The Perfect Partnership: Nest and SolarCity
Nest recently announced that it is launching a new program called Time of Savings. Essentially, electricity providers are starting to charge different rates depending on demand for energy. So if more people use power at 6pm, you could pay a higher rate for electricity used during that time. Customers that sign up for Nest’s Time of Service program are allowing Nest to make small, real-time changes to their thermostat depending on the price of energy.
So instead of having to keep track of when prices are high and low and remembering to manually adjust your thermostat, Nest does it all for you automatically.
Interestingly, this service has to go through the energy provider to pass the data to Nest — and the first provider? Solar City. Now any Solar City customer has the option to sign up to Nest’s program, and if they do they will get a free Nest thermostat installed by Solar City.
This is a brilliant partnership for a couple reasons:
- Nest gets new customers and new data. Getting promoted to Solar City’s customer list and in some of their future marketing material is a big deal. My guess is that Nest and SolarCity are sharing the costs of the free installed units, and in exchange Nest builds their customer list and gets direct access to electricity rate information for the first time. Not only can they sell those new customer’s on other Nest products, but they can use the electricity rate data for all sorts of analysis and enhancement of their current software.
- SolarCity gets an edge when marketing to people looking to have solar panels installed or upgraded. Nest thermostats help people both save money and help the environment, and people getting solar panels have the exact same motives. Having a free, cutting-edge thermostat package thrown into the deal will help SolarCity convert more interested leads into buyers.
So how can you apply this?
How can you package your product with another company so that both of you can benefit? This is obvious with items that have a recurring revenue component, it is easy to give the base product away if it increases recurring revenue down the road. But in this Nest deal, there is no recurring revenue, so don’t be scared to get creative with what you can do.
Here are a couple of quick examples to get the ideas flowing:
- An office supply company could give away a free Keurig with the signing of a new contract.
- A safety audit company could partner with a company that manufactures safety sensors, so any new customer that gets a safety audit gets new sensors installed for free.
- A children’s book publisher could partner with a crib company to give away 5 free storybooks through an app. This would get new interested users to download the app, and possibly make more purchases on the platform later.