Utility Week

UTILITY WEEK | 19TH - 25TH OCTOBER 2018 | 27 DATA n abundance of data is upon us – whether from smart meters, smart thermostats or electric vehicles – but how well- equipped are companies to deal with the explosion coming their way? We are experiencing a "new era" for data, says Thunderhead's Whyte. "Previously, businesses were parched; they did anything they could to get hold of data – and in the absence of information beyond recency, frequency and value, predictive modelling was generally based around these metrics. Today, thanks to these devices and our ability to connect virtually all flavours of information, we find ourselves inundated with – so often frozen by – an abundance of intelligence." Citizens Advice's MacGregor suggests that, when it comes to preparedness for the data revolution, the energy sector is a "very mixed situation", ranging from those "burying their heads in the sand" to having "well-thought-out long-term strategies" to capitalise on these new opportunities. Vickers agrees, saying: "Different companies are at different stages when it comes to harnessing the power of big data, and there are some good examples of innovation out in the market. Having attended a number of AI and data conferences recently, the thing that struck me is that all of the experts are talking about putting the focus on the customer, rather than the data itself. For me, this is spot on. Data doesn't drive innovation – it's what you do with it that counts." Experts agree data shouldn't be seen as an end in itself. Instead of seeing data as a "holistic golden ticket", businesses must understand that there is more impact from "doing fewer things well", suggests Whyte. Octopus's Jackson suggests some companies are not prepared for the data revolution. He tells of a time when a big six chief operating officer said to him: "We think of a quarterly meter reading as big data. What chance do we have with half hourly?" Many companies will be using connectors to link legacy platforms with this amount of smart data – but Jackson suggests that, until they ditch the legacy platforms and make the smart data their core data, they'll be "hamstrung in delivering better value and services for themselves and their customers". Ovo's head of data and analytics, Katie Russell, meanwhile, acknowledges that the influx of data is a challenge, and one in which Ovo has "invested heavily". And the benefits, she claims, are abundant. "First off comes security, consent and retention policies, these are absolutely key – our customers' trust is critical. "Another important consideration is ethical. What do we intend to do with this data? Are we planning on using this data for the benefit of the customer?" BUSINESS DRIVERS aving a full and thorough understanding of the customer journey holds many benefits for energy companies. Industry leaders agree it is vital for every company to understand their customer journey. First Utility's Eadle goes as far as to say it is the most important thing they can do. Citizens Advice's MacGregor insists energy companies need to understand the entire life cycle of a customer – from someone thinking about joining them, their experience being an actual customer and during the final close down of their account if they switch to another company. Vickers agrees, emphasising that a thorough understanding of the customer journey is "absolutely critical", as the energy market becomes increasingly competitive. "The customer journey has to be the key battleground for energy suppliers in the coming years – otherwise all you're left with is price, which isn't ideal in an industry where margins are tight." Reaping the rewards If a company gets the customer journey right, the benefits are plentiful – the primary ones being customer retention, customer engagement and lifetime value. It's crucial; Customer losses have plagued the big six in recent years. In February, Centrica announced the loss of 1.4 million energy supply accounts, corresponding to 750,000 customers. Scottish Power, also in February, reported that its retail arm saw earnings halved during 2017 – partly due to the loss of around 200,000 customers. Npower, too, has suffered. It announced in May that it had shed around 114,000 household accounts during the first three months of 2018, due to "intense" competition in the retail market and fixed price tariffs coming to an end. Thunderhead's Whyte says improved customer journeys often bring with them conversations on the need for investments in technology. "While not necessarily true, Data doesn't drive innovations – it's what you do with it that counts INSIGHT Cross-channel Actionable Realtime Business-related The customer journey impacts well beyond marketing MARKETING Retention Acquisition Win-back Ad efficiency Context Consistency Insight-driven SALES EPOS Dealer Telesales Joining sales channels Lead quality SERVICE Call centre Social CRM OPS Supply chain Call deflection

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