Analysis  
8 November 2016

Customer journeys in the data-driven utility

This week, David Socha, practice leader of utilities and smart cities at Teradata, discusses the energy retail sector.

In my last blog, I wrote about the utility’s journey towards smarter asset management.  It has to be said, there’s a long way to go.  Though I hope I was able to provide a few pointers, at least.  But let’s move on from the engineering side of the business.  There’s at least one part of the utility company that, especially in countries where competition drives the market, often thinks of itself as a little different. They’re a little more modern, fresh and exciting than the old-fashioned asset management crowd.  Let’s talk about energy retail.

Surely, with the resources available to a multi-billion-dollar utility, the most customer-facing part of the business will have it all sorted out by now, huh?  Well, we all know that’s not the case.  Take the UK, one of the countries where competition has been around since the late 90s.  Huge multinational utilities there are still being fined regularly for atrocious customer service.  So much so that questions are being asked about the ability of the Regulator to do anything meaningful about it.  And the UK is not alone.  How can these companies still be so bad at interacting with customers?

There’s probably not an app for that

It’s not that some aren’t trying to do better.  They certainly are.  But too often, attempts to change eventually come down to buying another new billing, or CRM application, rather than taking the time to address the fundamental issues behind poor customer engagement.  New features and functionality will save the day.  They always have before, right?

Many utility companies have also fallen for outlandish claims about what supposed Big Data technologies can do for them.  In-memory databases that will turn base metals into gold.  Open-source technologies that will not only solve every business problem still to be solved, but will also do it free!  Really!1

But wait.  Maybe it’s time to stop buying new toys and instead get back to the fundamentals of serving customers better.  By understanding what it is they want and need.  And providing it.  Let’s face it, in an industry where the product is a commodity indistinguishable from everyone else’s identical version, all you have to differentiate with is service.2

Now admittedly, there’s a very good chance that technology will play a part in such an exercise.  There’s even a good chance it’ll be some of that Big Data technology I was so disparaging about.  But if we do it right, that technology is only a facilitator.  It’s a platform that supports what your business is trying to do.  And precisely which technology to choose is way, way down the list of things to think about when working out how to improve your customers’ journey.

Understanding the customer journey – with data and analytics

So what are these customer journeys?  Think of them this way: your customer interacts with your business in many different ways, typically over a very long time.  And each customer is different.  They each have communications preferences, from favourite media to acceptable frequency of contact.  They have individual payment patterns.  They have varying propensities to complain or commend; to commit fraud; to talk about you amongst their social groups.  They have different views on the environment.  I could go on.  How your individual customers go about those interactions with you and about you is their customer journey.  And here’s the thing: it needn’t be a mystery to you.

By integrating and analysing data you already collect, and by supplementing it with new data often readily available, you can map individual customer journeys.  I’m talking about data from your website; your call centre; your billing system; your trouble tickets (if your Regulator allows).  But I’m also talking about demographics and other social data that’s in the public domain and available to you.

With such a map, you can choose when to intervene; when and how to guide customers down a path to satisfaction; when to seize revenue opportunities; when to leave them alone; and perhaps even when to let them stop being your customer (if you can).  And none of this is rocket science.  Other industries have been doing it for years!

Let me put it even more simply.  There are three parts to this:

  1. Integrate your data. See all the ways, all the reasons and all the occasions your customers interact with you.
  2. Integrate your analytics. Find out how your customer interacts.  Learn what they like, what they want and what really upsets them.  And learn how valuable they are to you.
  3. Integrate your interactions. Act like a modern, connected, digital organisation.  Serve your customers when and how it suits them to be served.

It all sounds so easy, doesn’t it?  Well yes, easy to write down in a thousand words or less, certainly.  But here’s something to consider: this is not another futurology blog, imagining doomsday scenarios and proposing radical new business models while at the same time knowing no-one will ever come back and call me out on my wild predictions.

This is real.  Today.  Other industries - and even a few utilities - have already invested in understanding their customer journey in just the ways I describe above.  These are capabilities you can take advantage of now.  All you need is the vision to do something different.  Do more with your data.  You know you want to.

 

1 No, not really.

2 Yes, I appreciate there’s also the opportunity to sell - and potentially differentiate via -additional non-energy products too.  Let’s talk about that further in a different blog.

 

About the Author

David Socha is Teradata’s practice leader for Utilities and Smart Cities, advising utilities on how they can transform their businesses through data and analytics. He began his career as a hands-on electrical distribution engineer, keeping the lights on in Central Scotland, before being a part of ScottishPower’s electricity retail deregulation programme in the late 1990s. After a period in IT Management and Consulting roles, David joined Teradata to found their International Utilities practice.

 

 

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