Measuring customer satisfaction
Customer satisfaction is literally the textbook indicator of market perceptions and, “is perhaps the best indicator of… [a business’s] future [performance].” The American Customer Satisfaction Index (ACSI) defines its customer satisfaction metric as, “a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States,” the ACSI Utilities, Shipping, and Health Care Report 2018.
The ACSI for utilities has improved, but only very slowly and only in recent years.
“Customer satisfaction indexes in the US and the UK have painted utility providers in a less than favorable light in recent years,” says an article on the SAP website, “The Future of Customer Engagement and Commerce.” It goes on to cite the 2015 ACSI’s overall drop in satisfaction. In the UK things may or may not be better, but not enough better to correct an overall downturn in satisfaction.
Thankfully the utilities are starting to respond. The 2018 ACSI report notes that customer satisfaction, “inch[ed] up by 0.4% to… 75.2,” of 100 points. This report is, “based on interviews with 16,763 customers, chosen at random and contacted via email between January 5 and December 13, 2017.” Unfortunately, measuring customer satisfaction also found that this “glacial” rate of adaptation appears to characterize energy utilities right now despite the “rapid change” in the “industry landscape.”
“The uptick in household satisfaction with the sector is entirely due to municipal utilities, which improve 4.2% to 75 [points], while cooperative utilities ranked higher; they lost 1.3%," said the report. The sluggish change is not due to dissatisfaction with reliability. “Electric service is very reliable… and restorations after outages have improved….” Even though, “Website satisfaction [was] also up….” It seems that other factors like billing and staff interactions have limited the improvements.
By measuring customer satisfaction, utilities can address these issues more accurately. Request a consultation to learn more about valuable tools for measuring customer satisfaction providing better customer communication management.
The picture may be brighter depending on who you ask. Starting in 2015, J.D. Power began to measure a significant improvement in customer satisfaction which jumped by 21 points (out of 1000) over the prior year. This survey is bigger than ACSI’s with over 102 thousand responses. “The 2015 Electric Utility Residential Customer Satisfaction Study is based on responses from 102,525 online interviews conducted July 2014 through May 2015 among residential customers of 140 electric utility brands across the United States….”
Part of the reason JD Power measured an improvement was due to price. “[A] 35-point improvement in price (595),” was a key contributor. While utilities cannot always guarantee customer satisfaction with prices, another key contributor, communication, is within their control. “A 33-point increase [out of 1,000 possible] in communications…,” was a significant contributor, “to the year-over- year improvement in overall satisfaction.”
Whatever recent changes suggest about the recent rate and direction of customer satisfaction for utilities of different types, there is ample room for improvement in customer communication management. A 2016 Utility Dive article compared utilities’ JD Power customer satisfaction score of 680 to other industries not historically known for their popularity with customers: "Auto insurance customer satisfaction was 811, retail banking scored 793, and airlines at 726." These industries improved customer satisfaction using digital tools to improve service and communication. The article concludes that utilities should follow the same formula.
Request a consultation to learn more about valuable tools for measuring customer satisfaction providing better customer communication management.
Customer communication management means interaction must flow in both directions via channels that each customer uses. Customers vary in which way they prefer to be contacted: email, text message, smartphone app, not just by paper bill with recourse to a call center when something's wrong. By implementing a two-way, multi-channel communication strategy, utilities can gain useful information and provide better service.
Customers are more satisfied when it is easier for them to pay bills, report outages, and get issues resolved. Multi-channel customer communications also save money. “Proactive communications, through email, text or an app, can help utilities save money in their call centers,” notes the Utility Dive article. This may limit frustrations for those who use these channels, and, by reducing call volume, may improve customer interactions with call center staff.
One of the most important times to achieve outstanding customer communication management is during power outages. By measuring customer satisfaction, it has been determined that this matters to consumers in significant ways, and there is enormous room for improvement here. Utilities with the best customer satisfaction communicate, “during a power outage,” with information about, “the cause of the outage, the number of customers impacted and more accurate estimates on when power will be restored.” Communications like this were, “only reaching 7.3 percent of customers,” as recently as 2015, so the positive impact on satisfaction could be significant.
Communication about outages is important, but it's a small fraction of what a utility can do.
More and more, this communication occurs via the Internet of Things, with utility devices talking to customer devices. But customers want to access, share, and understand this data. So communication must be more than merely dumping data to customers. That 2016 Utility Dive article quotes Renee Castillo senior director of customer experience services at Salt River Project, “You have to go a step beyond just putting data in front of customers… Utilities must also educate, so customers know how to use the information.” At the Salt River Project, she says, this has a conversational quality.
Okay, so communication that educates and provides control is important, but what exactly should the messages say? Utilities need to understand their customers to know that.
 Bendle, Farris, et al. (2010) Marketing Metrics: The Definitive Guide to Measuring Marketing Performance, p. 56. Pearson Education.