Personalized marketing is huge, well, at least in industries like retail, finance and telecommunications. In those industries it is all about reducing customer churn in incredibly competitive markets. As a result, there is great need for sophisticated customer marketing and segmentation analytics. With most North American utilities, the competition for customers isn't quite the same. However, although a utility may not lose a customer, customer satisfaction is king. And when utilities don't fully understand their customers, this can have disastrous consequences for customer satisfaction. Analytics can help limit these detrimental impacts to customer satisfaction.
A few years ago, I remember chatting with some residents in Boulder, Colo. -- a city with a Zero Waste Master Plan -- who were steaming that Xcel Energy sent them a full-color, almost book-like marketing piece about SmartGridCity. A couple of weeks ago, I talked with a public utility that experienced backlash against its assumptions about the competitive spirit of customers. After adding information to utility bills that illustrated how customers compared with their neighbors, the utility received a flood of angry emails and phone calls. Moms, for example, were upset that a house full of kids was compared to the energy use of a single-guy neighbor who travels most of the time. The customer pushback was so bad that the utility stopped sending out those comparisons, and realized it needed to refine its approach to customer engagement.
Beyond these examples, little things matter to customers. The other day, a friend brought up the fact that he gets a nice banner ad letting him know about the opportunity to pay his bill online -- as he's paying his bill online. I'm constantly reminded that my utility offers a wonderful energy-saving switch for my air-conditioner, which would be great if I actually had an air conditioner. Programs offerings, whether online bill pay, energy efficiency or demand response, may not apply to every customer. And, while mass marketing campaigns around these programs may not cause the customer outrage seen in earlier examples, those campaigns could wear on a customer's satisfaction. More personalized marketing helps save on marketing costs, but it also helps customers feel valued and engaged.
Even though customer churn concerns may not be at the forefront for most North American utilities, (although with increasing opportunities for customers to rely less on the grid -- think distributed renewable energy -- this could change, but that's another discussion for another day) understanding customers as individuals can help with customer satisfaction. Enter customer segmentation and marketing analytics, that can help utilities define customer individuality, predict how customers will respond to actions and offerings by utility companies, and better engage customers through more personalized marketing efforts.
In this short article, we can't cover all the ways analytics support personalized marketing, but there are places you can go to learn more. Examples include our recent Customer Analytics Report, Customer Analytics Issues, Trends & Drivers Webcast, or the upcoming Demand Response and Energy Efficiency Analytics Webcast that's part of Energy Central's Intelligent Utility Reality Series. We also have an entire track focusing on customer analytics and the blossoming utility-customer relationship at the Utility Analytics Week Conference and Exhibition in Arlington, Texas, September 18-20. Or give us a shout out on our LinkedIn discussion group, Utility Analytics Professionals to discuss the question: How can utilities use analytics to improve customer engagement and, ultimately, satisfaction? We'd love to hear from you.
As always, thanks for reading!
H. Christine Richards is a director of the Utility Analytics Institute, a division of Energy Central. You may reach her at crichards@energycentral.com.
