The benefits of increased customer insight through smart metering
This is an article about smart metering from a workflow vendor like Tallyfy.
Sounds strange, but we really do believe that utilities need to think about better internal workflow systems through tools like Tallyfy — even though innovations in the utilities category seem like they’re fashionable.
Last year the UK government confirmed the target for providing smart metering to domestic and some non-domestic users to be completed by the end of 2020. It will be the largest smart metering programme ever undertaken. France also has a target for 35 million smart meters by the end of 2020, Spain is targeting completion by the end of 2018. Meanwhile the Netherlands began rollout in 2008 and Italy has the largest deployment so far — at the end of 2005, 30 million smart meters had been installed throughout the country.
As smart metering becomes ‘the norm’ for households and businesses we look again at the advantages to be gained from the analogue-to-digital transformation of the industry. In basic terms there is a huge increase in the volume of data that is created and available to the energy provider and the end customer. However, as with the generation of data in all industries, the data alone is not valuable; it must be made to mean something and deliver actionable insights.
The UK rollout was stalled due to additional impact assessments studying the business case for smart metering, and here we take a recap of the major advantages of this new technology in the industry. Here are our top ten benefits of increased customer insights through smart metering.
1. CUSTOMER SEGMENTATION
With increased information about all customers, it is possible to use energy consumption patterns to create better and more precise customer segments. At the moment customers are segmented roughly through marketing demographics, but with precise data, utilities can create much more specific groups and determine a customer’s segment with a great deal more accuracy.
This leads to additional business benefits:
— Customers will have greater buy-in with their utility when they are receiving information that is timely and accurate according to their specific needs.
— Marketing and sales messages can be highly tailored for greater resonance with the target group and therefore greater uptake of new or additional services.
— The utility can establish trends within customer segments to assist with product development.
— From the customer segment groups the utility can create specific ‘personas’ to represent their customers and thus begin to personalise the customers’ whole experience with the utility.
2. ENERGY EFFICIENCY BENCHMARKING
Benchmarking is used in many different fields to drive behavioural change. With the intel driven by smart meters, utilities will be able to provide customers with specific positioning, targets and roadmaps regarding the efficiency of their energy usage. The information can also be presented as peer-to-peer or in-segment comparison which makes it more compelling and persuasive. The ultimate goal is to improve the customers’ understanding of their energy consumption and lead them to better, more empowered decision making.
3. DATA AGGREGATION
Customers can be provided with many types of data — historical billing or usage, seasonal statistics, detailed forecasts — essentially all of this holds value when presented as aggregated information, ideally in a visual format. Data aggregation gives a more detailed, and yet easier to understand, story to the customer. This is specifically true in relation to billing and invoices which can now be enhanced with better quality insights so that the customer can see exactly what they’re spending, where, when and on what.
Another opportunity regarding data sets is to add in information from the appliances in the building showing the energy consumption for different items. With this intel customers can choose whether to change their usage or replace their appliances.
4. IMPROVED LOAD FORCASTING
Accurate load forecasting has always been the holy grail for utility companies. With smart metering the industry can now move on from planning for the ‘Coronation Street kettle break peak’, to a more sophisticated era of forecasting based on detailed energy consumption patterns for households and businesses.
5. INCREASE CUSTOMER SATISFACTION
According to the 2015 Which? Energy Companies Satisfaction Survey, the top six biggest energy providers in the UK (British Gas, EDF, Eon, Npower, SSE and Scottish Power) managed to scramble a customer satisfaction score of just 50% or lower. However, two particular features of smart meters will help to boost those satisfaction levels. Firstly, customer will have self service access to their data. With the customers’ data becoming more useful this will be of high value to customers leading to greater satisfaction with their service. Secondly, smart meters mean the end to the biggest inconvenience of all to customers — meter reading visits.
6. INCREASE TRUST
Utilities have a long way to go before they achieve the status of preferred brands such as British Airways, Rolex and the BBC (the top three favourite brands in the UK according to research by the Centre for Brand Analysis in 2015). However, with increased visibility — of energy usage and spending — customers will have more trust in their suppliers and this is a good foundation for building better and longer lasting relationships.
7. INCREASE POWER TO MOVE
Conversely, with more customer insights, customers also become more empowered to move between suppliers. With better intel about their energy usage and spending, consumers are in a better position to understand what and how they want to change, and with better visibility across the whole market they will feel more able to shift from one supplier to another. This might look initially like added friction in the market, but, in fact, if customers have made the proactive decision to move to, or stay with a supplier, they will be more bought into their service overall.
8. BETTER SERVICE FROM CALL CENTRES
Armed with higher quality and quantity of information on the individual customers, the utility service, and the market overall, call centres can provide optimum solutions and advice to customers. Just as the utility’s marketing messages can become more precise, and consequently better received, call centre services can be much more highly tailored with exact solutions and added value insights for the customer. Overall, call centres should aim to move into a more advisory role than problem solving alone.
9. INDUSTRY SMART ENERGY REPORTS
Industry-wide reports into energy usage, smart energy, and methods for increased energy efficiency are of benefit to government, utilities, customers, businesses, environmental groups, and more. The whole energy industry supply chain is serviced by the increased flow in information which can lead to better consumer advice, better informed legislation and market competition.
10. TO THE FUTURE…
CONNECTED SYSTEMS & PROACTIVE CUSTOMERS
Approximately 90% of homes in California have a smart meter. A Californian startup company, OhmConnect, launched earlier this year provides a service that connects smart meters with smart phones and other Internet enabled devices in the home. In April, an article in IQ — the tech culture magazine by Intel Corporation — described how the service provided by OhmConnect is changing the way customers interact with their appliances and take control over their energy use. The platform receives huge amounts of data taken every 15 minutes from the smart grid, plus energy market statistics, weather and zip code information, processes that data and sends alerts to subscribed customers when demand is peaking. If customers respond by reducing their energy usage during peak times they receive OhmConnect points which can be converted to cash over a period of time.
