Solar roadways have captured the public’s imagination – see, for example, the viral “Solar FREAKIN’ Roadways” video produced by Solar Roadways and viewed more than 22 million times. And we certainly do use a lot of land for roads and parking lots – 61,000 square miles by some estimates. So why not use this space to also produce power?
We recently released our 2016 Utility Customer Champions, which awards gas, electric and combination utilities nationwide that have the highest scores on our proprietary Engaged Customer Relationship index. Among this list are 26 utilities that have “three-peated,” meaning they’ve been designated as a Customer Champion every year since we started these awards in 2014.
Here’s what sets these utilities apart, and what your utility can do to get on the path of enduring customer engagement:
‘Tis the season when your loved ones ask what you need (or, in my case, your kids proclaim what they want)! In the spirit of gift-giving, we penned a letter to Energy Santa with our “wish list” of energy-related products and services. The ideas are based on results from our 2016 Utility Trusted Brand & Customer Engagement™ study, and although they apply to energy consumers in general, we’re focusing on the group nearly every company hopes Santa will deliver—Millennials.
Want to create more opportunities for women in energy? “Will and determination is all you need,” says Bjarni Bjarnason, CEO of Reykjavik Energy.
Ernst & Young’s 2016 “Women in Power and Utilities Index” reveals that women constitute only 23% of North American utility non-executive directors and 21% of senior management. While this leads the world (Europe comes in second at 23% and 12%, respectively), it is still nowhere near the 51% proportion of women in the overall population. Ernst & Young’s report also highlights why gender diversity is more than a moral imperative – they found that the 20 most gender-diverse utilities outperformed the bottom 20 by 1.07% in return on equity.
Utilities are increasingly turning to value-added products and services to increase customer engagement and reduce their cost to serve, but unmanaged business accounts –commercial customers without a key account representative–are a third less likely to adopt these voluntary programs. This is one of the reasons unmanaged accounts score 25 points lower than key accounts on Cogent Reports’ 1,000-point Engaged Customer Relationship Index.
Utilities have a good sense of how to engage key accounts because they have a personal relationship with them but often don’t know how to engage unmanaged accounts, which constitute a third of utility revenues nationwide. Our research shows that there are five clear segments offering distinct engagement pathways for unmanaged businesses. These segments are:
Brand Trust among residential consumers of the nation’s utilities increased by one point in Q3 over Q2 of 2016. The industry’s overall Brand Trust Index now stands at 694. Emotional attachment brand traits increased two points, while management performance traits increased one point during the quarter. While this is an improvement, utilities are building Brand Trust very slowly, and they have a great deal of work to do to become truly trusted by their customers.
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The utility industry has made significant strides in reducing its environmental impact. According to the Edison Electric Institute, in 2015 utility CO2 emissions were 21% below 2005 levels, driven largely by a switch to natural gas from coal and increasing deployment of renewable resources such as wind and solar. Additionally, utility energy-efficiency (EE) programs nationwide save enough electricity to power nearly 12 million homes each year.
Despite this tremendous progress in environmental stewardship, customers do not perceive their utilities as environmental stewards. As we discovered in our 2016 Environmental Champions awards, customer perception of environmental dedication greatly lags other brand trust factors.
At the end of September, I had the good fortune to present Cogent Reports’ work at the first-of-its-kind energy branding conference in Reykjavik, Iceland. The conference brought together CEOs and CMOs from utilities across the globe, and provided valuable insights into the challenges utilities face and the ways they’ve successfully overcome them. Several key themes emerged from the conference:
1. We’re All in the Same Boat
Regardless of whether utilities were state-owned or investor-owned, whether they were regulated or deregulated, or the role they played in the grid from generation to distribution, nearly every utility that presented shared common challenges that will sound familiar to U.S. utilities. These challenges included making the business case for brand (more on that in a moment), figuring out how to pivot business models, and effectively engaging consumers.
As Nick Gorgoglione, a former senior brand manager for the telecom firm Vodafone said, “We’re not an Apple. People don’t listen to us. People don’t want to listen to us.”
Customers Will Advocate for, but Not Recommend, Utilities
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As utilities continue to evaluate customer measurement scores, the most debated one I hear is regarding Net Promoter ScoresSM (NPS®). Promoters of the theory say that if a customer states he or she would recommend a company, then that company would benefit from a loyal customer base and third-party recommendations. For a retail company where customers can select a vendor, this makes perfect sense. Detractors of the measurement doubt NPS’s applicability to a monopoly where there is no choice but to use a utility for service. It is like recommending someone should use electricity.
How Accurate Is NPS in Predicting Actual Promoting Activity of a Utility?
The Utility Trusted Brand & Customer Engagement™: Residential study surveys 130 utilities and asks the NPS recommendation question. From that data you can calculate NPS in the normal manner (% of 9–10 ratings minus % of 0–6 ratings x 100). However, the following graph shows how NPS performance in no way predicts customers making positive comments about the utility. Continue reading
Turn Outages Into Positive Customer Satisfaction and Brand Trust Scores
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Hurricane Hermine, a category 1 hurricane, knocked out power for more than 300,000 people in Florida before it creeped up and away from the east coast. Most of the electric utilities responsible for the territories in the wake of the storm spent their holiday weekend scrambling to restore power. How each utility performed and communicated with its customers will impact their satisfaction with and trust in their utility. Most utilities’ customer satisfaction and trust scores will decline, but a handful of utilities have figured out how to actually improve their satisfaction and trust scores during power outages.
Don’t Be Afraid of the Dark
Up to half of a utility’s Operational Satisfaction score is driven by reliability, according to the Utility Trusted Brand & Customer Engagement™: Residential study. Additionally, slightly over one-third of a utility’s Brand Trust score directly relates to how the utility responds when the power does go out. For decades, utilities have assumed that power outages depress customer satisfaction and trust, and for good reason—most utilities see this phenomenon in their customer research.
But it doesn’t have to be that way.