The utilities industry is changing rapidly.
Utilities are facing uphill infrastructure and electrification battles while customer demand for excellence is growing. In early 2023, we released an annual report that showcased key finding from our 2023 syndicated utilities studies. These findings can help your utility benchmark against the industry, identify opportunities for operational improvements, and positively impact your business outcomes. As we reach the halfway mark of the year, let’s check in on the data.
Utilities Syndicated Studies
Perfect Power is fundamental for utilities but customer expectations for perfect power are changing. Perfect Power (i.e., no brief, no lengthy interruptions) continues to decline over time, with more than half of residential customers (54%) report experiencing a brief or lengthy outage in 2024 Q2. We are seeing a continued increase in the gap between receiving perfect power and not.
The expected lift in satisfaction for delivering perfect power is more than it used to be and utilities that do an outstanding job providing quality electric power, with fewer interruptions, faster restoration, and more outage information will maximize the lift in Power Quality & Reliability and ultimately in Overall Satisfaction.
Electric utility business customers are often unhappy with the level of communication they receive from their utility. According to the most recent U.S. Electric Utility Business Customer Satisfaction StudySM data, business customers are more satisfied when they experience proactive communication from their utility regarding outage information (rather than having to initiate contact themselves).
According to 2024 U.S. Gas Utility Residential Customer Satisfaction StudySM midpoint data, only half (54%) of gas utility customers prefer natural gas for their household energy. Gas fuel preference shoots to about 2 in 3 customers (63%), when customers rate their utility 90% or higher on overall satisfaction.
As more customers have a variety of energy options at their disposal, growing customer satisfaction will determine the future success of gas utility companies.
According to the latest U.S. Gas Utility Business Customer Satisfaction StudySM data, overall satisfaction for the natural gas industry is declining. In 2023, we saw a -6 point year-over-year decline in Overall Satisfaction, driven mainly by Price, Corporate Citizenship, and Billing and Payment dissatisfaction.
Certain changes can make a big difference here: Customers seeing employees volunteering in the community can increase satisfaction by 59 index points.
The combined water and sewer bill for a typical household in the United States has increased 54.8% since 20121 amid a seemingly non-stop barrage of safety alerts, growing concerns about per- and polyfluorinated alkyl substances (PFAS) contamination and supply shortages.
This has not been a favorable environment for nurturing customer confidence in local water utilities.
According to the J.D. Power 2024 U.S. Water Utility Residential Customer Satisfaction Study,SM 41% of customers say they do not feel the water provided by their local utility is safe to drink.
1Bluefield Research, U.S. Municipal Water & Sewer: Annual Utility Rate Index 2023, https://www.bluefieldresearch.com/research/u-s-municipal-water-sewer-annual-utility-rate-index-2023/
Your utility's reputation is a part of your brand appeal.
Strong customer trust and reputations are reasons customers want to do business with their utility company. According to the most recent U.S. Utility Brand Appeal Index StudySM data, utility brands strengthen by over 100 points when customers are aware of community support efforts and about 50 points with perfect reliability.
Mark your calendars: The first ever J.D. Power U.S. Utility Brand Appeal Award Index Study award results will be announced this July.
Websites and mobile apps are the first places most customers turn when they want self-service, have questions or experience a problem with a product or service, and in many service industries—including wealth management, property and casualty insurance and retirement plans—they find what they need.
However, this is not the case with America’s electric, natural gas and water utilities.
According to the J.D. Power 2024 U.S. Utility Digital Experience Study,SM customer satisfaction with utility websites and mobile apps significantly lags that of other industries, and utilities do not appear to be doing enough to counter the trend.
The 2024 U.S. Sustainability IndexSM features new questions, including "Will my utility achieve its carbon reduction goal?" and "Is my utility better than other businesses with environment issues?"
83% of customers are now served by a utility with a carbon reduction target...but less than 20% of customers are aware of those targets. Customer awareness, engagement and advocacy for their utility's sustainability initiatives are key drivers of success for these programs.
