How Retail Electricity Programs Benefit Multifamily
- Aug 01, 2012
By Jessica Fiur, News Editor
Houston—Bounce Energy, a Houston-based retail electricity provider, is proving to be an asset to multifamily communities in the deregulated Texas market. MHN talks with Robbie Wright, CEO, Bounce Energy, about why the deregulated market is good for multifamily in terms of electricity providers and how his company became the most “liked” electricity company on Facebook.
MHN: What is Bounce Energy?
Wright: Bounce Energy is a retail electricity provider in Texas, currently. The market here for most of the state is deregulated, meaning customers have the freedom to choose who they want to provide their electricity service across an array of different service providers on the market. Our differentiators are that we are focused in the e-commerce and social states, so we do most of our work and most of our acquisitions and account management online. We offer an aggressive rewards program to customers, as well as competitive prices. We are aggressive in this market—we started with about 16,000 customers, and we’re actually going to be expanding to Pennsylvania and New York in Q4 of this year and Q1 of next year.
MHN: Why would it be beneficial for multifamily developers to choose their own energy provider?
Wright: In the multifamily space, frequently you see different groups looking for a continuous service agreement, where they can ensure the power is going to be on in their property when folks are moving out and moving in, enabling the ability to show particular units while they’re vacated. Over the years they’ve been a historically difficult account setup to manage on both ends, because a lot of the work is manual in terms of notifying that an apartment has been vacated, making sure that the units are all under the property’s name, and when there’s a new tenant, making sure the account is under that person’s name. So that way the person has power flowing, and it’s not being charged to the property at the point of move in.
Where we’ve gone with it, and where the market’s really demanded of it, is to add the technology layer on top of the traditional management of the continuous service relationship. It’s automated in terms of knowing when folks are flowing in and flowing out of an apartment, and when they’ve switched to another provider or defaulted out of their provider relationship and the bill has been rolled back into the property’s name, we are able to summarize that in monthly reporting as well as real-time email reporting. We’ve taken the next step in making account management easier on the property manager.
I think it’s acknowledged this point in the multifamily space that one of the significant formerly hidden costs that occur at properties is the vacated utility costs for when people stop paying bills and move out without a notification. The property is on the hook for some of the usage, and if they could exchange some of that on a monthly basis, they would be saving thousands to millions of dollars a year. We feel that we help fill a void in the market and add some additional cost savings on a property-by-property level.
MHN: So you end up saving even when the residents move out.
Wright: That’s correct. I think, just looking at the Texas market as an example, there was a scenario where, for years a person would move out of a property and then they might have their power switched off in their name upon move out of that property. But [property managers are] very vigilant or have some sort of pre-existing automated mechanism to notify us. They’re responsible for power flowing to that unit for up to a month, without really knowing that that person was completely moved out—that they moved out ahead of their lease—and they had the heat going, they had all the lights on, and it turned into a significant expense at the property level. Where the market’s gone, and where the market is capable of going, is the grid operator lets you know when someone has turned off power in their name, if it’s to flow back at a property level to the property itself, so it’s just a matter of keeping up with the technology to enable those properties to get into that unit and adjust the usage at a much faster pace.
MHN: Speaking of technology, I read that Bounce Energy has a tremendous social media following and has the most Facebook “likes” of any electricity company. How did you accomplish this? It wouldn’t seem like people would necessarily run to Facebook to talk about their energy usage.
Wright: Energy is not sexy, is what you’re saying! We’re very aware of that. Our background is not in energy—our background is in e-commerce, technology and social media. We’ve got over a decade plus in that at the core management level, which equates to almost 80 years of collective e-commerce and online marketing experience, and over 40 years of social media experience. We’ve been on the front end of where B2B relationships online are going. We’ve been working on Facebook and Twitter and seeing when it’s been available to the public, and likewise with Pinterest, likewise with LinkedIn. We’ve spent a lot of time focused on those areas, and as a result of it being something that we’ve spent a lot of time and energy on—not necessarily a ton of money, but time and energy—it plays a big part on our strategies and where we’re going as a business. That’s part of it. The other part is, if you think about your house or your apartment, you have to pay your rent or your mortgage. Then what do you have to pay? Most people say their cell phones or their wireless. But really your electricity bill is right up there—especially in Texas, where they have larger homes and larger residential spaces. So the electricity bill matters. If someone can save $1,800 to $3,000 a year, because they went new versus someone they’ve been with for years who’s going to roll them up in a rate double what the market is offering, that creates a discussion online.
People in the need-regulated market, especially in Texas, spend a lot of time talking about what’s going on with their bill. They also use it as a customer-service mechanism, and we get a lot of people who address us from that perspective. Hurricanes and damages from severe weather are really important to folks, so talking about what is going on with the electricity grid is important, and we make it very easy for them. We don’t just do it through Facebook and Twitter; we have a mobile phone app, we have an online account management structure and you can chat with us online. And you can always send us a message or a letter. It’s really any way you can talk to a person, other than face-to-face, which is not really applicable in our business. It’s a natural dovetailing for what’s important to people—to “like” those organizations that are willing to be present in the spaces with them. That’s one of the keys: You need to be present to win, and you can’t be scared of what the repercussions are. We put a human face on the business. That’s one of the things that social media does—it personalizes the business with customers, and customers like that.
MHN: Is there anything you want to add?
Wright: We’ve been very bullish about what we’ve launched in the multi-housing space, and I think our background lends us very well to that. We feel very strongly about where we’re going as a business.