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How are Energy Management Firms to Cope With the High Cost of SME Customer Acquisitions?

The energy management software landscape has exploded with a multitude of firms, both large and small, all vying for a piece of the market. These firms have paid a lot of attention to servicing large industrial manufacturers and large commercial retail firms. In some regions, such as the UK and the US, the market for these sectors is quite crowded and hence competitive. Now, firms have started to focus their attention on the less served SME market – a potentially lucrative market segment that comprises approximately 95% of US building stock. Overcoming the high cost of customer acquisition in the small and medium enterprise (SME) market will be a tough challenge for firms to tackle.

Verdantix research on this segment show that the main strategies being used include:

  1. Cross-selling with complementary software firms already serving the SME market. Energy management software firm GridPoint has announced a partnership with business support services firm Quatrro. This partnership will target the SME market with Quatrro referring GridPoint’s solution to its existing customers in industries such as the restaurant, healthcare and hospitality sectors. Eventually, GridPoint will offer Quatrro services, such as finance & accounting to its customers – helping to increase the service footprint of both firms.
  2. Targeting solutions primarily to energy services firms. US-based EnergyPrint has developed a partnership network of services firms who rely on its software to provide a technology enabled energy management solution that is scalable. Firms within EnergyPrint’s network of partners have existing customer service relationships and are looking to add a layer of software analytics to their current solutions. These service providers include firms in industries such as building systems controls firms, electric service providers, energy consultants, HVAC service providers and plumbing service providers.
  3. Creating a modular software platform. Spain-based DEXMA Energy Management has developed its DEXcell Energy Manager platform to allow customers to tailor the level of functionality used to their needs and cost base. Software modules – such as the forthcoming Demand Forecast Assessment and Procurement modules - are developed in collaboration with third parties like smart grid software and services company Evernalis to provide additional functionality beyond DEXMA’s core offering. These modules are developed as a way for customers with limited resources to incrementally increase the level of functionality received as resources and need increase.
  4. Paring down technology solutions to minimise upfront cost. IMServ (now part of Schneider Electric) created its Control 10 solution based on a wireless building management system (BMS). The solution, a micro-BMS, is designed to meet the cost constraints and payback requirements of retail SMEs, such as Carphone Warehouse in the UK, through basic control functionalities combined with remote bureau services for energy use auditing, monitoring and management.

The jury is still out on which of these strategies, or the many other strategies being pursued in the market, will be successful in opening the door to more SME customers. To learn more, attend the Verdantix webinar The Future Of The UK Energy Services Market on Thursday, September 17, 2015.