June 27, 2017
What data-driven marketing means for utilities companies
By: Mark Sherwin

Marketing is entering a new normal, where brands must compete for ever more demanding customers in markets that are increasingly competitive and commoditised. In this environment, data analytics and marketing automation are everything, transforming the nature of marketing into a data-driven, customer-centric operation that unifies business disciplines across above- and below-the-line activities. New normal marketing will affect every company in every sector, but here I’d like to look at what it means for utility companies.

The transformation of utilities marketing

Until recently, utilities have relied on basic marketing techniques, such as TV ad campaigns or large sponsorship deals. Many utilities’ marketing departments were therefore relatively unsophisticated. Even when digital technology first started transforming marketing in other industries, change at utility companies was limited: initially focused only on search engine marketing to try and compete against the emerging price comparison sites.

Today, however, utilities have no choice but to modernise their approach to marketing. This is because of the advent of new start-up utilities that excel at using data-driven marketing techniques to win market share. Responding to consumers’ increasing appetite for rich and convenient experiences, companies such as Ovo Energy, First Utility, and, more recently, Bulb Energy, have rewritten the rulebook on utilities marketing. These companies are using data to know more about their customers than ever, to target them more successfully and to deliver value-add services that build loyalty.

The benefits of data-driven marketing

If incumbent utilities are to compete, they must put in place new skills, platforms and processes that leverage data and automation to deliver more sophisticated and low cost customer experiences.

In fact, data-driven marketing holds the key to success across customer acquisition, retention and service. This is because data-driven techniques enable utilities to profile the customer on an individual level, helping utilities better target their campaigns. Here are some key instances where this capability will prove useful to utilities:

  1. Life context –  Predictive data analytics can alert a utility to key moments in the customer lifecycle. For example, browsing data might reveal that a customer is planning to move home, allowing the utility to target them with relevant promotional offers, such as money off their first month following the move.
  2. Geographical context – Data analytics can also reveal key information about where a customer lives, crucial for effective targeting of services and promotions. By using data analysis to understand where a customer is based, utilities will know who the main player in that region is, and by extension what they need to do to compete.
  3. Usage context – Analysis of usage patterns combined with geographical context can alert utilities to high value customers (i.e., those with higher consumption patterns based in wealthy areas of the country). Programmatic and personalised marketing techniques can then be used to win high value customers, or target existing customers with upsell opportunities. With margins under increasing pressure, this capability is one that few utilities will be able to do without.
  4. Agility – Automated, data-driven marketing allows utilities to react quickly and retain control of the customer journey. For example, programmatic, personalised campaigns across social media and other online channels are perfect for reaching customers before they are lost to price comparison sites.
  5. Self-service – Data-driven marketing helps companies change the behaviour of customers. For instance, marketing can encourage customers to use online, self-service tools that are less expensive for the utility to provide than call centres, and more convenient for the customer to use. This can be as simple as using an email campaign to encourage customers to engage with online billing, or as advanced as introducing AI-enabled chatbots. This approach reduces cost-to-serve while increasing customer stickiness.

We’re entering a new age, where customers are taking more control of their relationships with brands, and expect more in return for access to their personal data. Fast-moving utilities can use this trend to their advantage, creating customer-experiences that build customer intimacy and enable a new range of hyper-personalised, context-aware services.

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