"We now have 1.5 million customers and have tripled in size," says Bill Wilkins, CIO of challenger energy services firm First Utility. Since the last Bill Wilkins interview with CIO UK in December 2013, the Warwickshire-based energy firm has added 760,000 households to its books and is comfortably the seventh largest energy firm in the UK.
"What we have seen in the past year is that the appetite for smaller providers has really grown as the awareness of the smaller providers has helped," reveals Wilkins. "First Utility is now a £100 million revenue company, which is a significant business," he says of the retailer that does not produce any energy but resells it from the open market.
"It is still a complex business, as we rely on between 60 and 100 partners to operate." Competition in the energy market is fierce, and while organisations such as First Utility push to make the marketplace easier for the consumer by driving up awareness and allowing customers to switch providers more easily, it too can suffer.
"We've become better at being a price leader; that means we have grown. Now we have to support a whole range of metering types," he says. Initially, First Utility was founded to focus on the smart meter market. Now, although still championing smart meters, the energy provider supports a wider range of billing options with customers.
For the business to grow, it had to have a scalable platform. Back in 2013, Wilkins described how he had simplified the organisation with the adoption of Saleforce for CRM, Google applications and a partnership with Lognet, an Israeli billing and commissioning system provider.
"The acquisition and provisioning system was our first big project that paid off, and last year enabled us to take on 40% of the market at peak and know we can handle more with this tool," Wilkins explains.
Having simplified the technology platforms in use, the CIO went on to refocus his team, so that it was optimised to support the fast-burning growth of First Utility around three key areas: Align, Build and Run. The Align team looks after the data and architecture, designing the platforms and providing the organisation with the insights it needs, while a software team build solutions and the Run team optimises the costs as the business grows. Wilkins has recruited four data scientists to ensure his department doesn't just capture information, but is able to inform the organisation what that data is telling First Utility.
"We built a competitiveness dashboard that analyses tariff positions of all market participants over time. This allows us to identify regional opportunities on the consumer and purchasing side, make forward predictions based on weather forecasts, and see the effect of daylight savings time on our customers use of energy. A churn dashboard helps us identify which customers are leaving, from what tariffs and to which other suppliers – we can use this to learn and optimise," Wilkins explains.
"It is fascinating what you can find out, and our data is getting bigger and richer all the time. We can aggregate the data from bills and surveys for greater information," he says.
Changing customer behaviour
"People now spend 10 minutes per year looking at their energy usage, up from seven minutes a year," Wilkins says of the increasingly data driven behaviour consumers have. With the share not own economy, rising numbers of voters for the Green Party and the rapid growth of alternative travel services such as Hailo and Uber over car ownership, it is no surprise that Wilkins and First Utility are pleased at a three-minute increase over 12 months. The energy sector, like retail, media, transport and communications, is facing a major disruption caused by changing consumer behaviour and its access to technology and information.
Back in 2013, Wilkins told this title that providing data and ways of looking at data was the way First Utility planned to differentiate itself in the market and that strategy seems to be igniting.
"We collect the data from the customer's meter and push that into our analytics engine, which segments consumers into cohort groups. These are anonymous groups, which share common attributes and therefore allow a fair comparison of consumption. This means we can engage with consumers about their energy usage.
"These technologies drive a higher engagement by the consumer in energy and the way they consume. Customers on the programme are more likely to submit meter readings, get accurate bills, be aware of their consumption and work to reduce the amount of energy they use and their bills.
"During a customer's enrolment, we take their consumption data, information on their type of property, as well as weather data, and use it to model their consumption. All customers are in cohort groups and receive an annual analysis of their performance in that cohort. For example, I am in the high user category, as I have four kids, all of whom have PCs. I am using 67% more power than the average user, but it is coming down and that insight is useful for me as I never had it before," he told CIO UK.
"Energy is one of the largest bills in a household, yet 40% of households have never switched. In the past year, technology has played a role in improving the engagement and we believe it can do that, then we will win as a business."
Since 2013, First Utility has built its new My Energy customer analytics dashboard. The programme for the dashboard was not meeting the requirements of Wilkins, First Utility and its customers, so the CIO brought the project in-house and, as the CIO demonstrated, customers have access to a slide rule application that is heavy on visualisation, but quickly illuminates to the customer their energy usage.
"All our customers are automatically enrolled into My Energy and can see dashboards of how their usage compares to similar types of household.
"When we started the project, we thought hard about the visualisation so we put a lot of time putting the information into graphics. For example no one understands kilowatt hours, instead we have things like a standby calculator that can tell you that turning your Wi-Fi router off when not in use can save £20 a year. So the language you use is very important." The result, Wilkins says, is increased engagement by their customers and then the organisation can "try and leverage" that engagement.
A part of that increased engagement could be down to an increasing access by mobile device, which Wilkins says is double that of PC access.
"We can do more with mobile as we can push a message to a customer. Wilkins already works from the premise of mobile first."
"One of our engineers decided you could use artificial intelligence (AI) and natural language programming (NLP) to answer customer's questions, ultimately serving customers directly on web chat and Twitter. The result is 'Ask First', First Utility's AI brain, which answers customer questions about energy and their account at the energy retailer."
Wilkins says this feed uses natural language programming to mimic and respond to customer queries with information and links. A question raised on the Twitter account raises a Salesforce case, so that the customer is instantly told they will get a response.
"If Ask First doesn't have the answer, it can classify it and send that back into Salesforce and route it to a customer service agent, who has the skills to respond. It has removed 50% of our inbound email and improved response times to our customers," Wilkins says of how the natural language programming can trigger actions across the organisation and its technology. "A call to our contact centre costs close to £10. If we can reduce that cost, we can invest that in further reducing process and there are so many other opportunities for Ask First, it has a rich road map in front of it," he adds.
Despite the impact of technology, the rapid growth of First Utility means the organisation has increased its customer service business by about 500 team members. "It's a necessary, but large cost. Using Salesforce means we can scale up easily," he says of the benefits of a software-as-a-service application.
Switch and be smart
First Utility is backing the Mydata initiative that should enable consumers to switch energy provider more easily. The Mydata concept was introduced by Liberal Democrat coalition minister Ed Davey in 2011, however it has stalled.
Mydata may have stalled in political circles for whatever reason, but Wilkins says First Utility has pushed on with developing a restful API that ensures access to the information is easy.
"This is all about the engagement, so it is that bit easier to switch. If we improve the engagement we win, the losses are smaller in number. We have even put together an open source asset to get everyone to support this initiative," he reveals.
Smart home devices have captured the public's imagination in the past two years, especially following the major investment into Nest by Google and British Gas launched Hive. As a pioneer of smart meters, First Utility has responded to the demand for these devices and offers its customers Cosy, a Nest like device, following a trial of 5,000 units. As you'd expect, First Utility used its data to ensure the trial sample had the right types of customers to ensure it got the best insight possible from the trial.
"We have also done a study of the business economics to ensure that we have the right way of funding this and we looked at three or four funding options," Wilkins explains. As a result First Utility, at the time of writing, has an option of a free Cosy device if customers select its fixed rate tariff. "You have to work out a way of funding it for you and for the customer.
"We can take the data from the Cosy device, map that to our home energy survey, temperature data and occupational data," the CIO says of some of the insights it can share with customers. For consumers unsure of whether to go for a Cosy- or Nest-style device, or opt for the smart meters that many energy providers are offering, Wilkins says smart meters are better for returning a saving to the customer.
"The smart meter is also better for the industry to manage its operational abilities, which means there is less friction with the customer and it is easier for the customer to identify savings," he says.
Next up for First Utility is an entry into the telecoms market, which is in many ways a return to its roots, as the organisation and its founders began their business as a telco. First Utility plans a similar over-the-top (OTT) telecoms billing and service model to its energy services in 2015.
"We can offer all the utility services as a single bill then and increasingly consumers want their relationships and services as a single bill," he says.
Uber, Hailo and Airbnb enable consumers to discover and pay for a service, these same business as enable producers or owners, whether professional drivers or property owners to sell their asset. A challenge for the energy industry over the coming years is a similar split from asset owners or product producers selling that service to the market.