New research shows that two out of three (62%) Texans prefer large, trusted and financially stable retail electric providers (REPs) over smaller REPs that typically rely on low rates to attract customers. Additionally, most customers don’t use online electric-rate shopping tools. This means well-known large REPs have a significant competitive advantage over small- and mid-sized REPs with weak brands. These results are from the annual Cogent Reports™ Texas Retail Electric Provider Brand Trust Study™ by Market Strategies International-Morpace.
“The days of ‘set a rate and wait’ are over for the REP market. Texans are experienced shoppers who already know what brands they can trust to offer great products and service,” said Chris Oberle, senior vice president of Energy Research at Market Strategies-Morpace. “There are over 50 REPs in the Texas market, so smaller REPs need to break through as trusted brands to become part of customers’ considered set of providers.”
Online shopping tools, once thought to be used by all consumers, are a smaller part of electric shopping than expected. Texans use Power to Choose most, but only 26% use it and fewer use any other available online shopping tool. And customers who use online shopping sites tend to be less loyal to their REPs, with half as many saying they are likely to remain with their REP after their contract is up compared to those who do not use shopping sites.
“Right now, the big REPs have the upper hand, but with stronger brand-building efforts, small- and mid-sized companies can successfully compete with them,” continued Oberle. “The market imperative from our research is that market share, customer trust and financial stability are linked.”
About the Texas Retail Electric Provider Brand Trust Study
The study measures Brand Trust among Texas retail electric provider customers by surveying 5,462 customers across 43 providers based upon a data-driven brand trust model. The Brand Trust model comprises nine factors: community support, customer focus, communications effectiveness, environmental dedication, local reputation, reliable quality, competitive rates, enhanced offerings, and billing and customer service. The study collects a demographically representative sample across all Texas service territories open for retail electric competition. Market Strategies-Morpace will supply the exact wording of any survey question upon request.