Utilities Face a Widening Communication Gap

Utility communication professionals need to become more strategic as technology changes the way customers want to access information.

Utilities Face a Widening Communication Gap

Utilities have a widening communication gap with their customers, hindering utilities’ ability to engage with customers and build brand trust.

According to our recent Utility Trusted Brand & Customer Engagement™: Residential study, 54% of residential customers want to hear from their utility via digital media—email, texts, mobile apps, online advertising, social media or websites—making digital communication the most preferred of any communication channel. And yet, only 33% of consumers recall any digital communication from their utility.

Communication Medium Response

That’s a significant mismatch of 21 percentage points. Today, utility communication strategies are stuck in the past, at a time prior to the rise of the smartphone and the tablet. In order to remain relevant, utilities need to develop communication plans that embrace new technologies to address consumer expectations of the new millennium.

Bill-based communication—inserts, newsletters and messages printed on a bill—is the most common way customers report hearing from their utility, even though only 39% prefer bill-based communication in contrast to over half (54%) that prefer digital.

Of course there is still room for traditional communication. But while a significant subset of customers still want to get bill inserts, that segment is rapidly shrinking and is no longer your biggest audience. Furthermore, bill inserts fail to engage customer segments the same way that digital does. The “Digital Types” customer segment is a sizable market for utility communications, and this segment’s preference for digital communication is almost twice that of paper-based bill-insert communication (see table above).

To further support the need for digital, the table below reveals that customers perceive utilities to be more effective communicators when customers receive outage information through digital communication. In fact, proactive digital communication during outage events is the most effective means of communication.

Outage Effectiveness by Response

The greatest gap between the forms of communication customers want versus what they get is in the digital realm, however. It can be costly and complex to develop a robust digital communication strategy, but several utilities with talented communication professionals have now blazed that path—and these utilities have impressive returns to show for their efforts. Entergy, CPS Energy and TECO Peoples Gas have some of the highest rates of customer digital communication recall in our survey. It’s no coincidence that these utility brands also have Engaged Customer Relationship (ECR) scores well above the industry average.

Recall by Communication

While it is true that the medium needs to fit the message, our study proves that utility communication professionals need to leverage digital communication strategies and embrace the latest technology trends for future success. And our survey of more than 52,000 customers of the country’s 125 largest utilities shows that when utilities communicate with customers using the medium they prefer, customers reward them for it.

Today’s customers prefer digital media, and that preference is only expected to grow. It’s up to utilities to decide whether the communication gap grows with it.

Download a case study for TECO Peoples Gas

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Chris Oberle

About Chris Oberle

Chris Oberle is a senior vice president in the Energy Research division, with more than 25 years of executive management experience in the energy and financial services sectors. He manages the development and delivery of syndicated studies, custom research, best practices and advisory services. Throughout his career, Chris has earned a reputation as a customer experience thought leader by helping clients improve the way they develop, deliver, engage and satisfy customers with their programs and brands. Chris earned an MBA from Georgetown University and a bachelor’s degree from the University of Southern California. He coaches youth sports and spends time with his kids at USC and UCLA.

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