As with the two information technology waves that came before, the internet-of-things (IoT) will transform the commercial landscape. In this manner, IoT represents a threat to any business wishing to remain independent of major tech players such as Google and Amazon. Already, these tech giants have aggressively moved low-price smart speakers into our homes. Further, they are setting up new platforms to position themselves as providers of home services. Consequently, business-as-usual yields poor options for those who prefer independence. This post provides home-service business owners with options to improve their marketing efforts and to meet the emerging IoT challenge.
IoT: The Next Tech Wave
We can all appreciate the role technology has played in transforming our economy over the last few decades. We may barely remember such commercial fixtures as the Yellow Pages, travel agent offices, or large “anchor” malls. Still, we are aware that tech giants such as Google, Amazon, and Apple have radically changed the way we research, source, and purchase goods today. In fact, due to devices such as smart speakers, it has become increasingly hard to avoid using these tech giants to procure goods and services. Even if we try!
Tech’s First Wave: The Internet
Though hard to imagine from today’s vantage, it hasn’t always been easy to “get online.” And once upon a time, cell phones were simply wireless telephones rather than mini supercomputers. Initial internet connection from a desktop required clunky “dialing in” via modem over a devoted line. And once connected, early adopters of the first popular browser, NCSA Mosaic in 1992, could only choose from handfuls of sites.
Most of these sites were run by various government agencies and remained technical in feel. However, new sites emerged at an initial rate of about one per day until reaching five figures in 1995 and millions by 1998. Sites became more attractive visually and loaded more rapidly. Even then, the internet remained nascent and few businesses really understood how to use the new venue. As a result, many companies flared and failed in this explosion of dot-coms. For example, see: Super Bowl XXXIV and the Pets.com sock puppet!
Nevertheless, despite some early struggles, we all know the outcome. Truly, it has become all but impossible to conduct business without a strong website and complementary digital services. Simply put, these are now considered table stakes. In the words of one author, “nowadays, if you can’t find a business online, or if it has an outdated, ugly Web site, it looks downright unprofessional.” And increasingly, digital-savvy companies are better positioned to benefit from further innovations.
The Second Wave: Mobile, Social, and Apps
By the 2000s, consumers had largely abandoned modem dial-up and become comfortable with terms such as “internet service provider.” Further, no business executive left home without a Palm Pilot or a Blackberry and its mobile a data plan. Initially, we accessed data exclusively through browsers built into our phones. However, over time we learned to improve efficiency by downloading apps.
We now have far more direct access to companies, their products, and their services. In fact, we expect to research and even to purchase goods and services at any time and from any location. To the point, some argue that “it’s less important for a shopper to be present in-store than for the store to be present wherever and whenever a shopper needs it.” Further, we are evermore apt to consider the opinion of “influencers” on social media when choosing goods or services for purchase.
Of course, information transfer is a two-way street. And companies increasingly use the lure of apps and social media to gather large amounts of consumer data. We now find ourselves at the crest of this wave as social media has evolved into a marketplace of its own. And unsurprisingly the tech giants have worked hard to integrate into this space.
Today’s Third Wave: The Internet of Everything
Many believe we are now at the forefront of the latest and greatest wave of the information revolution. With nearly 80% of Americans now well socialized on smartphones, we are poised for additional connection. Not only will we connect people, but we will also link other formerly “dumb” hardware and appliances. Such devices include televisions, video cameras, door locks, cars, refrigerators, watches, thermostats, and speakers. And of course, we have already started along this road.
Of note, this explosion in connection is not just about devices. Rather, it speaks to new affordability and convenience for underlying sensors and electronics. As a result, these components can be added to nearly any piece of machinery. And with so many new sources, data management and analysis represent new sectors of their own. Therefore, we now commonly speak of the era of “big data” and the importance of cloud storage and artificial intelligence (AI). All of which play well with the business of the tech giants, who are making bigger and bigger moves in the space!
Major Plays in IoT
Even at this early stage of the third wave, IoT has moved largely beyond the realm of small entrepreneurs and plucky start-ups. In brief, the tech giants have identified the opportunity and are moving rapidly to exploit it.
More specifically, Google purchased Nest Labs in 2014 for $3.2B and has now re-absorbed the company under Alphabet. At the time of purchase, Google likely paid over 10x on top-line revenue for the company. And even today Nest operates at a substantial annual loss of $621M on $726M in revenue. Of further note, Nest not only produces their iconic smart thermostat, but has moved into smoke detectors, doorbells, cameras, and security systems.
For its part, Amazon has made several moves into IoT. By way of example, it purchased Ring in early 2018 for an estimated $1.2 to $1.8B. Ring has moved assertively into security and lighting, matching in some ways the offerings of Nest. However, to round out further its competition with Google, Amazon also participated in two funding rounds ($35M in 2016 and $61M in 2018) for smart thermostat maker, ecobee. Ring profitability on its 2017 revenue of approximately $415M remains open to debate. But one could easily assume something similar to Nest. Particularly since Amazon quickly dropped the price of Ring’s entry device by about half, to $50.
Tactics for Market Penetration
Amazon’s apparent willingness to sell devices into the market at low, no, or even negative margin represents a common theme. Google also operates in this manner for devices aimed at consumers. To illustrate, smart speakers perhaps provide the best example of this business tactic. As competitors, both companies have recently embarked upon selling these two-way devices at less than $30. Almost without doubt, this amount equals or surpasses all-in manufacturing costs.
Conceptually, both companies see massive value not in the sale of devices, but rather in the direct channel to customer data. And the strategy appears to work. As of 2018, nearly 120 million speakers have been sold into 52% of US homes. Since these devices appeared on the market only within the last several years, the adoption rate is impressive. In fact, the following figure shows smart speaker deployment at rates faster than for any other tech device. Note that this figure includes the cell phones that all of us now carry in our pockets!
The following graphic speaks to the major players in this smart speaker roll-out.
Currently, Amazon’s Alexa remains the dominant player. That said, Google has moved quickly and looks to catch up with Amazon in the near future. Of interest, another recognized tech giant, Apple, appears to lag behind – though likely should not be ignored.
Threats to Businesses and Their Owners
Actually, from the perspective of existing businesses, none of these giant tech players should be ignored. Briefly, these companies have created processes to alter radically the landscape for delivery of goods and services. In particular, they have changed the manner in which transactions are executed, or “intermediated,” along the value chain.
This trend should unnerve today’s small business owner. More and more, by offering innovation and convenience, the tech giants seek to place themselves directly in front of consumers. And in so doing, they displace current providers. More important, they alter the relationship with existing customers.
Michael Smethurst (who works for the UK’s Parliamentary Digital Service and writes for the BBC’s Technology and Creativity Blog) offers two strong thoughts in this regard. First, he judges the current landscape. “Right now the bits of the web that aren’t Amazon or Google or Apple or Facebook feel like the high street greengrocer waiting for the supermarket to ride into town.” Then he points out the consequences. “All the while you’re being cut out of the deal. Signing up to any of these new intermediators isn’t about opening up new distribution channels; it’s about outsourcing your customer relationship.”
And recall: Google and Amazon have signaled their intent to intermediate into what has historically been a bastion of independent business opportunity: home services. Liberty-minded service providers, whether technicians or realtors, should take note!
Options for Responding to the Threat
With the threat clearly identified, how is today’s business owner to respond? How can one improve business marketing in an era of IoT growth? Effectively, three options present themselves.
Option 1: Stand Pat
In essence, this is the “business as usual” approach. This path may be perfect for a small shop with an owner looking to retire. However, this strategy clearly should not be considered by companies seeking to retain or build value into the future. Unless one disagrees with the logic presented in this post, that is!
Option 2: Yield Independence
Those choosing this response accept the prospect of working for the tech giants. These business owners believe that cyber companies indeed will develop direct channels to consumers. Or they believe themselves poorly positioned to improve their business marketing using IoT. Consequently, they accept the eventual prospect of serving as contractors much like today’s cable technicians. Work will be doled out, but others will be in control of the customer relationships.
Option 3: Leverage IoT to Grow Business
By far, the proactive approach lies in building upon what is already there! As a business owner, you already hold the pole position sought by the tech giants. These are your customers calling you — and referring their friends for work well done. These business relationships are yours and should remain yours.
The problem you confront then is how to retain and build upon these relationships in the face of efforts by the tech giants. As we have seen, these companies are working hard to get between you and your customer. They are investing heavily to ensure their control of repairs, maintenance, and upgrades – their control of services and products. And they see IoT as the key for so doing.
Fortunately, another independent business has developed solution to keep you in front of your customer. Colorado-based Emporia Energy provides a means to improve your business marketing using IoT!
How Emporia Energy Helps Independents Thrive
What Emporia Does
Emporia Energy is an IoT company whose platform helps homeowners to use energy wisely. The platform urges customers to achieve savings of up to 50% on energy. These savings may derive from a combination of timely notices and recommended actions. At the household, Emporia relies upon hardware to provide direct measurement of energy consumption. The hardware relays this data to cloud services for processing prior to sending to mobile devices via the Emporia app. Customers can access their data in real time from any connected mobile device.
Improve Marketing for Your Small Business Using IoT
Business owners benefit from partnering with Emporia by taking the following three steps.
Step 1: Providing and Installing the Emporia Vue
Partners obtain the Vue directly from Emporia. Emporia offers a number of approaches to assist with sample product and volume discounts on either of its Vue solutions.
Installing either device is simple. Nonetheless, many homeowners appreciate assistance in the process. And it is a great way to provide an easy service that helps strengthen connection to your customer!
Step 2: Connecting Regularly with Customers through the Co-branded App
Emporia pairs each customer device to a special app version graced with your logo. Every time your customer opens the app to gauge savings or respond to an alert, she or he receives an impression of your brand. However, beyond these impromptu events you have the option to send your own notifications to customers. Maybe you simply check in seasonally. Or perhaps you are running a promotion or have special product availability. Regardless, you have a channel to your customers. Whether you run an HVAC company or other trade service provider. Whether you are a realtor or other professional. The Emporia app provides a low-cost means for staying present.
Step 3: Acting on Timely and Valuable Notices from Emporia
The hardware you provide delivers a valuable further connection to your customer. Specifically, while receiving energy data over its platform, Emporia’s cloud constantly scans for signs of trouble. Is the heat off when it should be on? Is an appliance behaving erratically? Emporia’s system detects the energy patterns that point to distress and notifies your customer. It further offers to connect them immediately to you, their preferred provider. At their discretion, these customers can also choose automatic notification to get on your schedule.
Your customer receives the security of knowing their assets are protected. In turn, you receive a surefire lead – and can look like a hero for your timeliness and great work. You both win and your customer connection grows that much stronger! This is how you improve business marketing with the power of IoT.
Prepare to Enhance Your Business with IoT!
We at Emporia seek partners for this important tech and energy transition. We strive to improve consumer value for energy spending. Further, we pledge also to help business owners retain their rightful place with these these same consumers, the customers for home services! In three easy steps, you can learn more about joining Emporia’s network of businesses using IoT marketing to improve their business growth.
Step 1: Try Emporia’s Software
Download Emporia’s app on either the App Store or Google Play. Any user can sample a demo version of this app and provide feedback. But the app becomes so much more powerful when installed with Vue hardware! So be sure to complete the second step below, either before or after downloading the Emporia app.
Step 2: Purchase Emporia Vue Hardware
Installed behind the main breaker box in your home, the Vue works in any market. Though homeowners can often complete this installation in 15-20 minutes, Emporia nonetheless recommends hiring a qualified electrician. This easy installation represents a great opportunity to connect with customers! And as a reward for installation, the Vue offers highly granular data and the ability to monitor individual circuits. In some cases, as for HVAC companies, individual circuit monitoring can be a ticket to highly effective lead generation!
Click here to choose your Vue!
Step 3: Reap the Rewards of Success
Simply put, Emporia seeks to put consumers in control of their energy data. In so doing, Emporia can also put independent home services companies in control of IoT marketing efforts. By viewing data in real time, consumers can save between 3% and 13% through awareness and simple conservation. But this same continuous monitoring provides another benefit. It allows Emporia to protect consumer energy assets and provide the highest quality lead generation to home service providers. Consumers start on a bold goal of saving up to 50% on energy spending over time. Meanwhile, home services companies survive and thrive in an environment where Big Tech seeks to intervene.
By helping protect energy assets, home services companies can secure their rightful place in delivering valuable services directly to customers. You provide consumers with peace of mind and the prospect of energy savings. In turn, you receive enhanced brand recognition, the ability to push notifications, and timely lead generation. Better yet, as a successful and consistent service provider, you strengthen your relationships. And keep your customers “off the market” from competitors!
Think about it:
- Low-cost, direct marketing provided through cutting-edge IoT technology
- Enduring brand recognition and no-cost direct communication with customers
- Proactive scheduling with customers to meet their immediate needs
- Credible enhancement of environmental sustainability efforts
Emporia sees this confluence of interests as the ultimate win-win — and hopes you will as well. Please join us!