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Study: Customer Service Is Key in Courting Retail Energy Prospects

August 19, 2015 By Cheryl Kaften

With fewer consumers shopping around for better electricity prices, retail electric providers (REPs) must focus on enhancing the entire customer experience – including ease of enrollment and frequent communications – in order to differentiate their brands and create greater satisfaction with their services. Those are the top-line findings of the 2015 Retail Electric Provider Residential Customer Satisfaction Study released on August 12 by J.D. Power.

Overall, only 23 percent of customers contacted said that they planned to switch from their local electric distribution company during the three months following the survey this year. Most customers said they avoided switching for one of three reasons:  the bill savings were not impressive enough (44 percent); they were satisfied with their present level of service (37 percent); or they were concerned about getting worse service (26 percent).

“In this environment, it is even more vital to differentiate the customer experience on something other than price to increase retention and improve market share,” commented Jeff Conklin, senior director of the energy practice at J.D. Power.

Now in its third consecutive year of production, the study examined satisfaction among the residential customers of 86 retail electric providers in nine states, calculated on a 1,000-point scale. Overall, it ranked the retail providers across five key factors: price; communications; corporate citizenship; enrollment/renewal; and customer service. In Texas, the team investigated another key dynamic – billing and payment.

By a significant margin, Texas led the pack in customer satisfaction this year, with a score of 715. Pennsylvania came in number two, with a score 664. Taken as a whole, the eight states excluding Texas averaged 632, an improvement of 6 points over the previous results.

The study found that enrollment is the key area in which providers can improve their reputations. Among customers surveyed, J.D. Power said 59 percent preferred enrolling online – yet only 37 percent who selected a new supplier within the 12 months prior to the survey enrolled via the provider website. To satisfy prospective customers, retailers should upgrade their websites to make them intuitive and easy to use, from the first visit onward.

Initiating follow-up communications with new prospects—about price/services offered and contract terms — was identified as another opportunity for retail providers to shine, as well as to increase satisfaction. Among newly enrolled customers, approval was significantly higher when providers follow up versus when they did not (740 versus 597, respectively).

Which specific retailers seemed to have the right idea? The customer service specialists were as follows in each state:

Connecticut: Ambit Energy came in with a score of 689, and excelled at price and enrollment/renewal factors.

Illinois: AEP Energy achieved a score of 724, performing particularly well in the price, enrollment/renewal and communications categories.

Maryland: Maryland was not ranked this year due to insufficient sample.

Massachusetts: Viridian Energy led the industry in Massachusetts, with a score of 682, and stood out in the customer service area.

New Jersey: New Jersey Gas & Electric garnered a score of 657 and surpassed many others in the communications factor.

New York: Green Mountain Energy attained a score of 684 and performed particularly well in the communications, corporate citizenship and customer service factors.

Ohio: IGS Energy ranked at 642 and scored high in the price and customer service factors.

Pennsylvania: ConEdison Solutions achieved a score of 698 and performed particularly well in pricing.

Texas: Champion Energy Services scored 766 and excelled in the billing/payment and communications factors.

Finally, of the respondents who said that the potential bill savings weren’t big enough to switch, more than one quarter (28 percent) said they would consider switching if they knew they would save up to $20 a month.

The 2015 Retail Electric Provider Residential Customer Satisfaction Study is based on responses from 21,744 electric retail residential customers of the 86 ranked retail electric providers in nine states regarding their experiences with their retail electric provider. Online interviews were conducted August 2014 through June 2015.

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