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WHY CUSTOMERS DEMAND A DIFFERENT EXPERIENCE FROM UTILITIES TODAY
As customers, we are all becoming more demanding. We want companies, including our energy providers, to see and respond to us as individuals, providing a personalized service that meets our individual needs.
Realistically, this is not the level of service that most utility companies currently offer today. It is, however, within reach by using information in a smarter way.
We want utility companies to recognize where and how we use electricity, and we don’t want to feel that our electricity use is confined to the home. As electric vehicles become more widespread, why should we not pay one single electricity supplier for all our charging needs, whether at home or around town?
As we become more aware of our impact on the environment, we want our energy supplier to help us become more ‘green’. This isn’t so much to save money on bills, but more to ensure that our impact on the planet is as low as possible, by providing us with information about when and how we can use energy most efficiently.
The key to smarter decisions is the effective use of analytics.
Over time, we have seen far more companies adopt analytics, including in the utilities sector. A recent SAS survey* found that almost three quarters of companies were using analytics across the whole company, either tactically to help manage projects, or strategically as well, as a core part of the business.
This increasingly pervasive use of analytics is to develop actionable insights. Utilities data comes from two main sources: customers themselves, and the Internet of Things (IoT). Customers are already providing significant amounts of information about their usage, through a growing network of smart meters. As home management systems become more widespread, more and more information is available.
Digitization means that connected sensors can be used to improve the efficiency of the grid. Sensors can help to predict and anticipateproblems, meaning they can be fixed before they occur, reducing downtime and outages. IoT technology also means that more devices can be connected, including solar panels, wind vanes and batteries. This allows better and more efficient use of power.
There are four main ways that utilities can use analytics: in corporate operations, to manage assets and operations, to understand customers better, and to manage the company portfolio as a whole.
Corporate operations includes record management, workforce, and security. Turkish company Enerjisa used data management analytics to bring together customer data in one place and merge and clean its records. That reduced the number of records by 25%, and the company then increased the completeness of customer records by 30% by sourcing and integrating data from elsewhere, such as local chambers of commerce. This hugely improved understanding of customers.
Analytics coupled with IoT technology is useful for utilities to manage operations and assets by improving maintenance. The Salt River Project in Phoenix, USA, uses data from sensors in generators to support predictive maintenance, preventing unscheduled downtime. It also uses analytics to improve predictions of customer demand, and therefore enable more accurate supply by purchasing or selling on energy when necessary. This allows the company to keep costs as low as possible, while still being able to supply its customers.
Customer analytics is perhaps the most obvious use of analytics, and enables utilities sector to improve their understanding of customers, and therefore offer more appropriate and more personalized services. Endesa, an energy company in Spain, has used analytics to reduce customer churn by around 50%. Its focus has been on better customer segmentation, to improve campaign management, and to develop new products for specific groups of customers.
Customer expectations are changing across industries. New technology offers huge potential, and new entrants are changing the way that industries work.
By focusing on customers and their wants and needs, and innovating to match and exceed high customer expectations, they are setting the bar high. Incumbent firms everywhere must change or die.Perhaps nowhere is this more true than in the utilities sector.We invite you to dig and learn more utility insights