For top utilities, customer satisfaction hinges on empowerment
The new J.D. Power customer survey shows not enough to provide reliable, affordable power anymore
A new customer satisfaction survey reveals customers are happiest when they are in control of their energy use and in communication with their utility.
J.D. Power released its 2015 residential customer satisfaction survey last week, showing overall customer satisfaction with the industry rose for the third consecutive year. The survey found communications and price satisfaction to be the primary drivers, but a look at the results also reveals some surprising truths about utilities' customers.
First is that utilities are significantly underestimating the volume of communication their customers want. Gone are the days when you only communicated with your electric provider during an outage or some other pain point – today's customers want more communication, and they're expecting it to empower them.
That's the second point: Customers want knowledge and choice — some feeling of control over their energy consumption, and possibly even production. J.D. Power found almost 30% of customers are considering going solar in the next two years, and those that do are happier with their utility.
“The thing that really differentiates the top utilities, they provide the customer some form of choice,” said Andrew Heath, senior director of energy at J.D. Power.
“It's obviously a regulated monopoly [in many cases], and the customer has no choice in terms of who they get the service from. But whenever a utility offers programs or services that a customer can choose to participate in, that has a significant impact [on satisfaction],” Heath said. “Not all utilities do those things, but the ones that do get a significant uplift in terms of overall customer satisfaction.”
More than a quarter of customers (28%) who do not already have solar power say they either “probably will” or “definitely” will consider panels within the next two years. And while the number skews to the probably (only about 4% answered definitely, Heath said), the results demonstrate the growing interest in solar power and self-generation.
Customers who do already have solar panels also show higher satisfaction scores with their utilities. You could argue customers are happiest when they don't need the utility as much, but Heath says that's probably not the right way to look at it.
“The utility is sill heavily engaged in the process,” he said, connecting the customer's system to the grid and buying back unnecessary power. In that instance the utility is the facilitator, “and if power from the solar panels is not always available, there is an appreciation for the utility.”
But as rooftop solar spreads, utilities will also need to be prepared to handle higher call volumes, J.D. Power warned – until they understand their systems, they are three times more likely to call the utility with questions. Communication, however, is not an area where utilities have traditionally fared well.
Customers want more communication – up to twice as much
The utilities which begin to separate themselves “are just better at engaging, are much better communicators,” Heath said. They may be more actively involved in the community, and they are far more likely to pursue proactive communications.”
The old model of thought typically held that customers only interacted with utilities during an outage, a change of service, or a bill complaint. But utilities have taken a cue from retailers, Heath said, who long ago learned the value of constant communication.
“It's definitely an area where utilities are improving,” he said. “However … that is something that historically not been a part of the way most regulated utilities did business.”
But if customers want more proactive communications – bill alerts and efficiency comparisons – how much more should utilities be doing?
“We have preference questions we ask: 'How frequently would you like to hear from your utility?' Even the best performers in terms of communication volume, those best performers are still well short of what customers want.”
It's a “significant” gap, he said – customers want up to twice the volume of communication they're currently getting.
The survey found communications about a utility company’s infrastructure were among the topics customers were most interested. On a 1,000-point scale, communications satisfaction was 767 among customers whose last communication with their utility was about reliability. If the last communication was about electric system upgrades or improvements, the score was 751.
Communications about price or rate changes boosted averages to 683 vs. 625 for customers who did not receive rate communication.
By the numbers
J.D. Power said overall customer satisfaction averaged 668 in 2015, a 21-point improvement from 2014. The rise was attributable to a 33-point increase in communications (625) and a 35-point improvement in price (595).
While the average monthly bill remained unchanged in 2015, at $132 per month, the survey saw customer satisfaction improved more in the price factor than in any previous year. J.D. Power said one factor may be that fewer customers have read or heard about a rate increase in 2015, compared with 2014 (32% vs. 38%, respectively). A slightly higher percentage have heard about a rate decrease (4% vs. 3%).
Among large utilities, Salt River Project (738) and SMUD (723) had the highest overall satisfaction scores. SECO Energy (749) had the highest satisfaction score for midsize utilities.
Duke Energy's utilities continued to struggle with customer satisfaction, with Duke Energy-Carolinas, Duke Energy-Progress and Duke Energy-Florida occupying three of the bottom four slots in the large Southern segment.
The company issued a statement saying it "will take these results—good and bad—and learn how we can better serve our customers."
Duke said it continues to work on solutions for managing coal ash and the closure of coal-fired plants and ash basins, a particular issue in North Carolina for the utility. And "We’re investing heavily in renewable energy, which we believe is a key component of our energy future," the company said," as well as working to improve outage communication and proactive notifications.
"Later this year we will launch proactive energy usage alerts so customers can better manage their overall energy costs," the company said. And "we are piloting a pay-as-you-go plan based on customer feedback that they’d like more options for budgeting."
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