate we will not exist in 10 years – at least not in the way we exist today
REPs who view third party marketers and service companies as part of their companies succeed way more than retailers who treat providers on an arm’s length basis. This means making exceptions, being sensitive to the needs of your partners and treating them just as well as you treat your customers.
It is well known, that REPs who work closely with brokers do better. REPs may develop custom bids and custom programs together. REPs who value and take the time to recognize and appreciate their strategic partners are the winners. But, in the end, it is the customer that really wins.
Every year at the March Energy Marketing Conference in Houston Texas, we present the award to the “Most Innovative Marketer” of the previous year.
Nominees for our awards have executed some of the most creative marketing programs we have ever seen.
NRG Residential Solutions won the award for 2013 as the company empowered residential energy customers with a new way to think about, buy and use energy. Innovative, exclusive energy products gave customers unprecedented choice and control through customized electricity plans with unique rewards and access to emerging energy technology solutions. Other examples of innovation included: Leveraging NFL team partnerships to harness the power of fans; “Two Cent Sundays” programs; putting the power in consumers’ hands by letting them design their own plan; and launching the NRG Clean Power Advisor App.
Direct Energy won the award for 2014 because they had more new service offerings, partnerships and products than any other REP in the country. Some examples included: Panoramic Power, “BuildingIQ”, SmartThings, Astrum Solar and Nest. They sold about 40,000 smart thermostats that year and about 190,000 new customers bought both commodity as well as other services.
In 2015, Major Energy won the award, but many if not all of the nominees for the Most Innovative Marketer Award were: developers of green energy solutions and environmentally conscious products; providers of home energy management products; sophisticated users of video and digital media that complemented traditional sales channels; providers of significant and creative customer rewards programs and incentives; and superior users of online renewal engines. The nominees created joint marketing programs and partnerships with other industries, professional sports teams, state food banks, cancer treatment centers and other nonprofits. They positioned themselves as “Trusted Advisors” with their consumers. They developed new technologies to improve customer interactions.
For 2016, Stream Energy won the award. Stream launched a host of new services for customers including: Wireless Services; Protective Services (such as Credit Monitoring, ID Theft Protection, Online Data Backup, Remote Tech Support, Roadside Assistance, Virtual MD); Home Services (such as VOIP, Home security, Home Automation, automated garage door openers, door locks, motion and window sensors, home video recording, and a smart-home app); Equipment Bundles (such as Smart Thermostat, Smart Sprinkler Controller, Smart Door Bell Video Camera); and Service Bundles (such as “Protect & Save” offering where they bundled the long-term fixed energy pricing with ID Theft Protection service at no extra cost to the customer). Also, they did their own live talk-show on TV and had their own radio programs.
These retailers excelled at innovation and thereby built powerful businesses.
At the end of the day, this is a commodity business. You aren’t different because your brand is different. Without new states opening up, REPs are all vying for the same customers. So REPs need to show customers how they are unique.
When you’re driving your car and you need gas, do you say “I need Sonoco gas”? No. Gas is gas. It’s a commodity. Just like electricity. So how do we prevent a race to the bottom and an over-emphasis on price?
An answer can be: Offer products and services along with the commodity that people want and need. Fixed pricing is an important differentiator when compared to the local utility. But to really differentiate from your retail competition – you must go further. You need creative acquisition and retention tools. You must decide to invest in these tools so you can follow the “road less traveled”.
The bottom line is: REPs need the combination of these three ingredients to really win in this business. They must Collaborate, Innovate and Differentiate.
Jack Doueck is co-founder and principal of LED Plus, The Energy Marketing Conference and Advanced Energy Capital.