Popularity Propels Partnerships

Since its launch in late 2011, the Nest thermostat, now in its second generation, has risen rapidly in popularity to become the No. 1 best-selling thermostat on Amazon.com (the first generation Nest thermostat holds the No. 2 spot). It is also dominating big-box sales and is currently recognized as Best Buy’s best-selling thermostat and Lowe’s best-selling programmable thermostat.

To help get the thermostat into the hands of even more potential customers, Nest is now partnering with NRG Energy, its subsidiaries Reliant and Green Mountain Energy, National Grid, Austin Energy, and Southern California Edison to provide rebates and energy credits.

The partnership includes instant rebates of $100 or more on the $249 thermostat as well as two new services — Rush Hour Rewards™, which can earn customers $20-$60 toward their energy bills each season by adjusting automatically during peak energy-use times, and Seasonal Savings™, which can save 5-10 percent on energy for heating and cooling by slowly adjusting the inside temperature when the seasons change. Both services add to the savings already generated through Nest’s Auto-Schedule™, Auto-Away™, and Airwave™ features.

But these partnerships are just the beginning, said Maxime Veron, director of product marketing for Nest. “We think we can be revolutionary with the right partners,” he said.

David Crane, CEO of NRG Energy Inc., said his company is pleased to work with Nest in order to save energy and reduce peak demand on the electrical grid.

“We’ve been working with Nest for nearly a year, and we’ve agreed to expand that relationship because of our shared commitment to developing and delivering the next generation of energy solutions that serve the needs and lifestyles of end-use customers,” Crane said. “As an industry, residential load management is one of the biggest opportunities that we have to curb spikes in electricity use, and when we can make it simple and keep customers comfortable with innovative tools like Nest, it’s a win for NRG and our customers.”

Veron said Nest hopes to continue to expand its partnerships with energy companies across the country to help Nest owners reduce their energy consumption, save money, and reduce the likelihood of rolling blackouts and power outages during peak energy-use periods.

Attracting Generation Y

Founded by Apple alums Matt Rogers and Tony Fadell, who designed the iPod, the sleek design of the Nest thermostat appeals to the more technologically inclined young homeowners who are looking for something that is not only functional, but also attractive and trendy.

“We want to be embracing the newest technology leading the way, and we want to be seen as progressive and forward thinking. There’s an association with Nest and that,” said Dean Thomasson, president and CEO of HouseCallCompany.com, Portsmouth, Va. “The client that Nest draws in is the client we want. It’s increasing our ability to be progressive.”

The company claims that the thermostat will help average users save 20 percent or more on their energy bills. In addition, manufacturers and partnering contractors admit that the thermostat has something special going for it — that “it” factor.

“It’s very much a specific group of people who have been drawn to the Nest,” said Amy Turnbull, general manager for Blue Flame Heating & Air Conditioning, Mountlake Terrace, Wash. “It creates that hot buzz for the younger generation.”

Attracting the youngest generation of homeowners and getting them excited about an HVAC product is no small feat, Turnbull said, but Nest seems to be doing just that. Since Blue Flame signed up to be a certified Nest contractor in late 2011, Turnbull said they suddenly have a new breed of tech-savvy clientele coming to them for the first time.

“Most of them are people my age who are talking about a thermostat in their house for the first time,” said the 33-year-old Turnbull. “This is what our industry needs. We need this technology — the cool factor and the Apple name behind it.”

Contractor Benefits

When customers purchase a Nest thermostat, they often use the company’s website to locate a certified Nest installer in their area. For Blue Flame Heating & Cooling, that has translated to 129 new customers, courtesy of Nest, in just a year and a half.

“There are so many opportunities for general contractors to get in front of customers without doing a lot of work,” Turnbull said, adding that the application to become a certified Nest installer took her less than 10 minutes to complete.

“Then, they take you through some pretty rigorous online training,” Thomasson said. “They want to make sure they’re working with a good contractor.”

Turnbull said the effort it takes to become a certified Nest installer is well worth it. “If you think about how much the average HVAC company spends on bringing in new customers, that’s a lot of money that we have not had to invest in marketing — it’s all been handed to us,” she said.

Thomasson, who also signed up in late 2011 to be a certified Nest installer, said the partnership has also benefitted his company by bringing in a new kind of customer that is knowledgeable and excited about the product.

“It is the type of client you’re looking for,” Thomasson said. “You’re already able to engage the client at a higher level than you would a standard client because most of them have gone online and looked at the information themselves and started the interaction with the Nest product, so you’re not selling them on it. You’re confirming what they’ve already discovered.”

In addition to bringing in more work for the contractor, Nest thermostat installations can also lead to long-lasting relationships between the customer and the contractor, Turnbull said. For contractors who find it difficult to make that first connection with the youngest generation of homeowners, Nest provides a valuable service.

“A lot of people my age aren’t thinking about heating and cooling their homes, and the HVAC industry doesn’t have the advantage of showing them how all the products work, so you have to engage them with the thermostat,” Turnbull said. “It’s such a great opportunity to connect with the next generation.”

“Those who are sitting on the sidelines, unwilling to embrace new technology, are the ones who are going to be left behind,” Thomasson said. “Nest is bringing clients to your front door if you put yourself in a position to do that, and you’re getting paid for it. You’re really crazy not to do that.”

Publication date: 6/17/2013 

Want more HVAC industry news and information? Join The NEWS on Facebook, Twitter, and LinkedIn today!