Insights Powered by Cogent Reports™
In competitive markets, brand strength has long been associated with positive business outcomes, including growing revenue through increased market share, elevated pricing power and higher customer loyalty. While market share and customer loyalty haven’t historically been things utilities think about, they are taking on a new strategic importance as the tectonic plates underpinning the 21st century energy market continue to shift.
Utilities are beginning to manage their brands to support the new market challenges they face—from implementing new rate structures to figuring out how to sustain financial growth. Successfully navigating these challenges requires strong brands with enough emotional leverage to persuade consumers to come along on the journey to a new energy future.
Our Utility Trusted Brand & Customer Engagement study, now in its sixth year, focuses on the impact of brand on customer engagement for the utility industry, making Market Strategies-Morpace the undisputed leader in brand insights for utilities. Through this research, we’ve identified three elements of brand value for utilities:
- Enhanced pricing power via customer support for higher rates.
- Revenue growth by capturing market share for new product offerings not protected by the utility’s monopoly position.
- Lower risk of customer and load defection as customers consider distributed energy resources and dis-intermediators.
At Market Strategies, we’ve recently seen an uptick in utilities wanting to better define and manage their brand. I recently sat down with Claire Maglione, New Jersey Natural Gas’ (NJNG) manager of customer experience, to discuss how they’ve approached their brand work and why it’s important even for a regulated utility like NJNG. Below is a lightly edited transcript of our conversation.
Why is brand important to a regulated utility like New Jersey Natural Gas?
Claire: Typically, a company uses a brand to differentiate itself from competitors. For most energy utility companies, that doesn’t necessarily hold true. In our service territory, customers can choose their natural gas supplier, so in that sense there is competition, but they cannot choose the company who delivers it. For NJNG, the importance of brand is a matter of being viewed as a trusted source: to safely and reliably provide natural gas to homes and businesses, enable customers to easily conduct business, educate customers on energy-efficiency, make products and services both affordable and available and be a good community partner.
Does the average person shop for energy products through their utility? We know that customer preferences for shopping, particularly for Millennials and Gen Xers, is shifting toward online or mobile phone and away from traditional “brick and mortar” stores—51% of Americans think shopping online is the best way to shop (source: Big Commerce). But, how does that translate for utilities? Consumers embrace new products, adapt to new services more quickly and spend significant time researching and comparing online shopping options prior to making purchases. Product reviews and word-of-mouth opinions carry more weight than ever, and visual representations including product displays are expected to “come alive” during the purchase process. Such changing consumer behavior requires that traditional marketing tactics evolve to meet these shifting consumer demands, and utilities are not the exception. Continue reading
Recently, we announced our 2017 Environmental Champions to highlight the utilities that have developed effective approaches and struck a chord with their customers who like to hear about the dedication of their utility to the environment. These utilities are, in turn, rewarded with high Brand Trust and Customer Satisfaction scores.
‘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.
Study Shows High Operational Satisfaction Combined with Trust Is a Winning Combination
Insights Powered by Cogent Reports™
It is not surprising that managed business accounts for electric utilities are significantly more satisfied with their utility’s operations than other businesses are. Managed business accounts have the best of both service worlds—the ability to call someone at the utility as well as multiple options for self-service. Their average score of 791 (on a 1,000-point scale) on Operational Satisfaction is a significant 20 points higher than the average score for businesses without account managers (771). And the top-quartile-performing utility managed business account programs score 820 or higher.
But there is a catch. High operational satisfaction does not necessarily translate to businesses trusting their utility to advise them or aid in the success of their business. That said, what does it take to build a top managed business account program at your utility that goes beyond operational satisfaction?
The Cogent Reports™ 2016 Utility Trusted Brand & Customer Engagement™: Business study scores Operational Satisfaction by measuring billing, payment, safety, reliability, and customer and field service quality for electric utilities from business customers’ perspective. On these measurements, managed business accounts at electric utilities have high operational satisfaction and are much more engaged with their utility. Continue reading
How Two Utilities Are Differentiating Themselves for the 21st Century
Insights Powered by Cogent Reports™
While upside opportunities on operational satisfaction are limited, there’s a significant opportunity to better engage electric and gas utility customers through a focus on brand trust and product experience. Brand trust and product experience compose up to two-thirds (60%–63% depending on utility type and region) of a customer’s engagement score with the utility, and both categories score consistently lower than operational satisfaction. These opportunities are clearly at the forefront of how Maik Neubauer, managing director of Shell PrivatEnergie, and Ari Sargent, CEO of Powershop, are thinking about building a successful 21st century utility, based on a webinar discussion I recently participated in with these two global energy experts.
Shell PrivatEnergie and Powershop are retail electric providers in Germany and New Zealand, respectively. Although both of these markets are highly competitive, the conversation provides key insights for utilities looking to strengthen their brand and stay in front of future regulatory and market changes.
Gaining Trust Using the Right Brand Differentiators
According to Maik, Shell PrivatEnergie is focused on service quality and brand reputation because low prices are not enough to sustain an advantage in a competitive market. Shell PrivatEnergie has leveraged the Shell brand and its motorsport heritage to stake a claim on being better and faster than its competitors. Additionally, the company has struck on a unique distribution channel, offering home electric and gas service at Shell service stations across Germany. The company has found this to be successful, and it is a tactic US utilities can use to more effectively reach customers where they are—for example, how Georgia Power has seamlessly integrated its energy-efficient lighting rebates with Home Depot and Walmart stores. Continue reading
With a little effort, these customers could become your most loyal, active
Anyone who helps direct the customer outreach activities of a business enterprise knows that, in an ideal world, you should be tailoring your marketing efforts to different audiences. But for energy utilities, which have an obligation to serve a consumer base as diverse as the country, it can be especially hard to know where to start.
So to focus your efforts for 2016, ask yourself: If I could target just one customer segment this year to improve my customer metrics, which should it be?
After nearly two years of running the Residential Utility Trusted Brand & Customer Engagement™ study, the answer is clear to me: The customer segment you should be targeting now is Hispanics.