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How many Western Europeans will be regularly using energy insight tools in 5 years? By energy insight tools I’m referring to the devices, often apps, which allow energy customers to see, monitor and act on their energy consumption.
Well, according to industry experts, it’s a staggering 65 million households!
OK, it’s not the most scientific study ever undertaken. There are differing interpretations of ‘Western Europe’ for starters, and results are based on our recent webinar poll of industry insiders working on, or interested in energy insights, so they may have a naturally positive bias. But that aside, 65 million is a large number considering that in a market around 5 years old, we estimate there are currently under 1m regular users.
Is this anticipated exponential growth realistic, or are we as an industry too distant from our customers to estimate true demand? It will of course depend on our perception of regular use. The market will be split between customers who use it daily or weekly to keep on top of their consumption and bills, to those that monitor regularly, but perhaps less frequently when the monthly bill arrives. The concept of the smart home also influences this figure. Would all TOON customers for instance access their energy consumption insights without its smart thermostat functionality? I suspect not.
However, we are seeing evidence of increased customer engagement from energy insights propositions, and not just anecdotal either but through active and regular use, and through behaviour change from targeted communication (such as Onzo’s 2 year study with tens of thousands of SSE energy customers). Customer engagement with energy insight propositions is starting to filter through to impact on the brand and business metrics of stronger brand satisfaction or advocacy, of lower cost to serve (reported by Centrica) and of a measureable retention benefit (seen by the Quby/Eneco partnership).
And this is just the start. These propositions are still in their early years, with companies testing what is possible and what is compelling. So, if we were to believe we can engage this large number of consumers, how do we do it?
Driving customer engagement
Propositions are usually designed from a functionality first perspective, often because it’s the product or innovation teams that are tasked with developing them. Whilst this has served us well in early prototypes and testing, we now need to shift the mindset to a customer first approach.
So rather than just use the energy consumption data to enhance the customer experience, we need to truly understand what the customer wants first, and then use the tools available to meet or exceed them.
We believe there are six prerequisites for successful customer engagement. Propositions must be:
We analysed a range of customer use case scenarios to bring this to life such as being able to check that our vulnerable loved ones are safe and warm in their own homes. Our analysis found that to be successful and make customers’ lives easier, propositions must resonate strongly with a range of different types of customers as there is no single ‘killer app’, and are habit forming or have enduring benefit.
Get all this right and it shifts the energy supplier relationship from a commodity to the much richer territory of being a trusted and valuable resource, from a utility to a cost saving enabler, or a trusted advisor or protector.
However, let’s not pretend that an energy insight proposition will resonate with all customers and be the industry saviour. The potential for the energy industry to change the customer relationship is strong, and one we must surely embrace. Indeed, this should be a key component of our customer engagement strategies. But, equally, let’s not be overly optimistic on usage and engagement when setting out business cases, as figures like 65 million regular household users in Western Europe is likely to come back to bite.
David joined Delta-ee in 2017 and manages the Customer Data Value advisory service, which helps our clients navigate this complex and dynamic area to become more customer centric. He is focused on helping energy businesses identify how customer understanding and data can drive positive change and value. David is a specialist in consumer insight and data, and its application to business intelligence, proposition development, customer experience and marketing strategy.
He draws from experience in multiple sectors, including most recently 5 years at Centrica as a consumer insight lead, adding significant value to customer and business alike. David holds an MBA with distinction from the Bradford University School of Management.
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