Rachio: Marketing a Disruptive Sprinkler Technology

Rachio, a small Denver-based company, developed and sold a disruptive technology that digitized home sprinkler systems. Rachio’s “Smart Sprinkler Controller” enabled homeowners to reduce water usage by up to 50 percent by using detailed weather reports to auto-adjust watering. Homeowners could also easily control their irrigation systems from their smartphones through the Rachio app. Rachio had seen strong early adoption, but in 2018 the percentage of homes with smart sprinkler controllers was still quite small. Although the Internet of Things (IoT) market was growing rapidly, the market was still relatively new and expensive. Rachio was similar to many other IoT companies in that the majority of the value of the product was in the software—but the revenue came from one-time sales of a piece of hardware, which Rachio sold as a premium product. Rachio’s large incumbent competitors were a step behind Rachio in smart controllers, but they were starting to copy Rachio’s product, feature for feature. To stay ahead of the competition and continue to grow, Rachio needed to convert more homeowners into the B2C channel or move to extend its early B2C wins into B2B markets. In B2B markets, professional landscapers chose the controller type and brand for homeowners.