A leading clean energy company was confronted with the challenge of managing P&L in the highly complex retail energy industry. The client was faced with fluctuating customer demand, changing commodity prices, market fragmentation, and inconsistent views on customer value. Their existing models fell short in providing detailed insights needed to make intricate decisions. The client partnered with Blend to develop, operationalize, and maintain a model that generates 60-month projections of customer value equipped with survival models, load forecast modeling, data engineering, modular processing units and Tableau dashboards to serve as a unified source of truth for forecasted customer value across the business. The model is used daily for a rage of activities, including pricing, financial planning, wholesale energy management, direct-to-consumer targeting, and sales partner management, leading to immediate benefits.
In the retail energy industry, managing Profit and Loss (P&L) presents a significant challenge due to its inherent complexity. Factors such as unpredictable consumer demand, volatile commodity prices, and a fragmented market contribute to the industry's complexities, making it hard for energy companies to guarantee their business's financial health.
The client, who is a leader in the clean energy sector, required a dependable method to predict future electricity consumption, revenue, costs, and profits. Their current financial models lacked reliability and did not offer the detailed analysis necessary for making informed business decisions in this multi-faceted industry. Moreover, conflicting interpretations of customer value led to uncertainty and dissatisfaction. The client sought a solution that would not only provide a comprehensive overview but would also enable them to strategize effectively and forecast customer value.
Our Client collaborated with Blend360 to create, maintain, and operationalize a forecasting model that projects customer value over 60 months. The model comprised several pivotal components, each designed to navigate the complexities of the industry while catering to the Client's specific business requirements:
As a result of this collaboration, the client now benefits from a unified, reliable model for predicting customer value, which is utilized throughout their organization. This model's findings are applied daily across diverse operations, such as:
• Lifecycle Pricing
• Financial Planning, including the 2021 plan and subsequent updates.
• Wholesale energy management.
• Direct-to-consumer targeting.
• Sales partner management.
This leads to immediate and tremendous benefits, highlighted below.