Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
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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