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James Miller Principal Customer Strategy & Data Analytics Delta Energy & Environment

Energy customer insights: what they are and why are they so important?

As energy transforms into a service-oriented sector, investment in customer insight is becoming an increasingly important means to drive engagement. Intelligent insights are the key to keep, acquire and grow the value of energy customers in a highly competitive, deregulated world. 

In other sectors, such as retail, insight drawn from a wealth of customer data has long been used to optimise engagement. So there is little surprise that we are now seeing energy companies reinventing customer interactions, through their own insight-driven propositions.

The sector has long faced significant challenges finding ways to encourage consumers to take an active interest in how they consume energy. However, with a growing array of connected meters, sensors, appliances, and other devices, the sector now has an unprecedented opportunity to change the status quo.

These technologies are beginning to yield copious data points, with the capacity to reveal how we all consume and interact with energy. In some cases, data granularity is truly incredible (at least compared to consumer data in other sectors), down to the level of microsecond measurements of our power consumption patterns and actions.

Few industries can boast such potential for understanding the minutiae of consumer behaviour in the home.

Energy data can take many forms, including measurements from meters, boilers, thermostats, solar PV, batteries, and even electric vehicles. All have the potential to yield insights that could be utilised to improve customer energy experience.

The potential benefits of energy insights extend beyond the sector (data privacy permitting). There are many possible ways in which smart meter data might be used to do more than just measure power consumption. Examples include home security, where smart meter data could be used to indicate whether or not a building is occupied. Neither is it hard to imagine this data being of great use to appliance manufacturers and retailers, keen to design and sell their products in line with actual customer behaviour.

The 3 types of energy insights

Delta-ee is currently categorising the many types of energy insights, so we can all better understand the ways in which energy companies are, and could be, using these to strengthen customer relationships (see diagram).

1. Energy behaviour

Providing customers with intelligence about how they use energy is fairly common. Utilities are advising customers about their consumption history, making comparisons with similar households (for example), and forecasts. Demand disaggregation techniques take consumption intelligence a step further, using advanced analytics to estimate appliance level performance, which provides clarity on the impact of individual equipment on a customer’s overall power demand profile.

Behavioural insights are also available for more niche energy concerns such as solar PV, batteries, and electric vehicles.

2. Energy actions and alerts

We are seeing a trend towards more dynamic uses of energy insights, including real-time temperature alerts and appliance fault warnings. Advanced analysis of customer history is also allowing for the creation of personalised tariffs, budgeting plans, and tailored energy efficiency advice, designed to cater for unique demand profiles. This now extends to demand response incentives, set up to encourage customers to actively shift energy demand to optimum times of the day.

3. Energy automation

Home automation is beginning to offer consumers a highly compelling case to care about and interact with energy. This is the frontier for energy insights, where we are likely to see most innovation in future. Analytics driven heating systems, automated demand response, and even automatic tariff switching, all offer a glimpse of a future where insights will personalise home comfort and energy use.

 

What are the benefits for customers and energy companies?

An improved energy experience can mean many things to many people. The diagram below shows just some of the ‘customer use cases’ for energy insights. In turn, these could have significant benefits for energy companies. Better customer relationships are likely to reduce costs and customer churn, while boosting retention and acquisition (amongst a host of potential upsides).

In reality we are probably some way off understanding the true benefits of energy insights. More needs to be done to understand what resonates with customers and what types of interactions will really encourage changes in behaviour and better engagement in energy.

While my money is on propositions utilising data insight to offer customers the convenience and peace-of-mind of true energy automation, we will no doubt continue to see much experimentation.

What is clear is that the companies likely to succeed at energy customer engagement will be those prepared to invest in energy data and understand customer needs and behaviour. Harnessing insight to create a truly compelling and personalised energy experience, will win the day.