CEO Opinion: Big Data stands to improve consumer engagement and create new revenue streams for energy providers, just as it has for other industries argues Tendril CEO Adrian Tuck.
You probably know someone, if not yourself, who watches House of Cards, the Netflix original drama.
But did you know that before anyone you knew tuned in, Netflix knew they would like it?
Before it developed its first original programming, Netflix analysed reams of customer data, according to the Tata Consultancy Services 2012/2013 Big Data Study.
The company gathered data on what customers watch, how they rate content, what they stream, where they are, what they talk about on social media and more. Findings revealed a huge fan base for proposed star, Kevin Spacey, as well as a large market for a remake of the 1990 BBC miniseries.
House of Cards premiered in February 2013. In the first quarter of that year Netflix signed 2 million more subscribers, a 7 percent increase over the previous quarter, according to a Harvard Business Review article. House of Cards became Netflix’s most streamed web content in the United States and 40 other countries, the Tata study reports.
Why does House of Cards’ success matter for the energy industry? Energy providers can use the same model of Big Data analysis as Netflix to improve their own bottom lines. The Tata study found that energy is one of the least advanced industries when it comes to Big Data immersion and application. Energy providers need to take Netflix’s cue and use data to personalise their offerings.
Here’s what providers must do to get started.
Adopt a consumer-centric technology platform
From billing histories, to past program participation records, to demographics, to home construction details, energy providers have access to terabytes of consumer data. Now, like Netflix, they need to put this information to use. They can do so most effectively by placing the consumer at the center of everything and using that shift in focus as the catalyst for transforming product development, marketing and implementation.
Energy providers need consumer-centric technology platforms to drive consumer-centric operations. Old data analysis systems relying solely on regression-based modeling and averaging don’t single out consumers for specific, relevant offers. The critical missing piece in these old data crunching systems is the analysis of actual home data.
Newer home simulation models can assess the impact of each particular home’s insulation, window design, HVAC configuration, thermostat set points and more. Based on their findings, these models can offer specific alterations that help individuals meet their energy savings goals, as well as determine what types of products and services would best meet their needs.
A strong home simulation model will combine this personalised home data with behavioral metrics to enable energy providers to micro target programs and services to individual consumers. As a result, consumers will receive highly relevant — and only highly relevant — messages, insights and offers across their preferred engagement channels.
More consumer engagement, less energy consumption, increased revenue
When Big Data micro targets energy providers’ offerings, it’s almost a given that more consumers will take an interest in reducing their consumption and will consider purchasing other energy-related products and services offered by their provider. Energy providers can continuously cross-sell and up-sell products and services that add value for individual consumers. The providers, in turn, see better financial results and can meet regulatory demands with ease.
To benefit from integrating Big Data analysis today, energy providers must adopt the best technology platform to serve their customers. The technology solution should, above all else, put the individual consumer first, personalising everything from analysis to offerings.
Netflix proved it’s possible. It’s time for the energy industry to achieve the same success.