Who should have "green tag" ownership under power purchase agreements, the buyers or the sellers?
A legal controversy is brewing in the electric industry...
Marketing & Competing
will set the competitive agenda. Companies that only react in competitive markets are destined to fall behind.
IBM is an example of a company with a preeminent market position that steadfastly focused marketing and product development on "key account" business in mainframe computers. In spite of an initial advantage, they lost much of their "mass account" personal computer (PC) market to competitors who knew more about PC customer needs. IBM was confident that its key accounts would continue as a primary source of revenue, and that the desire of most customers for reliable support and the quality associated with a "name" product would limit demand for ubiquitous mail-order clones. Dell's "no questions asked" return policy and one-year onsite repair warranty destroyed this advantage almost overnight. It is easy to recast this experience in terms of current utility markets.
Few utilities have developed mass account marketing strategies. Even utilities that recognize the value of marketing to mass accounts have taken few concrete steps. As a marketing manager at a New England utility admits: "We've been focusing on key accounts; we know that we need to do something about our mass accounts but we're not sure where to start or what to do."
Successful marketing in competitive industries involves identifying target markets and creating differential advantages that provide an edge over the competition. Not surprisingly, this marketing process requires a customer intelligence system. What may surprise you, however, is that most utilities already have sufficient data resources to develop customer intelligence systems.
Customer intelligence systems comprise three elements:
Customer Data. Since mass accounts often include hundreds of thousands of customers, it isn't cost-effective to develop detailed customer information for each individual customer. A much better approach is to develop information on a sample of customers as representative of the entire service area. Most customer surveys periodically conducted by utilities provide a solid basis for an initial customer intelligence system. Utility billing files, new-customer surveys, DSM audit results, and other special databases are good supplementary sources of customer data.
Energy Data. Utility customer energy data is usually available only as monthly sales derived from billing files. Monthly billing data are too aggregate to be very useful in evaluating marketing programs where the objective is to influence specific end uses such as electric space heating and water heating. End-use energy and load information are vital in developing profitability measures. A number of methods developed in utility demand-side management applications over the last decade can be used to estimate detailed customer end-use energy from customer billing, survey, and engineering data.
Access and Analysis Software. Software systems are required to convert customer data into customer intelligence. These systems should be able to answer questions that begin with phrases like "which," "how many," "what kind of," "what if," and "assume that." This access and analysis can be performed with a combination of commercially available spreadsheet, database, and statistical software packages or with software specifically designed for utility customer intelligence systems.
Rather than waiting to construct the ultimate marketing database with expensive commercially provided data, utilities need to