Information About Rate Changes Vital To Customer Satisfaction With Utility Suppliers: JD Power and Associates

Published: 05-Nov-2009

A study by JD Power and Associates revealed that, amid high energy prices in the UK, proactive communication to customers about price changes and managing their energy costs is important to overall customer satisfaction with utility suppliers.

The 2009 UK Electricity and Gas Supplier Customer Satisfaction Study finds that monthly customer-reported bill amounts have increased notably in 2009, compared with 2008. Monthly electricity bills in 2009 average GBP50.34, a 4% higher than in 2008. For gas customers, monthly bills in 2009 average GBP50.08, an increase of 8% from 2008.

The study also finds that satisfaction with the supplier's price and value declines among customers who indicate they are aware that their gas or electric company raised prices within the past 12 months, compared with the industry average. However, this decline in satisfaction may be mitigated if customers are informed in advance of rate increases by their supplier.

Despite the positive effect that advance notification of price increases by suppliers has upon satisfaction, approximately one-half of customers report having received these advance notices. Among electricity customers who say their supplier increased prices within the past 12 months, 54% indicate that their supplier notified them in advance. A lower percentage of gas customers (48%) say the same.

In addition, among electricity customers who say they are aware of price reductions instituted by their supplier, satisfaction with price and value averages 522 on a 1,000-point scale, compared with 476 among customers who indicate no awareness. Among gas customers, satisfaction scores are 486 and 470, respectively.

Gordon Shields, director of proprietary and service industries research at JD Power and Associates, said: "Due to current economic conditions and relatively high utility rates, suppliers that perform highly are perceived as being particularly helpful in assisting customers with finding the best price options and reducing their bills.

"However, it is particularly notable that overall satisfaction with utility suppliers in the UK is considerably lower than that of other service industries, which indicates the need for additional improvement within the utility market."

The study examined customer satisfaction with electricity and gas utility suppliers by examining six factors. For electricity suppliers, the factors are price and value, customer service, power quality and reliability, environmental responsibility, billing and payment, and meter reading. For gas suppliers, the factors are price and value, supply quality and reliability, customer service, environmental responsibility, billing and payment, and meter reading.

The study also found that informing customers of their supplier's environmental responsibility efforts has a positive impact on satisfaction. Overall satisfaction averages more than 90 index points higher among customers who indicate they are aware of their supplier's efforts to improve their impact on the environment or their supplier's energy conservation plans, compared with customers who indicate they are not aware of their supplier's initiatives in these areas.

The study, which was fielded in August 2009, is based on 2,845 responses from domestic electricity customers and 2,849 responses from domestic gas customers throughout the UK.

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