Why Australian utilities can’t afford not to harness data
The extraordinary spread of smart technology, and the ready access it has provided to a mother lode of real time data, is changing the way companies deliver customer service in a slew of Australian industries, including the utilities sector.
In the competitive and fragmented market that Australia’s energy industry has become, post the deregulation push of the late 1990s, the ability to offer customers personalised and responsive service can be a point of difference and a source of competitive strength.
Conversely, utilities that fail to embrace digital disruption and technology-driven innovation may find more agile competitors making inroads on their customer base and bottom line.
Big business, bright future?
Electricity retailing in Australia is a $47 billion industry that has been growing at 2.2 per cent per year since 2014, according to 2019 Ibisworld research.
Key factors contributing to electricity retailers’ success include appropriate pricing policy, prompt delivery to market and the “ability to alter goods and services produced in favour of market conditions”, the report notes.
There are 203 businesses active in the electricity sector and typically customers, both business and consumer, regard their offerings as an “homogenous good”, rather than a product which can be differentiated from those available from competing suppliers.
Doing more with digital technologies
That leaves pricing and customers experience as the key battlegrounds for customer hearts, minds and wallets; just as they are in many other industries.
A term used to describe the interaction between an organisation and its customers over the course of their relationship or dealings, customer experience has become a singular focus for Australian businesses of all stripes in recent years.
Research suggests there’s plenty of room for improvement. Acquia’s Closing the CX Gap: Customer Experience Trends Report 2019, which polled more than 5000 customers and 500 marketers in Australia, Europe and North America, found customers had rising expectations – and a growing determination to seek optimum experiences.
In Australia, they can be hard to find – according to the research, more than 50 per cent of Australian consumers felt brands had failed to meet their expectations on the customer experience front.
Here are a couple of ways utilities can deploy digital technologies to improve customer satisfaction, improve market share and generate efficiencies across the enterprise.
It’s good to talk – building better bonds through regular communication
Better customer experience begins with knowing the customer. Cloud computing, automation and multi-channel communication solutions can be used to engage with customers beyond the traditional dispatch of the quarterly bill and the online posting of outage updates.
Forward thinking utilities elsewhere in the world are using these technologies to facilitate communication that’s regular, meaningful and useful – think personalised operations updates, resource efficiency programs and tailored rates structures.
Forecasting the future – big data can help
Exploiting the insights contained within large data sets has become a focus for a multiplicity of enterprises. Utilities are in a position to collect a wealth of real-time data on power usage, courtesy of digital technology, including smart meters and the Internet of Things (IoT).
Some Australian customers are already enjoying the benefits the former can deliver, including the ability to track their energy usage remotely, optimise their overall consumption and – bottom line – save a significant sum on the bill.
Data analytics technology can be deployed by electricity companies to exploit usage data in order to forecast energy consumption and to inform dynamic pricing. With an array of renewable energy sources now feeding into the grid, it can also be used to forecast power generation requirements for a range of weather conditions.
Utilising data for commercial purposes necessitates data protection measures, which are comprehensive and rigorous. It’s incumbent on Australian utilities to ensure they have sufficient security in place, as digital technologies become more pervasive across the enterprise.
Australia’s privacy watchdog, the Office of the Australian Information Commissioner, has the capacity to impose seven figure penalties on enterprises that fail to protect customer data or to mediate breaches appropriately, should they occur.
A significant data breach can generate reputational damage along with a sizeable remediation bill, neither of which is an attractive prospect for utilities operating in a commercial and highly competitive market.
Thriving in a digitally disrupted world
Digital technologies are rapidly transforming industries in Australia and around the world. They can open a wealth of possibilities for utilities prepared to exploit them to the full – and take steps to ensure customer privacy is not compromised in the process.
This article originally appeared on Energy Source & Distribution.