Blaggers Guide to Big Data – Utilities

Blaggers Guide to Big Data – Utilities
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David Pountney, General Manager, DT Melbourne (pictured left)

We recently renovated our 1940s home and like most renovators, now the dust has settled, we proudly give visitors the “Remember the peach bathroom and asbestos?” guided tour. Despite changing almost every room in the house, it is one of the smallest items that now gets the biggest reaction: the thermostat.

Designed by ex-Apple employees, the Nest Thermostat is possibly the most engaging piece of technology I own. Whilst its stunning design makes a great first impression, and the ability to adjust the heat from the comfort of the doona via iPhone app brings real benefits, what puts the Nest in a different class of thermostat is the way it constantly learns how we live our lives. 

Nest monitors how long on average it takes to heat our home, what time we normally wake up, and what days and times we’re normally out of the house. Take this behavioural data (and weather data if you’re in the US or Canada) and Nest now takes complete control of our home’s temperature to minimise energy usage and maximise comfort.

Couple that with complete visibility of our energy usage over time, and I’m in big data heaven.

This is driven by data that Nest aggregates from the device itself, and other available sources. But the missing input is data from my utility provider on what all this smart usage means in dollars. Something that could be easily overcome with an API that Nest (and other devices) could integrate with.

Historically, utilities have been some of the most progressive data-driven direct marketers through the development of segmentations and propensity models that help make sense of a vast and diverse customer base. But the world is shifting – more and more, consumers are using their own behavioural data to improve their quality of life. The biggest value a utility can add through big data is not pushing messages, but rather a pull approach where each customer has access to their data through engaging tools, like Nest.

One of the biggest challenges for utilities is becoming a "dumb pipe" in an increasingly intelligence-rich data world. Perhaps the simplest way to avoid this is if your customers want you to be smart. What value do we get from sharing our personal data with our power companies? Very little. But what if that data improved the way we experienced our homes, and heightened the time we share with our families?

My point here is that my personal engagement with a basic utility has been enhanced, not through the smart of use of data to push messaging, but rather the integration of data with beautifully designed hardware, software, and ultimately in the case of Nest, the gamification of consumption.

Ask not what your customers can do for your data, but what your data can do for your customers. 

As such, in addition to segmenting big data to drive push communications, utilities must start thinking about how they can make their data available to integrate with devices and applications that will make their customers go weak at the knees with excitement, and thus develop structural and emotional bonds.

Andrew Pink, Strategy Director, OgilvyOne Melbourne (pictured right)

Unless you buying a Nest Thermostat like David, for most of us there’s a near complete sense of apathy towards the energy sector, driven by limited choice and very little differentiation in products and services available. It is a functional, low interest category.

With prices continuing to rise, energy companies have realised they need to be increasingly transparent with consumers as more and more start to look around for a better deal. The introduction of smart meter technology has addressed this in some part, helping to minimise wastage through greater awareness of our energy consumption habits. But unless you want to sit at home in the dark, or buy a Nest, it fundamentally doesn't offer any real choice.

Unlike David, I was driven to change discovery in the category not through renovation, but when buying a new house. Trying to find the best energy deal around, I stumbled on a very different way to purchase energy. One that uses open data access to place the customer at the heart of the decision making process from a back end perspective.

Powershop in New Zealand takes a unique business model approach by involving its customers in the end-to-end process of power acquisition and consumption. Rather than having to pay a fixed price for power each month set by their energy provider, customers are served offers and promotions each month based on the varying rates in the wholesale price. Able to buy power credits upfront from any wholesales on offer, they can choose cheaper rate packages as they become available, making it not only more cost effective but giving customers a more effective way to manage their energy household expenditure.

This may not sound radical in other business environments – Amazon does this every millisecond of every day with its ‘other buyers purchased’ messaging when checking out – but it's a near revolution in the energy sector. The use of data to empower and give consumers complete freedom to choose when and where they buy their power not only benefits consumers financially, it also delivers a richer experience that can only bond consumers to Powershop in ways that other energy providers could dare hope for.

So not wanting to sound too much like an evangelist, or Dave, I urge providers to release the power of big data, placing not just information at the finger tips of consumers, but integrate smart solutions like David’s Nest thermostat and Powershop’s unique way of buying power, to deliver tangible, meaningful and actionable outcomes to the consumer.

However, until Powershop arrives on our shores, I’m just going to have to join David in happy geekdom, my Nest thermostat should arrive any day now!

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