Market Strategies International

Library

Helping a Natural Gas Provider Understand Customer Sensitivity around Rate Increases

Issue

A natural gas provider needed to understand customer sensitivity to a potential rate increase, specifically pinpointing where customers perceive the additional charge to be too high.

Process

Using an online-telephone survey methodology with more than 1,500 current customers, we set out to identify the impact of incremental increases in natural gas rates on customers’ opinions toward the provider as well as resulting actions customers might take to reduce their natural gas usage.

Result

Market Strategies’ research identified the rate percentage increase customers would tolerate. The increase threshold did not prompt most customers to reduce gas usage nor did it negatively impact opinions of the utility among the majority of customers. As you might expect, a rate increase above the acceptable percentage threshold is not considered reasonable by a majority of customers and would prompt an undesirable reduction in natural gas usage. However, the study revealed that even at a higher increase, most customers would take lower-impact actions like adjusting the thermostat and reducing hot water usage as opposed to more drastic actions like replacing a gas appliance with an electric one.

< Back to Library