Berkshire Hathaway-owned Clayton Homes sells and delivers one out of every 20 new homes Americans buy each year, in large part due to the affordable average selling prices of the houses coming off its massive manufacturing assembly-line infrastructure.
Now, one of Warren Buffett's favorite Berkshire operating units is taking a big step beyond the "initial costs" bright line that carves an almost exclusive price-point niche for its range of prefabricated houses.
A new, strategic partnership with smart home tech player ecobee allows Clayton to pivot off an already powerful position on lower house selling prices--literally--into more rarefied air for its customers: improved room air comfort, with monthly operating cost savings.
The venture, which provides for the installation of an ecobee3 lite smart thermostat in all of its new Clayton Built Homes, moves the strategic dial from focus on first costs to buy, to a total-cost to own value emphasis that, Clayton execs believe, can impact customer loyalty, referrals, and satisfaction, metrics Clayton regards as critical to its sustaining profitability, market position, and growth opportunity.
"Ecobee shares Clayton's focus on making homes affordable to all, and improving our customers' lives in their homes," says Keith Holdbrooks, Clayton Home Building Group president. "Among the ways we're aligned culturally, ecobee has adopted NPS (Net Promoter Score) measures in its customer focus, something we've been doing at Clayton for more than a decade. So, together, we have specific data we can share on our customers' sense of value for what we're doing on energy cost savings and comfort."
According to a press statement Monday, the venture's operational aspects become effective today:
Clayton home building facilities are rolling out the ENERGY STAR® certified ecobee3 lite in all Clayton Built® homes ordered nationwide. The ecobee4 will also be available as an upgrade in select Clayton Built® homes across the U.S.
“ecobee was founded on the belief that people everywhere deserve access to innovative technology that has the power to transform everyday life.” said ecobee Founder and CEO Stuart Lombard. “We are excited to partner with Clayton and offer even more families a better way to save energy and money without sacrificing comfort or convenience.”
ecobee’s smarter algorithms and advanced sensing technology empowers homeowners to live comfortably and save money on their energy bills. ecobee has estimated that to date it has helped homeowners save enough energy to take the City of Miami off the grid for a year. “As it becomes harder for the average American family to achieve homeownership, we continue to offer energy efficient features that were once considered a luxury to affordable housing,” said Kevin Clayton, CEO of Clayton. “Aligning with a leader like ecobee in the smart home space allows us to continue fulfilling our company purpose of opening doors to a better life.”
In earlier coverage, BUILDER reported:
Ecobee, a manufacturer of WiFi-enabled smart thermostats for residential and commercial applications, introduced the ecobee3, which takes homes sensing capability a step further with the inclusion of remote sensors to monitor conditions in multiple rooms.
By networking remote sensors, the thermostat can recognize hot and cold spots in the house to deliver optimum comfort to every room. In addition, the sensors help more accurately determine which rooms are occupied, so that the temperature can be adjusted accordingly for energy savings. Up to 32 sensors can be attached to one thermostat.
The venture is significant both in its magnitude and its meaning as an inflection point with respect to where consumer expectations are around smart home technology. ecobee's Lombard, in response to BUILDER queries, responds, "ecobee works with a wide range of leading North American builders to offer new home buyers access to smart home technology on day one of moving in. Clayton is the only home builder in the prefabricated home space that has an exclusive partnership with ecobee."
Whereas many of the initial devices, features, and functionality around Internet of Things smart home engineering have been priced in the province of "nice-to-have" ranges--including solutions that help homeowners safe money on energy use, the Clayton-ecobee deal signals that customers of lower-priced, more widely attainable homes, can avail of those same technologies to improve both operational costs and comfort.
This morning's press statement on the alliance notes:
Likeminded leaders in their respective industries, Clayton and ecobee believe everyone has the right to access affordable, energy efficient homeownership that promotes long-lasting energy savings. With ecobee, Clayton will now deliver even more energy efficient homes that will become a standard for the future.
“Improved energy efficiency results in meaningful cost savings, putting money back into the pockets of families across America.” said Derrick Boyce ecobee’s Vice President, Sales. “We’re always excited to find new partners like Clayton who share our commitment to innovation, affordability and world-class technology.”
Here's some Parks and Associates data on the addressable market for smart home technology in the U.S.
- More than one quarter (26%) of U.S. broadband households own at least one smart home device and 16% have two or more devices.
- More than one fifth (22%) of U.S. broadband households bought a smart home device over the past year.
- Only 13% of U.S. broadband households own a smart thermostat.
- Yet 63% of new thermostat purchases are smart thermostats.
- In the 2017 holiday season, 46% of millennials reported high intentions to buy at least one smart home device device and 36% planning to give one as a gift.
People are getting more comfortable with the notion of smart devices. They're realizing that just as the smart phone revolutionized communication, smart technology can transform the home. Customers are actively seeking smart home technology, and according to Parks and Associates “Smart Thermostats Are the Gateway to Buying More Smart Home Devices”.
Many home building organizations look at America's affordability crisis as a government national and local policy issue separate from their core reason for being. Clayton, on the other hand, looks at affordability, and what it's doing about it, as part of its essential nature. Which is why it's focusing more and more beyond first-cost price tags to the household's total cost of operating a home. That's different.
