Simple Energy Flips Switch on E-Commerce Site for Utility Customers
Explaining how you can save money, and maybe the planet, by cutting energy consumption is simple. Getting people to change their behavior is not.
Simple Energy, a software company in Boulder, CO, has made solving that challenge its mission since it was founded in 2011, and now it has what it thinks is a powerful new tool.
Simple Energy today released new e-commerce software that will sell energy-efficient appliances and electronics from brands such as Nest, Samsung, and Philips. But Simple Enegy isn’t going it alone—it will work with retailers like Amazon and Best Buy to fulfill orders, and more importantly is working with utilities such as San Diego Gas and Electric and Xcel Energy, the utility that serves much of Colorado.
The relationship with utilities is key, Simple Energy co-founder and CEO Yoav Lurie said, because despite investing a considerable amount of resources into its e-commerce software, the startup isn’t transitioning to a company that sells smart thermostats, washing machines, and refrigerators. Instead, the new product is a step that expands on Simple Energy’s strategy of selling software to utilities that enables them to run energy savings campaigns and connect them with customers.
“We’ve been focused on how utilities engage their customers, primarily through outbound communication and utility Web portals and the customer experience,” Lurie said. “We still play an intermediary role between the utility and their customers. That hasn’t changed. This is an expansion of that.”
As an intermediary, Simple Energy’s job is to help utilities engage customers in ways that changes their behavior and gets them to use less energy. To do that, Simple Energy creates software that utilities can use to create customer portals that provide energy savings tips and use reward offers, social features, and games to influence customers’ behavior.
The software also helps utilities run micro-targeted marketing campaigns and analyze data about their customers. Since being founded in 2011, Simple Energy, which has about 60 employees, has raised $8 million, including a $6 million Series B round last year. Its investors include the Westly Group, Bullet Time Ventures, and Vision Ridge Partners.
From the outside, that seems very different than e-commerce. But then again, when is a customer more engaged than when they’re shopping for a product—and when might a utility be more useful than when it can provide concrete data that could save its customers money on a major purchase?
Like any e-commerce site, the Simple Energy Marketplace allows shoppers to research and compare products and prices. The difference is Simple Energy envisions the marketplace as a white-label service offered by partner utilities that’s integrated with their billing systems. That integration will allow Simple Energy to offer what could be its key advantages—the ability to offer shoppers accurate estimates of how much energy and money they could save for each item offered in the marketplace, and the ability to apply instant rebates at the point of sale.
Many appliances and electronics already come with stickers telling potential buyers how much the average user could save. But Lurie said that’s a very rough estimate and doesn’t take into account variables such as location, pricing tiers, or consumption patterns.
So what’s in it for utilities? A few things, according to Lurie, and they relate to trends that are shaking up an industry that still relies on a 100-year-old business model.
Government regulations now require many utilities to offer more energy efficiency and demand reduction programs, including rebates, and utility companies need their customers to participate. But customers have been slow to enroll in those programs.
“That’s been really hard for utilities. Every utility is spending millions of dollars, and collectively they’re spending billions of dollars, on rebates for products and services, and much of that money is being left on the table,” Lurie said. Simple Energy cites a report from the Nielsen Company that says less than 7 percent of customers use available rebates, leaving billions on the table.
“The reason customers are not taking advantage of it is because it’s really complicated,” he said. “We’ve streamlined the whole rebate process and made instant rebates for high-price items possible where they’ve never been possible before.”
Lurie said utilities also have economic reasons to be interested. While power companies always will make the bulk of their money with electricity, e-commerce gives them a potential new revenue source, both for selling products and for other services they could profit from.
Finally, there are the customer satisfaction, positive PR, and goodwill utilities could earn by offering environmentally friendly services and products to customers, Lurie said.
There is some evidence consumers are open to the idea of listening to advice from their utilities when it comes to buying appliances. In 2013, Accenture reported that 58 percent of customers wished utilities would make recommendations about energy-saving products.
While Lurie said the move to e-commerce isn’t a pivot for Simple Energy, it likely will be a big part of the company’s future. Simple Energy will continue to focus on its customer-engagement software, but Lurie noted the amount utilities spend on rebate programs is many times more than the millions they spend on engagement.