In DR2’s work in digital communications for energy retailers, we keep a close eye on Facebook, of course. We’ve had success steering Facebook users toward our retail energy clients. But in this post we’re focused on Facebook’s revenue model and its implications for energy retailers.
Facebook makes money from ads. Lots of it, $1.5B in PROFIT in just the last QUARTER. Facebook gets you to look at their ads by giving you other things you want: connecting you and friends, pinging you on what’s trending, providing an outlet to express yourself, etc. Basically, it’s entertainment with a huge dose of personalization. From tracking your behavior in Facebook (likes, dislikes, clicks, etc.), relevant offers can be put in front of you while you’re Facebooking. And the average Facebook user spends a lot of time with them: 40 minutes a day, claims Mark Zuckerberg.
Most retail energy providers don’t get 40 minutes of mindshare a day. According to Accenture, it’s more like 9 minutes a MONTH. DR2’s retail energy clients average several times that number, and rising. This is because we help our clients use the advantages they have that Facebook doesn’t. Here are some comparisons:
– Essentially 100% of Americans consume electricity every day. Only 1 in 3 are on Facebook daily.
– Retail energy providers know how much energy their customers use. Increasingly, they know exactly when it’s being used. At DR2 we can even begin to tell WHAT it’s being used on. Facebook, in contrast, lacks this level of insight. They know you bought the shirt advertised, but they don’t know how many times you wore it or what you wore it with.
– Facebook’s theme is all-encompassing, virtually whatever one finds interesting (your friend’s kids, current events, fashion, etc.). Retail energy is focused on…everybody together now…energy! Greater focus means greater emphasis on solutions. 84% of consumers say the first place they would turn for energy solutions is their energy supplier. They’re ready to buy more.
In conclusion, it’s the similarity between Facebook and retail energy providers that is critical. Both can have an extraordinary level of personalization with their customers. Facebook makes a lot of money by presenting relevant offers to customers based on personal data.
If you’re an energy retailer, are you?