Customers under the microscope
OGE and Pepco are data mining for success
Published In: Intelligent Utility January / February 2012
FROM PILOT PROJECTS TO DYNAMIC PRICING products, U.S. electric utilities are taking a clearer, more microscopic look at the needs of their customers, segment by segment, before launching.
As one utility insider recently quipped, the focus has turned from "what's good for the utility is good for the customer" to "what's good for the customer is good for the utility."
New data, and the ability to analyze it even more specifically have led to the ability for utilities to build more complete customer profiles. Age, income, neighborhood, electrical usage patterns and more all play roles in better defining customer preferences-and perhaps even needs-for the utility.
Data and dynamic segmentation
Data is playing an increasing role in the electric utility's daily operations, as well as its plans for the future. "The data theme continues to weave its way through the future of energy and the needs of our customers," said Alan Dulgeroff, director of IT enterprise and corporate systems for Sempra Utilities, in a recent Intelligent Utility Reality webcast, "Lessons Learned: How Utilities Leverage Data."
Meter interval data, in particular, is a primary source of new information. For OGE Energy Corp., it's key to the company's efforts in customer segmentation. "Essentially, where we see meter interval data is the ability for us to do what we're calling dynamic segmentation," said Paul Dick, OGE's director of enterprise information management. "To be able to slice up our customers in all these new ways, to get that insight into what these new segmentations are with the customers and the way they react reflects the services that we offer them."
But it also offers OGE other opportunities. "As well, this is now giving us the ability to enhance load curve analysis, and be able to do that across all segments using the segments that were created in the dynamic segmentation, so that we can now do rate-making, and look beyond the traditional methods of load research-type meters, and the interval data that they provide on a statistical sampling," Dick said.
Customer segmentation for energy efficiency messaging
Pepco Holdings, Inc., which serves 1.9 million customers through its regional subsidiaries Pepco, Delmarva Power and Atlantic City Electric, realized that it needed a new brand positioning and messaging platform to support its energy efficiency, demand response and overall smart grid efforts. As well, it wanted to move its customer engagement efforts forward, in an effort to better position each regional electricity provider as a trusted energy advisor for its customers.
The first step? Identify and profile key customer segments to focus messaging, marketing efforts and resources.
The result? Key customer segments were identified and profiled, and a three-year marketing plan was built around the core identified audiences to help reposition the organization and its regional brands. An integrated marketing communications plan was built that appealed to specifically identified audiences in ways that attracted their attention (i.e., a mix of traditional and new media, a visual platform with emotional appeal, etc.).
"The days of viewing customers through three large prisms-commercial and industrial (C&I), residential and residential low income-have long passed," said Charles Dickerson, vice president of customer care for Pepco Holdings. "They have different strengths and need to be communicated to in a way that resonates with them. In order to be effective in the communications space, the traditional views need to be disaggregated.
"Segmentation is a very effective tool to accomplish that objective. It allows the message creator to develop a message that will be tailored to a customer's preference for how they want to be communicated to and what messages are likely to be well received."
Working outside the box
In the past, customer segmentation, for the most part, never got past the basics: residential, small business, commercial/industrial, etc.
And while there has always been an understanding that not all residential customers are alike, data mining has given the industry the ability to make that knowledge actionable. And we're just scratching the surface of what's possible.
"The evolution of the customer and the grid analytics capability are just being scratched at this point," OGE's Dick said. "We're working to integrate those two together, and we're looking forward to future innovations. We're all creating methods to implement those."