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How Centrica used GDPR and Pegasystems to reward loyal customers

Thanks to the EU’s General Data Protection Regulation, the utility provider has been able to fine-tune a digitally enabled initiative that works across the business

Utility provider Centrica, the parent company of British Gas, has developed a loyalty programme to reward its long-term customers.

The project, which is part of an IT modernisation programme, includes a system built on Pega cloud and Hadoop to provide unified business processes, technology and customer experience.

Describing the nature of customer experience in utilities at the Pega Customer Engagement Summit in London, Paul de Laat, customer insight director at Centrica, admitted that people don’t really want to have a relationship with energy and home services businesses.

Like many traditional businesses, Centrica has been on a digital transformation journey to become more of a data business. Five years ago, British Gas was an energy company, and its home services operations represented a third of the business.

But over the past four to five years, the dynamics have changed. Some 40% of British Gas customers now have smart meters, which is driving data in energy usage. The utility firm’s smart central heating system, Hive, provides additional data about people’s energy usage habits.

Centrica wants to use that data to create a clear picture of its customers. For de Laat, the challenge is how to make a digitally powered change at Centrica, an organisation that has traditionally operated in a siloed fashion.

“It requires people, processes and technology to work together to unlock the value of data for customers and for us. We use data to understand customer pain points,” he says. This is achieved by trying to understand the root cause of complaints to ensure the problems do not happen again.

Most organisations do not make the best use of data to deliver relevant services, according to de Laat. Centrica uses a big data lake to create a single customer view and applies a lot of data models to create relevance. It is important that this data is not restricted by product or channel.

In effect, the data lake and the data models work together to provide a brain that understands Centrica’s customers.

Loyal customer programme

Centrica’s customers tend to stay with the utility firm rather than looking for the best deals elsewhere, according to de Laat. “We have people who have been with us for years,” he says.

But when the company conducted surveys, it found a lot of customers came back with the same problem – they were not recognised across different Centrica products.

The data lake and the data models work together to provide a brain that understands Centrica’s customers

The company wanted to create a rewards programme that recognised these loyal customers, who spend a lot of money with Centrica. 

The loyalty programme covers third-party and Centrica products, and, according to de Laat, is tuned to be highly relevant to individual customers. “For every year you are with us, you get a day of free energy, up to 20 days,” he says.

The loyalty programme integrates with the company’s web portal and will be available as a smartphone app. “The whole proposition is digital, which is where Pega sits. We created a pure digital rewards programme that says, ‘Thank you for spending a lot of money on Centrica services’,” he says.

As is often the case, technology is never the hardest part of an IT project that aims to change the way staff work. “I had no doubt that the tech could do this,” says de Laat.

However, most people stayed in their own part of the organisation. This meant data flowed more slowly across the different areas of the business, so it would take a few days for updates to get through.

Another problem with the way Centrica was organised was that even though the aim of the loyalty programme was to create a single view of the customer, each department had its own customer silo. To get around this, he says the Centrica team responsible for delivering the loyalty programme needed to be a virtual team, comprising stakeholders from different areas of the business.

Through the Pega-powered loyalty programme, Centrica has been able to unify business processes and technology and provide real-time customer experience data that remains consistent across the web and contact centre channels.

Benefits of GDPR

The General Data Protection Regulation (GDPR), which came into force in April 2018, felt like Y2K, says de Laat, but it also presented a “great opportunity to renew our relationship with our customers”. 

GDPR offered Centrica an opportunity to ask customers to tick a box that explicitly gave the company permission to use their data. He says Centrica was also able to use GDPR to be completely transparent with its customers about how their data would be used.

GDPR has enabled Centrica to monitor the effectiveness of email campaigns for its new loyalty programme. Customers have responded well to the loyalty scheme, with email invitations achieving a click-through rate of 80%, and 50% of those customers subsequently signing up to the loyalty programme. “This shows there is a pent-up demand,” says de Laat.

Read more about Centrica

  • The CEO of Centrica recently met with the head of Microsoft to talk about strategy; we speak to CIO Mike Young.
  • Centrica, the parent company of British Gas, acquires machine learning company to bolster its data analytics business.

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