Tension Exists between Good Customer Service and Maintaining Customer Loyalty
Washington, DC … DEFG, a management consulting firm specializing in energy (http://defg.local/), released today EcoPinion Consumer Survey No. 19 focused on customer choice in the utility sector. The national survey of 1,000+ consumers examined consumer perceptions of customer service and the need for more options, including budget management tools, payment and pricing choices, and new channels for communication.
How do we offer a more targeted, segmented approach that leads to differentiated product offerings and services for the 30 percent of customers who are not satisfied?
“The majority of consumers believe that utilities provide adequate to excellent customer service,” stated Jamie Wimberly, CEO of DEFG LLC. “Yet, when asked if they would choose a different provider if they could, a significant number of consumers are extremely likely, or somewhat likely, to switch providers. These findings call into question the value of good customer service if there is little customer loyalty.”
The primary findings from the consumer survey are:
- Respondents thought their electric utility provided a better or equal value to every other service provider of comparable services, e.g., telecom, cable, water, etc.
- Customers have definite feelings about what other services make sense to possibly bundle with their electric service. Other utilities (e.g., water), make sense to bundle with electric service. Mobile phone service does not make sense. Overall, though, there seems to growing consumer concern about bundling services together.
- A majority of customers are satisfied with the amount of options and information provided by their utility. However, a significant subset of customers (25-30 percent) is not satisfied. This subset represent a challenge and opportunity to move the dial on customer satisfaction on a going forward basis.
- Customers view energy usage information as being relatively more useful to them, especially for the purposes of managing bills and/or future costs.
- Approximately half of consumers indicated that they would prefer to pay online; however, most utilities are not even close to that percentage of consumers on electronic billing. The second choice is receiving the traditional paper bill. The top two responses indicate a need for a segmented approach to bill pay options.
- When reflecting on which payment and pricing options consumers may want to try, the top two responses were “budget billing” and “stable pricing.”
- On one hand—as evidenced by the one word responses to describe their utility’s customer service—customers are generally happy with their utility’s customer service. On the other hand, a quarter or more of consumers indicated a strong likelihood of switching to another provider if given the opportunity. One explanation could be that customers are differentiating customer service from customer experience or perceptions of the utility overall. For example, over a third of consumers are very concerned about the potential for rising electricity prices. Unless customer care is able to address that concern, then the overall value perception of the utility will suffer.
“As the utility industry evaluates the role of the customer in its business strategy, it must focus on the 30 percent of customers who do not feel that they are being given adequate choices or information,” stated Nat Treadway, Managing Partner of DEFG LLC. “Customer expectations are rising, and electric providers must rise to the occasion. How do we offer a more targeted, segmented approach that leads to differentiated product offerings and services for the 30 percent of customers who are not satisfied?”