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Utility customer satisfaction suffers from lack of 'touching and feeling' experience

Electric utilities rank lower than commercial airlines incustomer satisfaction. Let that fact sink in for a moment.

The U.S. electric power system is among the most dependablein the world, delivering a flow of power to its customers with more than 99% reliability.And yet in a new residentialcustomer satisfaction study by J.D. Power, released earlier inJuly, electric utilities came in well below airlines, an industry known fordelayed flights, lost luggage, extra fees and increasingly smaller seats.

Ernest DelBuono, a senior strategist with Levick, aWashington, D.C.-based public relations firm that works with the airlineindustry, attributes the lower customer satisfaction rating of electricutilities to "the lack of a touching and feeling experience."

"The reliability of the experience of a utility is notreinforced regularly," DelBuono said. "When we go home and flick onthe light, we don't say, 'It's great the light came on.' Unless there's an icestorm out there, we expect it to be on."

Customers can give commercial airlines a grade at manypoints during a journey, from selecting a seat to finding overhead space toretrieving a checked bag, DelBuono said. "Contrast that with coming homein the winter when it's dark, you're typically not asking yourself if the porchlight is going to be on, or if the microwave is going to work, or am I going tobe able to charge my cell phone," he said.

In J.D. Power's 2016 electric utility customer satisfactionsurvey, the firm found that only 11 out of 137 electric utility "brands"surveyed had customer satisfaction scores higher than the average score for theairline industry.J.D. Power measures customer satisfaction with utilities looking at six factors— power quality and reliability, price, billing and payment, corporatecitizenship, communications, and customer service — and scores companies on a1,000-point scale. The utility industry's overall satisfaction rating for the2016 study averaged 680.

For its 2016 airline survey, released in May, J.D. Powermeasured passenger satisfaction with North American airline carriers based onperformance in seven factors: cost and fees, in-flight services,boarding/deplaning/baggage, flight crew, aircraft, check-in and reservation.Satisfaction for the survey is also calculated on a 1,000-point scale.

John Hazen, senior director of the utility practice at J.D.Power, explained that the surveys can be viewed as an apples-to-apples comparisonfrom an overall satisfaction perspective. "If we did the J.D. Powersyndicated rankings across all industries and lined them on a PowerPoint slide,utilities will be at the bottom or near the bottom of that slide consistently,"he said.

But Hazen emphasized that there are a group of "realgood utilities" that are trying to take innovative steps with customersatisfaction and are focused on continuous improvement. There is a "middleof the pack" group that is focused on safety and reliability at times, butcustomer satisfaction does not rank as high on these utilities' priority list.And then there is the bottom 10% to 15% of electric utilities "that arestuck in the mud," Hazen said, adding, "They still haven't figuredout what to do, how to do it."

In its 2016 electric utility survey, J.D. Power said overallsatisfaction improved for the fourth consecutive year, averaging 680 points, upby 12 points from 2015. But the industry still trailed far behind otherindustries, including auto insurance at 811 points, retail banking at 793points and airlines at 726 points.

Among both large and mid-sized investor-owned and municipalutilities, Clark Public Utilities,a customer-owned public utility that serves more than 193,000 customers inClark County, Wash., ranked first in the nation with a score of 743. , a utility that more than 170,000customers in Chattanooga, Tenn., ranked second nationally with a score of 737.The scores of the top airlines, on the other hand, came in more than 40 pointshigher in the J.D. Power survey.

Competition among airlines likely plays a role in eachcarrier's drive to improve the customer experience, Hazen said. Even thoughutilities are monopolies that do not compete with other utilities in deliveringelectricity to customers, their customers are still able to compare theirperformance to other types of retail companies. "Customers aren't just comparingyou to other utilities," Hazen said. "When I go to pay a bill for anyservice that I have, I compare that experience to paying my electric or gasbill."

The stronger-performing utilities are good at listening totheir customers and communicating to their customers what they are going to dowith the revenue collected in monthly bills, Hazen said. With the higher-rankedutilities, even though customers cannot switch from one distributor to anotherlike a traveler can switch from Delta to American Airlines, "customers arefine with the inability to choose someone else," he said.

Oneof the strong performers, ExelonCorp. subsidiary BaltimoreGas and Electric Co., or BGE, uses the feedback found in studiesissued by J.D. Power as well as its internal customer satisfaction surveys toidentify areas where it could improve. BGE ranked third among large electricutilities in the East region in the 2016 survey and fifth in the same categoryin the 2015 survey.

"Weare a service industry. We absolutely pay attention to customer feedback, andwe adjust to improve," BGE President and COO Stephen Woerner said.

BGE takes its internal customer satisfaction surveys andjuxtaposes them against not only the utility industry but other serviceproviders in the retail sector, said Claude Lijoi, the company's manager ofresearch and marketing analytics. Banking, which traditionally ranks high inJ.D. Power's customer satisfaction survey, is an industry that BGE is studyingto see how its members interact with customers. "We happened to be lookingat Bank of America Corp.There's a lot of touch points along the way with their customers. It can bebranches. It can be via the website, via the telephone," Lijoi said.

Through the use of "journey mapping," wherecompanies put themselves in the place of the customer, BGE tries to identifythe pitfalls and opportunities for improving the customer experience, Lijoiexplained.

Compared to airlines or banks, utilities are slower inimplementing changes such as rolling out a new website, Hazen said. When autility unveils text messaging to alert customers about outages, it does nothelp if only a small number of customers sign up for the text alerts due topoor communications on the part of the utility, Hazen said. "The good onesare becoming more like a marketing company that also is a utility," hesaid. "The more you tell me what's going on, the higher the satisfaction."

J.D. Power and S&PGlobal Market Intelligence are divisions of S&P Global Inc.