“Weapons of Math Destruction,” by Cathy O’Neil: AI Company Book Club Discusses Using Data for the Common Good
When Cathy O’Neil’s book, “Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy,” lit up BlastPoint’s radar a few months ago, we decided to make it the topic for our next book discussion. Everyone at the company got their hands on a copy.
After all, the book is about algorithms—the foundational bricks that uphold the very structure of our business—and how they’re shaping society. As Ph.D., former professor, Wall Street analyst, author and Bloomberg Opinion Columnist Cathy O’Neil explains in “WMDS,” unfortunately, math is often used in nefarious ways.
“Whether or not a model works is…a matter of opinion,” she writes. “In each case, we must ask not only who designed the model but also what that person or company is trying to accomplish.” (p. 21)
Under the guise of this premise, our team has been reflecting on our collective—and sometimes personal—roles and responsibilities within the so called big data revolution. While we agree with some of O’Neil’s arguments and not with others, we’re all truly riveted by this topic. One common view continues to dominate our discussions:
We pride ourselves on being part of the solution by using data to strengthen communities.
Below are some highlights from our ongoing conversations.
Approximating Information is Sometimes the Best, and Only, Option We Have
In Chapter 4, O’Neil shares the example of how US News & World Report gathered data to create a college ranking report years ago. As a starting place, they used a “series of hunches” that included “people wondering what matters most in education, then figuring out which of those variables they could count, and finally deciding how much weight to give each of them in the formula.” (p. 52)
That may be how some models start out—as hunches—because they’re often the best, and only, options available in order to begin a framework that can later be filled in and tweaked.
In 2018, BlastPoint helped Three Rivers Youth, a Pittsburgh-based nonprofit organization, determine the best location to open a new recovery addiction center. But because of the stigma associated with drug use, and because people don’t necessarily want to share private, sensitive information about it, gathering publicly recorded overdose-related death statistics from one neighborhood versus another was one of the only “hunches” we had to go on to explore viable options. To offer a correlating framework, we looked at the number of households where grandparents were the primary caregivers of their grandchildren in targeted neighborhoods.
Was this information limited? Of course. But was it extremely useful to point us and our customer in the right direction? Absolutely. In the end, Three Rivers Youth was able to take that framework to pinpoint where the community’s needs were most dire.
Data is Discriminatory if Used Without Intentional Safeguards
Hiring practices around the world rely heavily on automated personality tests to weed out candidates, yet they don’t necessarily reveal a potential employee’s ability to perform the actual work specified (p. 108).
While many tests illuminate what it might be like to work with a person, should they be hired, some personality assessments actually discriminate unintentionally. Why? Because they’re designed using proxies (e.g., ranking prestigious colleges that candidates list on their résumés higher than others, p. 119) which, the author says, are inexact and often unfair (p. 108). We don’t necessarily disagree.
For example, the way in which questions are worded can lead to biased results, based on how a candidate answers. O’Neil cites a Wall Street Journal article wherein industrial psychologist Tomas Chamorro-Premuzic was asked to evaluate statements that job candidates had to rate themselves on, such as these, asked in a McDonald’s questionnaire: “It is difficult to be cheerful when there are many problems to take care of,” and “Sometimes, I need a push to get started on my work.”
Chamorro-Premuzic explained that the first question would point to “individual differences in neuroticism and conscientiousness,” while the second would reveal “low ambition and drive” (p. 110).
A similar case arose with a screening tool that CVS Pharmacy was using (p. 109), designed by an outside vendor, several years ago, in which the ACLU claimed it “could have the effect of discriminating against applicants with certain mental impairments or disorders, and go beyond merely measuring general personality traits” (Source: ACLU of Rhode Island).
Made aware of the adverse “filtering” effects these kinds of hiring practices create, the Xerox company took data about employee retention and made the decision to intentionally build anti-discrimination safeguards into its predictive churn model, a tool that can help determine employee longevity.
They noticed that employees who had long commutes were more likely to leave the company sooner than those who had shorter commutes (p. 119). Where those long-range-commuters lived became relevant: Xerox realized these employees were coming from poor neighborhoods.
And because Xerox does want to discriminate “on the basis of race, color, religious belief, sex, age, national origin, citizenship status, marital status, union status, sexual orientation or gender identity” (source: Xerox.com), or, presumably, socioeconomics, it removed “commute time” from its churn model, so as not to exclude people who happen to live in poor neighborhoods from fairly applying for job openings.
We think this kind of intentional decision-making allows data to be used for good, especially when companies are able to illuminate information that was previously hidden. Used conscientiously, data can provide more insight into the bigger picture, allowing us to see an issue from a wider vantage point and therefore make us better able to appreciate nuance.
“Color Blind” Data Can Still Lead to Bias
O’Neil’s book takes a disturbing look at racial bias with respect to technology across sectors, throughout history and in the present day. Discrimination’s legacy lives on where data is used as a WMD: in the justice system (p. 25), in education, (p. 69) and in many other realms.
We know that race discrimination, as well as age, gender, religious, physical ability, socioeconomic, language and other kinds of discrimination permeate everyday life, some of it driven by technology. Even when our datasets or formulas don’t include race as a factor, bias creeps in anyway, based on everything else that surrounds them.
Take the now-infamous automatic soap dispenser that didn’t recognize dark skin tones and therefore didn’t eject soap. It turned out that the light-sensitive device was designed by a homogenous team of engineers that lacked any designers of color, and the product was never tested on a person whose skin tone differed from theirs.
That’s why we here at BlastPoint prioritize diversity. We’ve built hiring practices that work to combat gender, class and cultural bias.When great minds from different backgrounds come together, unique perspectives flourish, new ideas and fresh solutions thrive, and bias can be overcome.
We believe that sharing where-I’m-coming from with where-you’re-coming-from can only strengthen models. It’s what creates better access and brings transparency, whether we’re designing a software tool or planning a marketing campaign or helping a customer choose where to open a new store.
We’re committed to strengthening our community in the work that we do by making our platform more accessible to organizations that will use it for the common good. If you’d like to read more about that, check out this spotlight interview by Jamillia Kamara of the Forbes Funds covering BlastPoint’s 2017 UpPrize nomination.
We make decisions intentionally, working hard each day to safeguard our tools so that bias does not creep in. And we’re steadfast in putting our algorithms to work for humanity; not against it.
The BlastPoint team has finally recovered from a whirlwind—and we mean that in the best possible sense—trip to Phoenix for the CSWeek Conference in April.
If you’re not familiar with this annual utilities industry extravaganza, “CS” is short for Customer Service, and “Week” refers to the entire week-long experience being dedicated to supporting those good folks who answer the phones when your local water main breaks or your electricity goes out in a storm.
It was our first time taking part in this conference, and we’re so glad we did. We already know that BlastPoint’s platform is making a visible difference for natural gas companies—cutting costs by enrolling more customers in e-billing, for example, and saving trees by sending fewer pieces of snail mail.
But we were eager to meet other players in the energy space to share how our software solutions could help them, too. For instance, location analytics and predictive behavioral tools to help them better understand their customers and, thus, make more-informed, community-minded business decisions.
With thousands in attendance at CSWeek, and too many networking opportunities to count, we met loads of great people who shared our enthusiasm for exploring this idea of customer engagement through data—not as a tool for privacy intrusion, but as one that allows for the use of new avenues for communication where old ones no longer work.
And yet, despite our excitement to share the dazzling whiz-bang of our software tools, what really stole the show were the adorable, tiny, plastic light-up people we had laser-cut by Ponoco for our trade show booth. In our pop-up living room at the exhibitor hall, our colorful, tiny people sat before darling miniature houses and storefronts that adorned the incredible backdrop that artist Sarah of Sarahwilldesign.com helped us create.
We’re still not sure who was more excited about those mini lightup people: us, or the hundreds of customer service reps we chatted with over the course of the week.
But those lightup people, who now bring us joy on a daily basis by living permanently on a shelf in our office, aren’t just eye candy. They represent one of our most important company goals: Creating equity for the wide range of real humans living inside real houses, who embody a diverse range of real human desires, values and experiences.
It may seem to some that our business boils down, simply, to math—or, actually, really complex algorithms, if we may be slightly more precise. But in truth, we see our business as not just a mission, but a responsibility, to figure out who needs help, why they need it, what they need, and where they are located so that help can reach them.
With this information in hand, then, public utility companies have the power to adjust the way they deliver services, messages, and programs in order to adequately serve their customers.
Which was a theme we heard over and over at CSWeek, and it took fascinating different forms.
Utilities are embracing technology like never before, and with software solutions like ours alongside a variety of user interfaces to choose from, they’re making major strides in boosting customer engagement and increasing satisfaction.
How? By diversifying the communication methods they use to reach customers.
Tacoma Power is experimenting with video chat inspections to help clients who are experiencing service problems. Remote yet face-to-face, technicians can inspect heat pumps or evaluate insulation over video, thereby reducing travel costs and fuel consumption. This minimizes their carbon footprint and solves more customer problems at breakneck speed, as compared to doing business the old way. Using video technology, companies can expect higher, faster payment rates and better overall customer engagement.
Others public utilities like Direct Energy are using voice activation technology to leverage the interconnected nature of today’s modern homes. Customers with voice-controlled devices like the Amazon Echo and Google Home can quickly receive and send hazard notifications, or learn about power outages or water main breaks in an instant. They can pay their bills automatically through these devices or get more in touch with their energy usage, as long as the software infrastructure is in place to support that kind of information on the utility company’s side.
SRP (Salt River Project Power and Water) in Arizona has long been successfully texting its customers to spread the word about severe weather and power outages. But more recently, they’ve seen an uptick in engagement and satisfaction using text to let customers know that a bill is due soon, when a payment is past due, by accepting text payment and sending confirmation when a payment has posted successfully. What’s more, they’re using text to send smart energy alerts to let customers know how much power they’re using, which could save lives if, say, a space heater were left on accidentally. This is a huge safety and cost benefit for both customers and utilities.
The City of Ocala Electric Utility in Florida is focusing heavily on whole-community access to energy, especially for those without access to modern technology. By installing digital payment kiosks at public spaces like libraries and malls, they’re making it easier for those without smart phones or voice detection devices to pay bills on time, postage- and hassle-free. This prevents billing defaults and creates equity for those customers who may be at risk of defaulting.
New and exciting ways to communicate with and serve consumers continue to develop as technology makes more methods easier to use. We look forward to sharing more—and more meaningful—customer insights with public utility companies so that more of their customers have equal access to all the services they need.
Highlights from our Webinar with Franchise Expert Chris Cynkar
In a world where people like to pit Millennials against Baby Boomers in some kind of generational showdown, franchise expert and industry consultant Chris Cynkar prefers to point out one very important commonality between the two groups:
Boomers and Millennials are both driving new and transformational trends in the franchise industry. They’re just going about it in very different ways.
We chatted with Chris during a recent webinar to find out how this phenomenon is manifesting and how franchises are responding. If you missed it, here’s a link to the webinar replay, [JE1] but we thought we’d jot down the highlights for you here so you have them at-a-glance. Because, truly, they’re fascinating revelations. But more importantly, they’re essential to understand if you want to serve these disparate generations (and maybe even a few of us who fall in between), because they’re driving massive change across markets.
According to Chris, Boomers are a group that’s currently 74 million strong, and they’re the first generation of people who aren’t beholden, as they age, to transition to nursing care, assisted living, or a family member’s home.
Why? They don’t want to. They’d prefer to stay in their homes. And these days, they can do that, because the healthcare industry has responded to their desire. That response is being guided most prominently by franchises, where savvy entrepreneurs who are paying attention have developed successful, replicable business models to fulfill a growing need for comfortable, independent-focused senior services.
Companion care companies, visiting nurses, and in-home service provider businesses have exploded over the past several years, allowing Boomers to live independently and on their own terms. In-home monitors and ‘smart’ devices have gained traction and technology has become much more sophisticated in recent years.
Instead of large, wired necklaces, nowadays, digital health wearables are light, discreet and fashionable. Seniors are downloading smartphone apps that send automatic reminders to take their prescriptions. They can send weight and blood pressure measurements electronically to healthcare providers with in-home equipment. And specialized systems can detect movements, notifying emergency contacts when there’s been a possible fall or irregular heartbeat.
Moreover, modern conveniences and consumer demand are driving ability-appropriate home design. Businesses that install wheelchair ramps, remodel closets so everything is within reach without a step ladder, or build slide-out drawer systems that seniors can access without excessive bending are flourishing in today’s market. As the thirst for convenience only gets stronger, the outlook for continued growth in these areas looks positive.
On the other end of the spectrum, Millennials, 73 million strong today, are at the height of their careers, so their collective, economic impact can’t be ignored. More than any generation before them, Millennials value wellness, convenience, and experience. In response, franchises that cater to these niches are seeing incredible success.
Personalized fitness classes, focused on a specific activity like spin, rowing, or Pilates, are enjoying rapid growth. Millennials gravitate to these ‘boutique’ wellness experiences for their specialization and personal touch. Building rapport over time with a consistent instructor alongside a tight-knit peer group gives 30-something consumers the sense that they have their own fitness-focused cheering team. And team collaboration that builds community is something this generation prioritizes more than previous generations who continue to value more do-it-yourself oriented activities.
In similar fashion, Millennials are driving change in the workplace, too. Franchises have responded by providing collaborative co-working spaces that encourage communal information exchange, regardless of the industry in which the people there are working. Today’s shared office spaces come equipped with technology tools that allow for remote access so that visiting workers can plug into what’s going on at HQ no matter where they are. As Millennials advance to leadership roles, Chris Cynkar believes we’ll be seeing more and more of these decentralized workplaces.
Franchise businesses that provide convenience services, too, are seeing rapid growth due to Millennials’ demand. This generation seems more willing than their predecessors to trade money for time, so they’re paying service providers to take care of things like laundry and dry cleaning pickup and delivery, light home remodeling, and pet care more frequently.
This trend toward outsourcing chores extends to the final demographic Chris talked about, and that’s dual-income households—of any age.
Franchise businesses that cater to busy professionals’ desire for fast, easy solutions to domestic responsibilities are experiencing widespread success. From paying for lawn care to house cleaning to nannies and tutors, workers who are putting in 40+ hours per week at the office are far more open to hiring experts to take care of their homes so that, come Sunday, they can sit back, relax, and enjoy quality time with their families.
To catch the whole webinar, take a listen here! And to make sure you’re in the loop for our next webinar, sign up for BlastCast! Your source for emerging franchise news and trends, delivered straight to your inbox, twice every month.
BlastPoint’s interactive software empowers utility companies to find, engage & support energy-insecure customers—before they miss a payment.
Nearly a third of Americans struggle to pay their monthly utility bills, according to a 2018 report by the American Energy Information Administration (EIA). One in five households skip grocery shopping—a phenomenon the National Institutes of Health call the “heat or eat” dilemma—or go without essential medicines just so they can pay an energy bill.
Energy insecurity, defined by NIH researcher Diana Hernández as the “inability to adequately meet basic household energy needs,” is a major problem around the globe, and it could increase as more catastrophic weather events occur that cause severe cold and heat snaps, requiring more energy-intensive and costly heating or cooling in homes.
Consumers who are vulnerable to energy insecurity to begin with are also, unfortunately, vulnerable to missing utility bill payments, especially during extreme temperatures. Many energy providers assess late fees or restore-service penalties, increasing the amount due. That’s when a snowball effect takes shape, and those at-risk customers who were behind 30 days are now more likely to fall behind 60 or 90 days, because their balances are that much greater. Defaults happen, payments are taken over by collection agencies, communication breaks down, and the snowball effect only worsens for those at-risk customers.
For utility companies, that can mean lost revenue, steep expenditures on call centers and personnel costs for employees who are tasked with attempting to contact defaulting customers to recoup the money owed.
According to Power Engineering International, “Many suppliers have built bad debt charges and provisions for write-off into operating overheads; in the case of some major companies, outstanding debt levels are as high as annual profits, highlighting the magnitude of the opportunity lost by utilities unable to manage debt levels effectively.”
To leverage that lost opportunity, utility companies can get proactive early on in the customer journey by identifying at-risk consumers before they fall behind on a payment. How?
Through smart solutions like BlastPoint. Predictive behavior algorithms and location analytics like ours guide utility companies to get in front of billing defaults long before they happen.
Here are some of the ways utilities are using AI like BlastPoint to recoup lost revenue and drive social responsibility in their coverage areas:
- Identify vulnerable consumers who are at high risk of default at the household level
- Engage and reach those customers through the right channels to keep communication open and positive
- Enroll them in budget billing to ensure their payment amounts are consistent and manageable
- Connect them with federal funding assistance programs like LIHEAP and CAP, preventatively
- Prove geographic need to designate more federal assistance funds to customers ahead of the competition
- Decrease negative health & social impacts that accompany energy insecurity
- Eliminate the “heat-or-eat” dilemma
- Improve overall customer satisfaction
- Diminish call center costs
Building a proactive strategy that optimizes the benefits of AI, utilities can partner with companies like ours to stay ahead of the competition. Ensure that your energy-insecure customers receive the services and payment plans they need to meet their obligations, and watch your business grow.
For a free demo that explains how BlastPoint can help you cut back on customer billing defaults, fill out this short request form and we’ll be in touch right away!
Welcome to BlastPoint’s IFA 2019 Roundtable Roundup – a 5-Part Series!
Startup franchises have a lot to get excited about. From groundbreaking healthcare and fitness services to alternative child enrichment programs to modernized pet care facilities, emerging franchise brands are testing long-established boundaries, changing the way people think about products and services across all aspects of their everyday lives, and generating revenue that’s far exceeding projections.
But on BlastPoint’s recent trip to Las Vegas for the International Franchise Association’s annual convention, we huddled with national and international experts to make sure we have a crystal-clear picture of what, exactly, our franchise customers are grappling within today’s market.
We’re happy to announce there’s good news. Tamra Kennedy, multi-unit franchise owner of Taco John’s, explains: “I expect that we will see more emerging franchisors in 2019 than ever before. With footsteps to follow and access to capital, startups should surge.”
But we also picked up a few friendly words of warning from the experts about what franchisors can expect in the year to come. Because the labor market is generally strong across the U.S., recruiting and retaining qualified talent will persist as critical hurdles. Keeping pace with technology, automating services that used to be delivered by humans, and adjusting to regulatory shifts such as tariffs and rising minimum wage costs will also remain at the forefront of franchisor concerns.
Lucky for emerging brands, like most startup entrepreneurs worth their salt, they’re inherently intuitive, responsive, nimble, and able to pivot swiftly when it comes to shifting consumer trends. And because startup franchises aren’t bogged down by traditional business philosophies, they come to the table willing to think outside the box.
Nevertheless, or perhaps because of their nontraditional approach, a lot of critical questions arose at our IFA Roundtable discussions in Vegas around what to do to boost early sales, which made for some good-natured yet fiery debate.
We homed in on the top five questions emerging franchisors were asking, and being asked, at the convention, and took a deep dive into these big issues to get solid answers. We think this roundup will serve as a guide to help our emerging franchise partners, and others, along the track to success.
Behold: The Top 5 Questions Emerging Franchisors Should be Asking Themselves (If They Want to Boost Sales!):
- Is My Non-Consumer Website Crushing It?
- Am I Making the Most of Customer Referrals?
- Am I Using Item 19 to its Fullest Advantage?
- Am I Adequately Investing in PR?
- Does My Brand Exude a Personal Touch that will Convert Prospects into Sales?
Ready for the answers? Let’s get started!
At BlastPoint, we believe that amazing things happen when smart people get together in a room and share their ideas. That’s how the best inventions are born, after all, and that’s why we’re pleased as punch to announce that we’ve joined forces with the Smart Energy Consumer Collaborative (SECC) and the Smart Energy Power Alliance (SEPA)—smart people sharing smart ideas for a brighter future.
As new members of these progressive organizations that are leading the charge to modernize power, we look forward to collaborating with global leaders and driving technology to meet the energy needs of consumers across the country.
We’re especially honored—and very excited—for the opportunity to roll up our sleeves and get to work on SECC’s research committee on customer analytics, because bringing data about people and places to life is what the BlastPoint team does best.
We’ll keep you posted as this groundbreaking work progresses!
SECC is a 501(c)(3) nonprofit organization that works to learn the wants and needs of energy consumers in North America, encourages the collaborative sharing of best practices in consumer engagement among industry stakeholders, and educates the public about the benefits of smart energy and energy technology.
The Smart Electric Power Alliance (SEPA) is a non-profit organization dedicated to working with electric power stakeholders through the most pressing issues affecting the growth and utilization of smart energy.
The International Franchise Association’s 2019 Conference in Las Vegas (Feb. 24-27) delivered four invigorating days of education, motivation, and celebration. We flew out of Pittsburgh on a Saturday, eager to reconnect with our franchise partners from around the country who’ve been putting data analytics to work using BlastPoint’s site selection and employee lead generation tools, among others.
Amidst all the networking, inspirational keynotes, expert-led roundtables, and much-needed sunshine, we were floored to hear the many ways franchisors are leveraging technology to shape everything from financial reporting to customer service to employee training.
The consumer landscape is changing—and fast. A new generation of potential customers longs for instantaneous convenience when it comes to exploring and purchasing products and services. In order for franchise businesses to stay revenue-positive over the next five to ten years, they have no choice but to evolve with these consumer demands.
How will they do it? By embracing tech. Below are the Top Tech Trends we took away from IFA 2019:
Utilize Data or Get Left Behind
According to David Long, CEO of Orangetheory Fitness, who spoke on Sunday during the Emerging Franchisor Bootcamp, one of the most important things emerging franchises need to do to be successful is to use data to make decisions like:
- Where should I locate my next store?
- How big should it be?
- Where will I find qualified employees to support my business?
- What kind of person is my target customer?
David Long should know. Orangetheory saw explosive growth since its 2010 launch. Beyond the wireless, wearable heart monitor devices that members use to get real-time data about their workouts, Orangetheory uses a Business Intelligence (BI) portal that delivers instantaneous reports about customer usage and attendance. This means employees can reach out to someone who hasn’t shown up for class in a while, find out why, and address their needs head-on. One-on-one relationships between franchisees and their customers—made possible because of data—remain strong, so customer retention rates remain high and profits continue to rise.
With companies like BlastPoint that aggregate big data in this way, franchisors are building business infrastructures that are guaranteed to work reliably and smoothly for their franchisees, long before build-out is even considered.
Let Artificial Intelligence Do The Heavy Lifting
“AI is revolutionizing franchising,” says Domino’s SVP and Chief Digital Officer, Dennis Maloney, who shifted his thinking about the pizza company several years ago. Now Domino’s considers itself an e-commerce company that delivers an experience, not just a pizza.
Guided by the brand’s new image, Domino’s has enjoyed widespread success leveraging artificial intelligence to make features like their zero-click ordering app and hotspot delivery service available to improve that customer experience.
Chatbot technology, ever improving, has enhanced a variety of consumer transaction platforms, making voice-automated interaction quick and convenient. Food ordering, delivery trackers, automatic payments, targeted email marketing, data storage and even data security are being automated by AI and predictive analytics, creating personalized, relevant transactions consumers find useful. Autonomous vehicle delivery is being tested in certain markets, and it’s sure to find its way into the mainstream in the next few years.
Augmented Reality & Gamification Will Strengthen the Workforce
If you’ve ever tested out a new hairstyle using a selfie and an iPhone app before actually going to the salon to get the cut, you’ve interacted with AR. Facial recognition technology is being used by companies such as L’oréal to let customers try on makeup virtually. Sherwin Williams Color Tools let users try paint colors digitally, too, before buying, based off of photos of their homes.
But, explains Amar Dhaliwal, Chief Operating Officer of Atheer, enterprises that span the automotive, utility, manufacturing and even insurance industries are piloting AR technologies to improve employee effectiveness and, thereby, consumer safety.
Embracing AR is expected to help franchisors create interactive training videos for new franchisees and front-line employees, giving them real-life scenarios they can learn to solve—safely and efficienty—in real-time, which will no doubt spill over into improving customer convenience.
Training programs inspired by video games, says Sam Caucci, Founder & CEO, 1HUDDLE, will keep Millennials and Gen Z employees “fired up” about coming to work, because they’ll think creatively about their jobs “through the lens of a game.”
1HUDDLE is turning onboarding from paper-heavy studying manuals to 10-level interactive games, inspiring new hires to reach the next level, compete with others, and conquer goals. As any business leader knows, engaged employees drive higher profits.
“What all this technology allows franchisors of all sizes to achieve,” says Rogelio Martinez, CFE, CEO of Fast Cloud Consulting on IFA.org, “is the ability to manage global operations from anywhere, around the clock.”
We look forward to guiding our franchise partners as they decide which tools to use on their journeys through this exciting technology revolution.
We at BlastPoint are still buzzing after an awe-inspiring week in New Orleans at the energy industry’s leading annual conference, DistribuTECH 2019.
Because we’re an analytics company that’s committed to making big data available to everyone, we’re proud to serve the power sector in a unique way—helping utilities provide better customer service using fresh, instant insights. And yet, we know there’s always more to learn.
Since we continuously strive to deepen our understanding of the energy industry in order to meet our clients’ needs, we knew DistribuTECH would be the place to go. From the moment we touched down on Louisiana soil, we dove headlong into All Things Energy, learning everything we could from the biggest influencers in the industry while sharing what we know about leveraging data to benefit the greater good.
Keynotes and workshops on everything from microgrids and clean energy to cybersecurity and vegetation management dazzled us all four days (Feb. 4-7). Networking opportunities with representatives of the biggest electric, gas and telecomm companies took place over every delicious meal in the vast, sunlit halls of the Ernest N. Morial Convention Center.
We spent time in the Knowledge Hubs — specialized zones dedicated to in-depth exploration of niche power grid issues, and explored the Initiate! floor, which showcased new energy startups and student innovation. There were offsite field trips to solar farms and over 500 exhibitors offering more leading-edge products and services than we could possibly digest.
Over the course of our visit, we made connections that opened up opportunities, like an exciting partnership with our new friends at SECC, the Smart Energy Consumer Collaborative, with whom we’ll participate in a research program studying customer segmentation later this year.
We’re invigorated by the people we met and the projects we’ll be tackling. But we also took away valuable lessons about the utility sector that will shape the way we think about our business and how we connect with our customers going forward.
Below are the five greatest lessons we learned at DistribuTECH 2019:
1. Establishing and maintaining customer trust continues to top utility companies’ list of priorities.
Every energy provider wants to leverage the powerful benefits of data. Many are already using it to enhance the customer experience and optimize service delivery. But as our society throttles ever more deeply into the global information revolution, we all must reckon with one, unavoidable reality: critical, and often personal, pieces of data about customers are already circulating in the ether.
That data is available to companies to use to their advantage, but it’s up to those companies to guard and protect people’s private information. If they don’t do so responsibly, they’ll lose customer trust. At BlastPoint, we believe the key to maintaining customer trust will be through responsible information stewardship, and we can help companies establish protocols to achieve that.
2. Analytics is the underlying force driving operational & financial outcomes.
Utility companies are seeing incredible growth opportunities open up—and they’re experiencing quantifiable results—when they utilize data to make strategic and budgetary decisions.
But there is so much data being generated. Overwhelm and confusion seem to set in at the point where companies try to figure out what to do with it all. Which means that analytics support teams like ours at BlastPoint are fulfilling a growing need. The more data that’s available, the more companies will want to access it; and the more companies access it, the more they will need to organize and understand it.
3. Analytics make it possible for companies to understand their customers—and therefore their industry—as dynamic and continuously evolving.
People’s lives are constantly changing, which means the customer journey is constantly changing. Utility providers can aim to regularly augment their data in order to keep up with those ever-developing customer stories. That will allow them to, more easily and effectively, meet shifting industry and public demands. For those of us in the data aggregation business, that means we have a responsibility to our utility partners to foster long-term relationships that are built on trust.
4. There is a huge potential for utilities to grow their product and service offerings.
Energy efficiency, demand response and customer convenience are easier to improve upon and spread to new customers when companies use data analytics strategically. Targeted marketing through customer segmentation is one-way proper data usage makes that possible. Responsive engagement is another.
But the sky is truly the limit; once utilities see the value in analytics, they understand its potential. As the market shifts, companies can generate new ways of using data to keep up with developing trends.
5. Bad data is just a fact of life. That doesn’t mean you have to live with it.
Utility companies often possess quite a bit of data. Unfortunately, they apply it narrowly and in specific situations. Take the road crews who fix power outages at specific street corners, for example. Perhaps companies don’t realize they could use the same geographic data across departments (for Marketing and Sales, e.g.) to enrich the level of personal service they could be offering.
Utilities recognize the disconnect between operations data and marketing teams. What they haven’t taken advantage of yet is the power they wield that would allow them to fine-tune and augment the data they already have—even if it’s messy, and even if there are glaring gaps in the information. They can update and organize it using sophisticated analytics culled from various public sources, through the support and guidance of companies like ours. And when they do, new possibilities for projects and new sources of revenue reveal themselves.
We exist to position utilities so they can quickly embrace and respond to these new opportunities as soon as they arise. And we’re excited to be a part of this moment in history as the zeitgeist in the energy industry takes hold, guiding utility teams as they converge with data analytics.
We look forward to deepening the connections we made at DTECH, collaborating with new friends from around the globe, and putting the lessons we learned to work over the course of the coming year.
Carbon emissions, energy efficiency and grid reliability are just a few of the major issues facing the energy industry today. What’s more puzzling and challenging for utility providers, however, are the elusive, human customers lurking behind them all.
Humans can be a finicky bunch.
Gauging what utility customers think about power resources, anticipating the actions they will—or won’t—take in response to those attitudes, predicting the best way to interact with them meaningfully, and keeping customers satisfied, and therefore loyal, continue to persist among the top challenges facing energy providers today.
As advancements in technology make alternative power sources more widely available, competition demands that utility companies adjust by developing fail-proof customer satisfaction strategies. As business author and management guru Michael LeBoeuf famously says, “A satisfied customer is the best business strategy of all.”
But with the homeowners and business leaders of today more tech savvy than any previous generation, and with more choices available to them than ever before, getting—and keeping—their attention requires precise messaging with guaranteed delivery.
So, how can utility companies reach and engage their customers to keep them satisfied and loyal? As every marketer knows, the journey begins with knowing your audience.
Unfortunately, power companies often know very little about the people they serve, and that limits their ability to interact meaningfully with them. For too many customers, communicating with their utility company comes only when there’s a problem with their service or a complaint to be lodged.
Power companies should engage first, and positively. But how? Certainly, getting the word out about a power outage, boil notice or service interruption is commonplace, and utilities have no problem alerting the public through radio and TV announcements when these emergency issues arise.
But informing customers about service upgrades, insurance programs, power-savings plans, or available rebates remains somewhat elusive. Yet it’s these kinds of supplemental programs and services, which fall outside of the regulated rates utilities are allowed to charge by law, that allow them to grow revenue.
To spread the word about profit-increasing programs, sales and marketing teams could and should design beautiful web pages with snappy headlines and great graphics that outline all the benefits of special programs. But it’s difficult to get customers to spend any time perusing those pages, regardless of their content.
“Even for traditional energy-efficiency programs that have been around for decades,” says K.C. Boyce of Marketstrategies.com, “fewer than two-thirds (61%) of customers say they’re aware of their utility’s offerings.”
It’s no wonder. According to Greentechmedia.com, the average person spends as little as eight minutes per year interacting with their utility company’s website. People want to pay their bills and get on with their lives.
Utility marketers know this, but they’re often forced to resort to snail-mail inserts that get sent out with monthly bills to reach their customers. It’s a one-size-fits-all solution, akin to shooting arrows into the dark, that’s both expensive and unreliable.
Unless, of course, companies know who, exactly, they’re targeting. Yet energy providers typically have access to very limited customer information, like names, addresses and usage data.
What’s actually available, however, with the help of data companies that use analytics and digital assets, is so much more. Data that’s powered by geographic insights, culled from Census information and rich online histories, now make it possible for utility companies to learn more than they ever thought possible about the people they serve.
BlastPoint’s user-friendly platform reveals real-time insights that give utility companies “A-ha moments” about their customers and their not-yet customers, making it clear how best to reach them. Using heat maps, scoring algorithms, segmentation, ranking and filtering techniques, the shroud of secrecy between companies and customers has finally been lifted.
Armed with this new information, utility companies are determining which type of customer will respond better to a Facebook ad versus direct mail. They’re targeting environmentally-conscious customers with green messaging, and budget-conscious customers with cost-savings messaging.
“In the near future,” writes Jeff Hamel, Director of Global Energy and Enterprise Partnerships at Google, on Utilitydive.com, “utilities will be able to provide a richer, more personalized energy management experience to consumers—from alerts about storms and outages to reminders to pay a bill and easy ways to further save energy—to offer a more holistic view of home energy use. This is the level of transparency and engagement consumers are craving.”
Energy providers and their marketing teams don’t need to wait for the future. The ability to understand more about their customers already exists. The time to start building tactical strategies that reach them effectively, keep them engaged and prompt them to adopt revenue-building products and services is now.
We’re escaping the Polar Vortex in Pittsburgh! Can’t wait to time travel to spring in NOLA for DistribuTECH 2019!
DistribuTECH is the utility industry’s leading smart grid conference and exposition, covering automation and control systems, energy efficiency, demand response, renewable energy integration, advanced metering, T&D system operation and reliability, power delivery equipment and water utility technology.The 11-track summit brings industry thought-leaders from all over the world opportunities to network, share knowledge and problem solve with worldwide utilities and product and service providers.