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Powergen Forecasts $6 Million Return in 12 Months

  • July 01 2007, 1:00am EDT

REVIEWER: Mark Perrett, CRM manager, Powergen.

BACKGROUND: Powergen is part of E.ON, the world's largest investor-owned electricity and gas company. One of the largest energy suppliers in the UK, Powergen has around 6 million residential and small business customers. It also offers a range of home energy services, including boiler and central heating installation, maintenance and insurance.

HARDWARE PLATFORMS: Powergen has implemented KXEN on a Windows Server 2003 platform.

PROBLEM SOLVED: Powergen wanted to maintain marketplace differentiation through more accurately targeted marketing, in turn showing that it better understood its customers' needs. To do so, it needed to quickly build highly accurate models to use with its Oracle data warehouse.

PRODUCT FUNCTIONALITY: KXEN is used in rapidly building a range of propensity models employing the regression analysis component. So far, around 30 such models have been built. Benefits include the repayment of our investment the first time the KXEN software was used, thanks to a 20 percent uplift in sales and a $300,000 saving in direct mail costs. This year, we predict an incremental $6 million contribution over 12 months based on 360 percent and 267 percent sales uplifts from electricity and dual-fuel test campaigns, respectively.

STRENGTHS: KXEN's ease of use makes complex modeling accessible to less technically skilled users, opening up what has traditionally been a highly specialized and niche discipline. KXEN is also fast, achieving in days what could take weeks with other analytics solutions. It is also very effective in presenting results, which it displays in a very useful and readily assimilated way.

WEAKNESSES: The unique value of KXEN is also its primary weakness. The product gives less control of detailed model parameters compared to traditional workbench tools. While the theory behind the product is sound and in the public domain, it is very complex. Users must have faith and take the product at face value; but thankfully, the results more than repay that trust.

SELECTION CRITERIA: KXEN was chosen primarily for its lower total cost of ownership. It did not require massive investment in infrastructure or staff. Other important criteria included its high speed of operation and its ease of use. It is a product that can be installed  and running very quickly indeed.

DELIVERABLES: In our application, KXEN outputs reports and models. Reports are presented on screen in graphical form and make it very easy to see which variables are influencing models. Models themselves are output as SQL code that can be implemented directly in our Oracle data warehouse.

VENDOR SUPPORT: KXEN's pre-implementation support was good. The company spent some time doing workshops with us and provided some very good people to run them. Post-implementation, KXEN has always been willing to discuss and solve issues. The company is also open to suggestions on improving the product and, as a result, has built a lot of user-requested changes into its software. Much of this happens in an easy, informal way that works well for us, with KXEN granting open access to the CTO and even the programming team - something we don't generally see in IT companies.

DOCUMENTATION: KXEN is intuitive, and the online help is very comprehensive. We have never really had to consult the documentation. Indeed, we have never even opened the product manual.

KXEN Analytic Framework
201 Mission Street, Suite 1950
San Francisco, CA 94105
(415) 904-4160

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