Utility Week

8 | 15TH - 21ST FEBRUARY 2019 | UTILITY WEEK Interview and would call them out simply to reschedule timers. "We were extremely fortunate to have this huge team of trusted engineers going into people's homes showing customers this new product," Miles acknowledges. "It was really through them that we started to drive adop- tion. They've sold hundreds of thousands, they really helped build awareness of Connected Home products and the Hive brand." This chance to connect more with consumers is what drew Miles, who has a master's degree in mathematical modelling, to the energy sector. She has held various consumer roles since joining the company nine years ago from a career in finance. Previously, at General Electric's GE Money division, Santander and HSBC, she'd honed her specialist maths and data skills around targeting and customer segmentation. But a passion for energy shines through when she explains her move in 2010 from credit cards to smart homes – and, importantly, "end-to-end fulfilment" for consumers. "The credit card market is a brilliant place to be. It's very data rich. But I was genuinely interested in the whole energy trilemma. And I firmly believe that it's not until you have the responsibility of going through the front door that you really understand the extremities of customer service, the importance of it, the risks associ- ated with it, and the significant opportunity you have to surprise and delight customers and build trust." Although smaller than the core energy supply busi- ness of retail gas and electricity, the services arm has always been important to the UK operation. It's some- thing Miles says it is "enormously proud of " – with the proportion of British Gas's seven million customers now signed up to take its gas, electricity, and home care ser- vices standing at around two million, between 20 and 25 per cent overall. "We would of course love for that per- centage to be higher," she says, although acknowledging that research shows different cohorts of customers out there – some wanting one provider to look a'er every- thing, others favouring a "jam-jar mentality". The home services model, technological or otherwise, is a diversification plan variously adopted by several energy suppliers, and now a key area of market differen- tiation as margins shrink and the price cap kicks in. "Our strategy has always been to provide wider and deeper relationships with customers in their homes," says Miles. "We of course love to supply their gas and electricity, but the way we think we can create meaning- ful relationships is through other services. "The home care services business has always been there, but we have expanded our range to deliver a bet- ter experience, products that are more relevant to a wider range of potential customers, and to personalise as well – one of the trends we see customers expecting these days. "Consumers want to control more in their home, they want things to be on their terms. Addressing all of those trends sits behind our strategy of how and what we do to become a 21st-century energy services provider, which is our stated ambition." I ask if she feels hamstrung at all, being part of an energy giant facing nimbler challengers? "There is no doubt it is difficult to compete from a cost perspective with those new entrants, because they don't have large infrastructure. But we also think we deliver a much better service. And we think we're more trusted than some of those small suppliers. "We have experience and capability and infrastructure and resilience that allows us to have more longevity, and that means we are worth paying for over the long term, which is what I think our brand stands for in the UK." Yet British Gas's customer losses have been well documented. In the first half of 2018 it lost 340,000 accounts – about 270,000 customers. "We've seen customer losses as the number of com- petitors has increased. At the same time, though, we have implemented an extremely successful loyalty programme, British Gas Rewards, with over a million customers now enrolled. That's had a really positive impact on customer retention and continues to grow as a scheme for us. "So, we believe we still represent a fantastic propo- sition for many customers, and as we do broaden our products and services, we hope that we will at least sta- bilise our customer numbers and grow our relationships going forward. "From our perspective, then, it's incredibly important to differentiate in order to stand out." On that note she references Centrica's five "partici- pation pillars": energy supply; home services, such as boilers and electrics; peace of mind, including insurance products; home energy management, including smart metering and its smart thermostat; and, finally, home automation, into which some of the Hive products fall, such as light bulbs, sockets and switches. Over time, the plan is for the business to be more weighted across the four pillars other than energy supply. "As our strategy has evolved over the years, our ambition is to be much more of a services provider than an energy provider." But smart home competitors abound – the most well- known is Nest, now owned by Google. And although the company loves devices, says Miles, future strategy will take account of how this space is now incredibly com- petitive. Meanwhile the growth of voice activation in customers' homes, thanks in no small part to Amazon Echo's voice assistant Alexa, means it is becoming less likely that customers will buy all their devices from one brand – because Alexa creates interoperability. And that's the real challenge, says Miles. "Where we think we can have success and carve out a place for us, is by providing meaningful services that those devices can enable for specific case uses." It's the thinking behind Hive Link, a new product designed to give carers – formal or informal – peace of mind about a loved one. A series of sensors, such as on the front door or kettle, can be installed to monitor daily activity. A "learning algorithm" then takes this data and identifies a behaviour pattern. It can spot if anything unusual occurs or fails to happen. Notifications are sent to an agreed "sharing circle" of family and friends. The proposition, developed in partnership with Carers UK, comes with no cameras, said to be a key factor in its acceptance by those being cared for. It's a theme that is close to Miles's heart. Her mum, who lives 300 miles away from her in Durham, has Parkinson's Disease, and it is a peace of mind tool she is finding reassuring. Before my hour is up, I ask Miles for her thoughts on our New Deal for Utilities campaign and what area of policy support might be on her wish list. Quick as a shot she answers: "Broadband." Some of the coverage gaps across the UK can deny access to ser- vices for those in rural parts of the country, she says. And, for Miles, being connected is key. "Our strategy has always been to provide wider and deeper relationships with customers in their homes."

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