How Utilities Must Prepare for the Customer of Tomorrow
Energy utility stakeholders may not consider their company to be a “brand” in the same manner as traditional consumer goods and service companies, but that landscape is changing. Increasingly, utility customers are comparing their energy-related services to other goods and services they use.
With sweeping advances in technology combined with the 40 million+ installed smart meters, there is a recognition that services provided by utilities should be ‘at par’ with service leaders in other industries. While still mostly monopolistic, only utilities that are well positioned in the consumer mind will be able to take advantage of revenue opportunities afforded by technology. And, at its core, a trusted brand scores higher on CX measures and is better positioned to go confidently into rate cases and retrofitting or building new plants.
As a consequence, utilities must now consider brand trust and customer engagement as additional table stakes. The American Marketing Association Dictionary cites numerous interpretations of the term “brand” including:
- The “name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers”
- The “sum total of how someone perceives a particular organization”
As utilities prepare for the energy customer of tomorrow, utilities’ brand definition will need to more clearly focus on shaping the perceptions of their companies.
Energy Utility Brands vs. Traditional Brands
Thinking more about the concept of a brand, it is worth taking a deeper look at energy utilities in the context of other well-known brands that are certainly consumer brands in the traditional sense. In CoreBrand’s Brand Respect 2014 report, beverage makers Coca-Cola and PepsiCo, pharmaceutical companies Bayer and Johnson & Johnson, and motorcycle company Harley-Davidson rank as the most respected brands.
How do utilities fare? Among CoreBrand’s 900 most powerful brands, Consolidated Edison and Exelon are the first two energy utility companies to make an appearance at #299 and #312, and approximately two dozen other energy utilities are in the list, ranging from Pepco Holdings (#372) and American Electric Power (#432) to DTE Energy (#767) and NiSource (#863). While the energy utility industry has some level of familiarity and respect from a brand standpoint, clearly there is room for improvement from an industry perspective.
Utility Trusted Brand and Customer Engagement Study
The Energy division at Market Strategies feels strongly that energy utilities must have a mechanism to measure their brand trust and customer engagement, along with other traditional measures such as operational excellence, customer effort and Net Promoter Score (NPS)—ratings that help clients operate efficiently and successfully in this new era. That is why Market Strategies developed and recently reported findings from the benchmark wave of Utility Trusted Brand and Customer Engagement, a syndicated study that measures these areas among customers of the top 125 electric, natural gas and combination utilities in the US.
A recent article published in SNL Energy cites Market Strategies’ finding that greater incentives are required to induce a change among customers of utilities with high trust ratings. If all gas and electric utilities were to achieve high trust ratings—an industrywide average of at least 725 points out of a possible 1,000—that would increase the value of the industry’s perceived goodwill with customers by $8.3 billion. We might expect to see utilities move up in the cross-industry lists if even a portion of that increase in value were to be achieved.
In his recent blog post, A Trusted Utility Brand Is Required to Achieve High Customer Satisfaction, Market Strategies’ Chris Oberle, senior vice president and key architect of the study, points out that even if a utility were not the best operationally, it still could not afford to give up on engagement. Oberle writes, “if a utility wants an excellent score on customer satisfaction, then it needs an excellent brand,” and he notes that achieving high customer satisfaction means first diagnosing and obtaining a strong, healthy brand position with customers. Oberle identifies six key areas of inquiry that every utility should evaluate and focus on:
- Community support
- Environmental performance
- Customer advocacy
- Communications effectiveness
- Quality and reliability
- Company reputation
Energy customers are evolving faster than ever before. Our new syndicated study helps energy utilities evolve the way they measure perceptions among customers and compares energy companies to identify strengths, weaknesses and ways to improve brand trust and engagement ratings.
Request a link to the on-demand recording of our webinar for a peek at performance and rankings from the Utility Trusted Brand and Customer Engagement study, or read related articles Linking Utility Brand Trust to Financial Benefits and Revealing the Utility Industry’s 12 Environmental Champions.