In a world more focused on sharing, efficiency and affordability, adding customers for utilities is simply not the win is used to be. In fact, “retaining” them is more important than ever for today’s utility players. This is why data can play a pivotal role to drive new insights that can ultimately help utilities evolve in an era of change and disruption taking place within the energy sector.
As you can see from the rapid growth in microgrids, community solar initiatives and battery storage solutions, modern energy infrastructure is being led by technological innovation which is changing how utilities must position to stay in front of customers. Why? Today’s energy customers have choices that could eventually diminish the role utilities presently serve, something that can ultimately hit their bottom line. In fact, a 2015 study from the Rocky Mountain Institute pointed to how solar-plus-battery systems will lead to fewer grid connected customers and roughly $35 billion in utility revenue losses per year. However, this doesn’t have to be the case. In fact, if data analytics tools can be more advantageously be used, customer retention will become an easier sell and actually help drive future profitability. This reality makes tapping customer data points even more important in a utility space that is experiencing a social Darwinism moment thanks to the personalization of energy.
The energy industry is certainly going through a rapid transformation at a time when it also largely has a perception problem. People use electricity daily but when the lights go out, more often than not, so does consumer trust in utilities. Considering trust is a characteristic, along with reputation, that are crucial to toward today’s target energy customers, especially millennials, utilities can no longer be content with customer acquisitions alone. This should makes customer retention an even bigger and more critical component to strategic planning initiatives for utility management teams.
With increased pressure at utilities to plan for the future, especially by shareholders and customers alike, predictive consumer behavior analytics, including real-time energy simulation models, can be a game-changer for utility decision makers to consider when contemplating going after new customers, reaching out to older customers and retaining customers all in new, more engaging ways that are needed more than ever. Why? Gone is the one size fits all approach when utilities reach out to consumers - and consumers know this, but not all utilities are eager to change. The problem is those that do not embrace this new customer-centric focus will sadly be left behind wondering why their customer base and revenue stream continue to diminish.
The strongest utilities may ultimately be able to survive, for now - but when positioning for long-term growth, energy data analytics can help utilities stay sharp, strong and smart enough not only to survive, but to “thrive” in an increasingly modern energy landscape that is becoming more individualized and agile.