Energy retail services: are you thinking about the human element?

Customer needs should trump utility priorities when developing new products and services. Engerati investigates
Published: Mon 31 Oct 2016

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What can energy companies learn from luggage designers about developing new products? Customer-centred design, says Bill LeBlanc, Chief Instigation Agent at E Source, a US-based consultancy focusing on how consumers use energy and how utilities can best serve them through programmes, products and services.

Luggage makers added wheels to suitcases after realising that travellers were using work- arounds such as ‘wheelies’, as well as the fact that the technology was readily and cheaply available. Translate this to utilities and it means developing products and services that address customer needs and not solely those of the energy company or regulator.

“Energy companies have almost always developed products from a load shape position, what you might call engineering thinking, which focuses on the utility’s need to reduce demand,” LeBlanc told Engerati.

Generally, the last thing looked at when developing products or services is the customer market, he says. “Utilities typically want to introduce products that are fully baked before going out to market to pilot them, often missing the mark with customers. But superior results can come about by introducing concepts to customers early in development, then iteratively improving the product until the value proposition is strong.”

The human approach

LeBlanc suggests that energy companies need to take a different approach and move the conversation from load shape and rate redesign to customer needs in what is known as human-centred design or design thinking.

A first step in this direction is to change market research. If a utility wants to encourage small and medium sized entreprises (SMEs) to be more energy efficient, then don’t expect those business owners to be able to tell you what they need through a panel or online survey, he says. LeBlanc suggests the utility uses data to select a few of the most energy efficient companies within a target group and sends staff into the field to shadow them.

“Watch them, follow them around and ask ‘why’ often. By spending time with your extreme users, you can figure out what they’re doing differently. And at the other end of the scale, spend time with SMEs that are using way more energy than their peers to find out why they don’t care about saving money.”

 

Data and customer-centred product development

As LeBlanc points out, data is providing the key to unlocking the potential of human-centred design within utilities. FirstFuel Software, a US-based digital engagement company, has developed a customer intelligence platform that helps utilities develop customer-centred products and services for SMEs.

Erik Mazmanian, Director, Product Marketing & Strategy at FirstFuel, said: “Often utility services are developed in a bit of a vacuum. FirstFuel’s platform uses advanced analytics to transform each customer’s meter data into granular information about how they use energy, what services might be most applicable to them, and how likely they are to be interested in an offer. We can aggregate that information and break it down by segment, geography, business type and size.

“This insight helps the utility to make more data-driven and targeted decisions about what to sell next that are based on real needs. Essentially, the utility knows before they even invest money in developing a service what size the market is, who the target audience is, and how likely they are to sign up.”

Mazmanian also points out that by extracting customer intelligence from data, utilities can drive additional value by optimising existing investments in smart metering infrastructure or in digital engagement programmes. [See live webinar - Energy Retailing Solution: How to use Digital Engagement to Unlock Customer Satisfaction and Growth]

Utility case study: E.ON and SMEs

FirstFuel works with large utilities in the US and Europe, including E.ON UK. The pair collaborated on an Energy Toolkit, a digital engagement platform aimed at helping small businesses improve their energy efficiency. Abbie Wesson, B2B Solutions Senior Delivery Manager at E.ON UK, explains: “When developing the Energy Toolkit with FirstFuel we knew - because our customers were telling us - that they needed hard data as well as relevant and personal information.

“FirstFuel had experience from the US market on the detailed information they could provide for business energy users and how we could turn that into a resource for small businesses who are tight on time and budget but keen to improve energy efficiency through accurate data tracking and suitable product solutions.”

Wesson said through this approach the energy supplier helps customers make the right decisions for their individual businesses. Using the personalised data from the Energy Toolkit, E.ON  is able to delve deeper into customers’ operations and identify where they are using or wasting energy. “So the data informed the product choice,” she says. “Then to back that up we have agreements with a number of suppliers to provide exclusive or heavily discounted products to E.ON customers.”

Managing change - putting the customer first

E.ON’s programme is an example of the traction that E Source’s LeBlanc says he is seeing in the utility market after talking to utilities for six to seven years about human-centred development. He admits though that changing the approach to product and service development involves a cultural shift hampered by the “sheer baggage of momentum” that large organisations carry.

LeBlanc’s advice is to start small. Focus on one problem such as small building energy efficiency and use customer-centred design to create a pilot. When you have one success under your belt then allow that team to spread the word within the central organisation until “a fire starts”. And don’t be afraid to iterate on your initial idea. “You can take even a quarter-baked idea to customers to test their interest and then be prepared to quickly change it to meet their needs.”