How the right customer data platform can help utilities retain market share in FY2024
- Written by Stephen Schwalger at n3 Hub
Customers are exploring their options and providers that are able to target them with personalised, relevant offers stand a better chance of capturing and retaining their business.
Are you braced for some serious churn, as rising energy prices prompt more of your customers to seek out a cheaper deal?
It’s a scenario we’re likely to see play out in the upcoming weeks and months, in the wake of the Australian Energy Regulator’s decision to ratify electricity price increases of 20 to 25 per cent in NSW, Victoria, South Australia and south-east Queensland.
Coming, as they will, on top of steep increases in the previous financial year – some small businesses saw their power bills soar by 30 per cent in FY2023 – the rises are likely to serve as the catalyst for comparison exercises and some serious shopping around.
That means utility companies will need to work harder than usual to retain the custom of the households and enterprises currently on their books.
The personal approach
Developing personalised marketing campaigns and offers can be an effective way for energy retailers to capture new business and retain existing accounts in a highly competitive market.
Research has demonstrated just how powerful the personal approach can be, for service providers of all stripes. Businesses that excel at it generate 40 per cent more revenue from their activities than average players, according to a 2021 McKinsey study.
And these days customers don’t just like it – they expect it. Some 71 per cent of businesses and individuals look for personalised interactions from the organisations they deal with and 76 per cent become frustrated when those interactions are not forthcoming, McKinsey found.
Doing more with data
Data is the critical element that enables businesses to deliver personalised interactions at scale. Collecting and aggregating transactional, personal and behavioural data allows them to create a holistic picture of each and every consumer and business account holder.
To collate and manage these streams of data more effectively, we’re starting to see some forward-thinking energy retailers investing in Customer Data Platforms (CDPs).
The term refers to software that brings data together in one place, where it’s easily accessible by marketers. It enables them to create a single customer view, which can be used to inform personalised marketing campaigns and offers for every account holder on the books.
Investigating, segmenting and targeting customers with well-timed and crafted offers and messages, via multiple channels, can result in improved customer retention and recommendations and referrals that help the company secure new accounts.
Choosing top technology
But not all CDPs are created equal. Selecting the one best suited to your organisation’s needs is critical, if it’s to gain maximum value from its investment in this technology.
How easily, or otherwise, the platform you’re considering can be integrated with your existing software stack should be a key consideration. Many energy companies are already awash with solutions that don’t connect or share information as well as they might. If that’s the case in your organisation, adding additional complexity may mean the new functionality won’t be exploited to the full. Hence, it can pay to select a CDP that’s compatible with a broad range of other platforms and programs.
The breadth and complexity of the data you collect should also be a factor in your decision making process. If sources are numerous and differ in format, a data integration CDP could be the best choice.
Your organisation’s long-term ambitions are likely to come into the equation too. In today’s turbulent times, many energy retailers are content for sales to merely remain stable but that may not be the case long term. Adopting a CDP solution that can be readily scaled will make it easier to accommodate future growth.
Security matters
It’s also vital to ensure the customer data you collect is handled appropriately and stored securely.
Tales of organisations that have been hacked or breached are legion and the fall-out, both financial and reputational, for those that become victims, can be damaging and long lasting, as the protracted saga of the Optus mega-breach in late 2022 illustrated to chilling effect.
Courtesy of the fact that they’re required to perform credit checks, energy retailers are in possession of a rich stash of personal data too. Fail to safeguard it as stringently as you might and your customers may well decide it’s time to disconnect, irrespective of how compelling your rates and offers may be.
Hence, it makes sense to implement a solution that offers optimum security. A dedicated CDP, for example, will allow valuable, first part data to be stored within an existing security perimeter, rather than on a cloud-based SaaS platform.
Surviving and thriving in 2024
Energy retailers will need to pull out all the stops over the next 12 months as financially conscious customers focus on doing whatever they can to minimise their monthly or quarterly bills.
Personalised marketing campaigns may help your organisation gain and retain accounts from businesses and consumers alike, and customer data technology can make it possible to deliver those campaigns efficiently and economically.
Against that backdrop, a flexible, scalable, secure CDP is likely to prove a smart, strategic investment.
