Leveraging energy efficiency programs to improve scores for utilities
Utilities recognize that their customers like the rebates and incentives they receive through energy efficiency programs—but what some utilities don’t know is that energy efficiency programs play a critical role in overall customer satisfaction scores.
By offering options that help reduce or manage energy costs, customers develop a better perception of the utility which, in turn, can result in improved J.D. Power scores. For utilities that want to do better, the key may lie within their energy efficiency programs.
For example, if energy costs are high during winter, customers may be struggling to pay their heating bills. Utilities should acknowledge to customers that times are tough but financial assistance and programs to help reduce energy use are available—from programs to better seal and insulate your home to the replacement of aging heating and cooling equipment.
Since it’s expensive to install residential energy savings measures, offering rebates and incentives to make it more affordable can help to offset the negative messaging around pricing and can foster goodwill with customers.
In a transaction that’s mutually beneficial, customers save on costs through energy efficiency programs, while the utility has an opportunity to further its own business goals, including increasing critical objectives like customer satisfaction.
The five J.D. Power indexes
The J.D. Power customer satisfaction survey is well-known and heavily utilized within the utility industry. It measures and compares large and midsize utilities across four U.S. geographic regions: East, Midwest, South, and West. The survey examines and evaluates five factors:
- Power quality and reliability
- Price
- Billing and payment
- Corporate citizenship
- Communications
Customer energy efficiency programs play an important role in several of these key indices, including price, corporate citizenship, and communications. Questions in these survey areas focus on customer awareness and understanding of ways in which the utility is helping customers manage energy costs and protecting the environment. Energy efficiency programs provide an opportunity for utilities to communicate and demonstrate these customer benefits that can help bolster customer satisfaction scores in these areas.
The benefits of increased customer happiness
Positive customer satisfaction scores in a survey like J.D. Power can also be a powerful, strategic tool for energy efficiency program staff, especially those marketing these types of programs. Customer loyalty and satisfaction research shows customers who have a positive impression of a utility can be more likely to try new utility offers and forgive utility mistakes—characteristics that are important to utilities as they embark upon new initiatives around electrification, electric vehicles, and equity initiatives.
It also can reduce costs to market new technology or programs to satisfied customers because the utility’s brand already has a positive reputation. This happy brand experience nurtures customer trust, which plays a critical role in enabling utilities to introduce advanced technologies and new programs and incentives.
Energy efficiency programs also allow the customer to play a more interactive role with the utility—shifting away from just paying the bill to becoming a partner in managing energy use. As engagement increases, so do satisfaction levels.
In fact, the numbers speak for themselves as shown by a 2021 University of Indiana study on U.S. utility customer satisfaction and increased profitability:
Limitations
Although the J.D. Power survey has some limitations, it is still the most widely used customer satisfaction survey in the industry. By normalizing utility customer satisfaction measurements across the country, it has become a type of benchmark for performance year over year.
Critics of this survey have noted the lack of granularity in survey findings, small sample sizes, and the inability to tie findings directly to customer level data. This can limit a utility’s ability to extrapolate to the larger customer population or learn more from an unhappy customer.
Regardless of which survey instrument a utility chooses to use to measure and track customer satisfaction, the case remains that utilities that invest in energy efficiency have a powerful tool at their disposal to increase customer satisfaction and loyalty.
Strategies for improving customer satisfaction scores
The mechanism for the relationship between customer satisfaction and profit in the utility market hinges on reducing energy efficiency program costs and one way to do that is by having happier customers.
To improve your customer satisfaction scores now and in the future, consider the following four recommendations:
- Take a strategic approach to J.D. Power or any customer satisfaction survey by using it as an instrument to guide and modify ongoing and future energy efficiency marketing and communications.
- Recognize the importance of energy efficiency marketing and communications in influencing customer perceptions and incorporate this understanding into the development of marketing campaigns, particularly if in addition to energy savings a utility is looking to improve its customer satisfaction scores.
- Consider specific program strategies and tactics to improve customer perception. This could look like offering different pricing options or clean energy programs as well as emphasizing the environmental and “non-energy” benefits of energy efficiency programs, such as improved home comfort, business productivity, home value, or competitiveness.
- Mitigate the limitations of the J.D. Power survey by using complementary benchmarking tools and shadow surveys that tie directly to customer-level data to expand on identified concerns and possible solutions. Dig into the specifics of your campaigns and programs to provide a more granular view that provides actionable insights. Our customer experience team has created an index that leverages analytics tools to create continuous visibility and gather valuable insights into how customers are experiencing programs at each stage of interaction.
Future success depends on customer satisfaction
By meeting and exceeding customer expectations for engagement and satisfaction, utilities can both improve their J.D. Power scores and establish a base of happy customers. That will help the utility reduce program costs, meet program goals, and position itself for future customer program innovation—making it a win-win for everyone.
