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SAS Customer Intelligence increases Endesa customer retention by 100%

June 3, 2011 — 8:04am ET | By Barbara Vergetis Lundin

Using SAS Customer Intelligence analytics, Endesa's smart marketing campaigns have reduced customer acquisition costs by 50 percent. At the same time, customer retention has increased by 100 percent through the use of prioritized marketing campaigns and direct resources to customers with the greatest purchasing power and highest lifecycle value as well as the development of value-added products and services.

Utilities are challenged with improving reliability and quality of electrical power. Given forecasted growth in demand for electricity, utilities must find ways to improve network efficiency that reduces line loss and work with customers to reduce consumption during peak demand time. Though customer analytics, utilities can most effectively work with their customers to achieve this goal.

Without investing in customer analytics, a utility has very little useful information about their customers. With limited billing data such as customer address, monthly consumption and payment patterns, utilities cannot effectively design new services that curb electrical consumption, such as time of use pricing, or understand factors that may significantly impact long-term demand like the future potential for electric vehicles in their market.

"With an analytical approach to customer intelligence, a utility knows what offer to send to each customer and which customers are likely to adopt new programs," Alyssa A. Farrell, product marketing Manager, SAS Strategic and Sustainable Solutions, said in an interview.

In the past, regulated utilities tucked "marketing" under customer service; the function was primarily to ensure accurate billing and that ratepayers received notices of pending rate changes, she said.

"The billing system was the primary source of customer information. However, being transactional, it is not analytical or predictive in nature, so it cannot predict when a customer is likely to leave, or segment the consumer into tech-savvy versus cost-conscious," Farrell said. "As the marketing function evolves, utilities are adopting more traditional customer intelligence solutions that are proven in other industries such as telecommunications and banking."

In the near future, utilities may adopt social media analytics to better understand customer sentiment and identify social influencers. A better understanding of customers will impact how the utility deploys their capital from traditional generation to renewables; how they inform their customers of pending outages and estimated recovery time whether by email, text or phone; and how they improve collections of delinquent payments.

Over the next 10 years, energy demand will exceed current capacity. Utilities must work more closely with customers to curtail consumption and customer and business analytics solutions will allow them to do this. Significant opportunities in the design of programs that retain customers, reduce greenhouse gas emissions, and ensure the ability of the utility to meet long term energy demand are on the horizon.

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