As competition in the energy industry heated up, ENTEGA wanted to gain an advantage over its rivals by sharpening its ability to win new customers, retain existing ones and secure their loyalty.
Teaming up with ISR, ENTEGA deployed a cutting-edge IBM Analytics solution that uncovers insights into how customers respond to different types of offers, enabling highly targeted marketing.
5x higherresponse rates from accurately targeted communications
4x salesfrom contacting 50 percent fewer customers with targeted offers
Cutscost per campaign
Business challenge story
Competition heating up
Competition in Germany’s energy market is more intense than ever. In their efforts to win greater market share, energy providers are slashing prices, and many companies now offer large cash rewards to customers for switching from another provider. As a result, it is tougher than ever to retain existing customers and win new business. Juliane Schulze, Head of Marketing Control at ENTEGA Energie, the group’s subsidiary responsible for supplying energy to households and businesses, explains: “We need to work harder than ever to secure the loyalty of our existing customers, and to acquire new ones. We recognized that our communication with customers represents a critical element of their experience. If we bombard our customers with frequent offers which are largely irrelevant to their needs, we risk losing their business to rival providers.” On top of that, ENTEGA needed to give the consultants access to its huge volumes of data—while keeping that data secure. Additionally, the company often had to wait weeks for the results of the analyses.
“The consultants helped us uncover some valuable insights into customer preferences,” continues Juliane Schulze. “But the process was extremely time-consuming. Because companies in our industry generate massive volumes of complex data—such as figures on energy consumption—we had to teach each consultancy firm about the data we collect, how it is structured, and how to work with it.”
Taking the first step towards optimizing its marketing campaigns, the company engaged external consultants to analyze how individual customers responded to different types of offers. “As our industry became even more competitive, we decided to take more serious action,” remarks Juliane Schulze. “We wanted to increase the volume and complexity of our analytics, and bring the in-depth understanding of customers in-house. We began looking for a solution that could provide sophisticated analytics, but that was also user-friendly enough for our sales and marketing staff to use independently.”
After evaluating offerings from a range of vendors, COUNT+CARE – ENTEGA’s IT service provider—deployed IBM® SPSS® Modeler Gold, a state-of-the-art predictive analytics platform. ISR, an IBM Premier Business Partner, provided support during the implementation. Rafael Ghilardi, Head of Business Intelligence Services at COUNT+CARE, comments: “We selected IBM SPSS because it makes highly advanced analytics technology accessible to everyone, even people who usually don’t have formal statistical training. This meant that our sales and marketing teams could examine massive data sets without support from IT staff. “What’s more, with SPSS we can analyze data directly in our data warehouse—without transferring it between different systems. That means we get better performance on our analytics, and we have a single version of truth.” Juliane Schulze adds: “The ISR team has a wealth of experience using the SPSS solution, so having them on board was enormously helpful.” The SPSS solution integrates seamlessly into ENTEGA’s existing business intelligence environment. First, the company uses IBM InfoSphere® DataStage combined with IBM InfoSphere Change Data Capture software to integrate and transform large volumes of data from operational systems to the IBM PureData® System for Analytics data warehouse in near-real time, where ENTEGA staff use the SPSS solution to study the data. Once the analyses are complete, the results can be studied using the IBM Cognos® Business Intelligence solution, which provides eye-opening reports. ENTEGA is also using IBM Predictive Customer Intelligence to help it make relevant recommendations to each customer based on their buying behavior, online activity, social media presence and more.
Lighting the way to game-changing insights
Today, ENTEGA uses SPSS to examine data on energy tariffs, prices, energy consumption, customer responses to marketing campaigns, how often and why customers contact ENTEGA, and more. By performing cluster analyses, ENTEGA can define segments of customers with similar purchasing behavior. The company can then design specific marketing campaigns tailored to suit those people’s interests. Juliane Schulze reveals: “With IBM Analytics, we are developing an even deeper understanding of our customers’ needs and desires than we ever had before. “For example, we have five energy tariffs—such as one that offers a longer price-freeze guarantee, and a cheaper account to be managed online. With SPSS, we can see which customers would benefit most from each tariff, and use these insights to optimize our marketing campaigns. As a result, we run many granular, highly targeted campaigns, aiming to send the right offer to the right customer at the right time via the right channel. “Because our communications are much more closely aligned to customer needs, response rates have increased five-fold. In the past, we often wrote to around 100,000 customers to spark a certain uptake of a new offer. Now, we can achieve four times as many sales by writing to just half of the customers. Customers are happy because they receive only relevant offers, and we achieve a much better return on our marketing spend—it’s a win-win.” The IBM Analytics solution enables ENTEGA to achieve unprecedented time-to-insight, translating into stellar business agility. By targeting communications towards much smaller customer segments, ENTEGA has also cut the cost per campaign. Analytics is also helping ENTEGA to pinpoint golden opportunities for boosting sales. Juliane Schulze continues: “We can determine which customers might be interested in purchasing additional products from us, and send them relevant offers. On top of that, we now give cash rewards to customers who recommend us to their friends. These services are useful to customers, and help us win their loyalty.” Building on its success, ENTEGA is now looking to take advantage of an IBM predictive maintenance solution. Rafael Ghilardi explains: “As one of Germany’s leading providers of renewable energy, we operate many wind and solar farms. We monitor power generation plants in real time, and plan to start using the IBM Predictive Maintenance and Quality solution to detect problems with equipment before it breaks down. As a result, we will be able to shift our focus from emergency repairs to planned maintenance, and unlock major cost savings. Juliane Schulze continues: “IBM Analytics helps us market our products and services much more effectively, and save money at the same time. In an industry as competitive as ours, those capabilities are extremely valuable.”
ENTEGA is one of Germany’s leading renewable energy providers. Headquartered in Darmstadt, the company employs more than 2,200 people and generates annual revenues of approximately EUR1.68 billion (USD1.9 billion).
- Cognos Business Intelligence
- E&U: Customer Operations Transformation (COT)
- InfoSphere Change Data Capture
- InfoSphere DataStage
- InfoSphere Information Server
- InfoSphere Information Server multi-product deals and SOA
- PureData System for Analytics (powered by Netezza technology)
- PureData System for Analytics N1001-002
- SPSS Modeler
- SPSS Modeler
- Software: Predictive Customer Intelligence
Take the next step
ISR, an IBM Business Partner, specializes in adapting market-leading technologies to meet the needs of its individual clients. In particular, the company focuses on helping its clients conduct big data analytics, automate processes, and meet compliance requirements. Based in Braunschweig, Germany, ISR employs more than 150 people and generates annual revenues of approximately EUR15.9 million (USD18.06 million). To learn more about ISR, please visit: www.isr.de IBM Analytics offers one of the world's deepest and broadest analytics platform, domain and industry solutions that deliver new value to businesses, governments and individuals. For more information about how IBM Analytics helps to transform industries and professions with data, visit ibm.com/analytics. Follow us on Twitter at @IBMAnalytics, on our blog at https://www.ibm.com/analytics/blogs. View more client stories or learn more about IBM Analytics