On the second day of Utility Week Live the Keynote conference, designed to bring ideas and experience from outside the sector to bear on utility company challenges, included a presentation from Simon Hay, chief executive of Dunnhunby – the intelligence behind Tesco Clubcard as well as a range of other global retail brands.
With no-nonsense style, the data guru delivered some incontrovertible evidence of the power of data. He showed compelling statistics about its growth in volume, in sources and in its ability to aid strategic decision making, putting organisations in positions where they can take informed action to build robust relationships with consumers on a large scale.
However, being able to exploit data relies on avoiding some common pitfalls Hay warned.
Primary among them is the urge, so many seem unable to resist, to let assumptions take on the guise of truths, when they have no foundation in data.
Quoting Mark Twain, Hay said: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
Allowing assumptions to pervade will derail attempts to build relationships with customers – particularly at scale he observed.
Key quotes from Simon Hay, CEO, Dunnhunby
“Organisations are human entities.”
“Customers never say ‘wow, what a cool algorithm’.”
“Everyone thinks technology is the answer. It’s not. It’s just a tool – a means to an end.”
“People constantly present things as fact which are not rooted in data.”
“Regulators will always be behind the technology.”
Elaborating with an example from retail, he explained how it is common for supermarkets to assume that universal promotion rules apply to all products. In fact, applying special offers to items such as pet food can create a negative impact, irritating the customer and bringing no long term benefit to sales since the promotion will not change the regular and steady amount of food they give to their animal – but it will encourage them to purchase inconvenient quantities of an often bulky product.
Further, Hay called for leaders in organisations to improve their understanding of data presentation and reporting strategies in order to be able to identify when employees are simply presenting data in a different way each time a report is made in order to create a positive message they believe leadership wants to hear.
Presenting a three step model to successful data strategy, Hay defined the need to leverage data to ensure tasks are performed with maximum efficiency. This is a moving target he clarified “What you tell people is ‘great work’ one year will be redundant the next because its efficiency can be improved by automation,” he explained.
Next, Hay said firms should be wary of traps laid by past success and that they should aim to invent a future built with “non-linear” ideas – in other works that they should embrace forces for disruption which will “break your model”.
In terms of applying data to customer experience, Hay identified three layers of data use which achieve different ends in customer service. These layers are ‘mass’, ‘differentiated’ and ‘personal’.
The former is information which can be gathered from or projected to every customer. The second is information which will inform and regional or demographic-based experience and the third which will target the individual.
Speculating about ways in which utilities might be able to use data to better effect, Hay suggested that there could be greater scope to use algorithms to summarise extensive customer data in a way which helped call centre agents supply relevant advice more quickly. Or those algorithms might be used to support automated massaging channels to deliver personalised instructions or nudges.
Some delegates pointed out that segmentation of data between generation, retailers and networks means that the data image of the consumer utilities are able to draw is more limited than industry outsiders might assume. But with up and coming customer engagement offerings from fast growing organisations like Rant & Rave and Opower rapidly increasing capability and popularity with utilities users, Hay’s aspirations may be closer to reality than industry and technology pessimists believe.