As utilities face mountains of new data, 73% are embarking on or planning a customer analytics project, according to Utility Analytics Institute. In fact, the utility customer analytics market is predicted to grow by 32% per year — nearly quadrupling from $180.4 million to $718.9 million — between 2011 and 2016, according to the Institute's 2012 Annual Customer Analytics Report.
"Utilities are leveraging growing analytics opportunities for improved customer engagement and operations," says Mike Smith, vice president, Utility Analytics Institute. "Most customer analytics projects are focused on meter data analytics and energy efficiency, but many other efforts are also underway."
Meter data and energy efficiency: Among utility customer analytics projects, approximately 40% are focused primarily on meter data analytics, and 27% are focused primarily on energy efficiency.
"In addition to meter data and efficiency, we found every customer analytics segment to be of above-average importance to utilities," Smith says. "Projects range from traditional analytics needs for meter-to-cash processes, to newer efforts that measure public sentiment. As the market expands, so will project diversity."
Continued growth: Customer analytics spending will grow over the next one to two years for 84% of utilities, and 69% expect growth over the next three to five years. Among utility customer analytics projects, 26% are worth over $2 million.
The people side of analytics: Research reveals at least one major hurdle — the utility challenge to recruit and develop a skilled analytics workforce. Smith adds, "Successful utilities will make data quality paramount, think beyond meter data, and prepare their people and organizations for customer analytics."