Meeting the Energy Needs of Large Business Customers: Results from a large market research study
To answer this question E Source conducted the 2009 Gap and Priority Benchmark survey of large businesses throughout the U.S. and Canada. After a 40 percent completion rate, 762 energy and facility managers had completed the survey, providing a candid view of the services they expect from their utility and utility account representatives.
Improving Utility Satisfaction
Overall large business customers are fairly happy with their utilities, providing an average satisfaction rating of 8.2 out of 10. However there was considerable variation with utility averages ranging from below 7 to above 9. There are several ways to decide how to focus your efforts toward areas that will give the biggest results, and we will focus on three:
- Asking large business customers what they care about.
- Doing a regression analysis to determine how utility performance in a number of areas actually impacts satisfaction.
- Conduct a gap analysis to align your performance with your customers expectations.
Focus on issues that large businesses care strongly about. One straightforward approach is simply to ask large business customers what is important to them. Since business drivers do not change much across regions this national survey provides results that are likely to accurately describe the needs of your large business customers.
Figure 1 shows a number of utility-related attributes, with those that business customers rated as most important on a 10-point scale at the top. Reliability is number one, followed closely by effective communications if there is a reliability problem. Also clustered near the top of the list are issues related to the integrity of the utility: being trustworthy, standing behind commitments, and treating customers fairly.
Most of the attributes we asked about were considered important by large business customers. This was expected because less pressing issues weren't included in the survey. A notable exception is that having a utility be involved in the community was notably low on customers' list of important issues (an average score of 7.5).
Figure 1 -- Importance of Utility Attributes to Large Business Customers
Concentrate on attributes that have the largest impact on satisfaction. We modeled satisfaction to determine the impact of utilities' performance in each area. The advantage of the regression model is that is allows us to see how changes in each attribute relate to changes in overall satisfaction. While the average importance rating was very high for nearly every attribute, regression analysis allows us to focus on the areas that really get results.
We included in the model includes only attributes that had a statistically significant effect on satisfaction (at the 95 percent level of confidence).
Figure 2 shows that large business customers' perception of being treated fairly by their utility has the largest impact on their satisfaction. At the top of Figure 2, the model coefficient of .29 indicates that each one point increase in customer's perception of being treated fairly (remember the scale goes from 1-10) predicts a .29 increase in customer satisfaction (on the same 1-10 scale). Similarly, the rest of the coefficients indicate the boost in customer satisfaction predicted to go along with single point improvements in performance ratings.
Figure 2 -- Impacts of Utility Performance on Large Business Customer Satisfaction
There are two attributes in this model of utility satisfaction that relate to the role of account representatives. The first, having an account representative who is attentive to the needs of business customers, will result in just under a tenth of a point boost in satisfaction with the utility if their performance rating is increased by one point. More subtly, "providing accurate and timely information" falls on both the utility and account representative shoulders and is also a significant determinant of satisfaction. Overall, account representative performance accounts for approximately 15 percent of changes with customer satisfaction with their utility overall.
Boosting customer satisfaction is hard work. In fact, our market research shows that improving performance on the 7 attributes shown in Figure 2 by one point each will result in slightly less than 1 point in overall satisfaction with the utility. The good news is that sizable improvement is possible if you effectively focus your efforts on the right customers.
Focus resources with a gap analysis. The essence of a gap analysis is to identify where the utility is falling short of expectations.
Across the industry, the areas where utilities were lagging the furthest behind large business customer expectations were in:
- Working to keep energy prices down;
- Effectively communicating during emergencies; and
- Standing behind its commitments.
Improving Account Representative Satisfaction
E Source took a similar approach to examining what customers wanted from their account representatives.
What do large business customers want in an account representative? Figure 3 shows the average importance rating for each account rep-related attribute. From the perspective of large business customers, the most important attributes for an account representative to have fall into the categories of communicating effectively and being a good business partner. The survey included only attributes that we believed to be important, and, not surprisingly, the lowest average score was a high 8.6 on a scale of 1 to 10.
Figure 3 - Importance of Account Representative Attributes to Large Business Customers
Start with areas that have the biggest impact on satisfaction. Results from the regression model explaining satisfaction with utility account representatives shows that being attentive and trustworthy are the largest predictors of overall satisfaction (Figure 4). A one point rise in these attributes increases satisfaction with account representatives by one quarter and one fifth of a point, respectively.
Figure 4 - Impacts of Account Representative Performance on Large Business Customer Satisfaction
An area that deserves more discussion is the number of times each year large business customers should be visited onsite by their account representative. The greatest rises in satisfaction come from increasing visits up to the number that customers claim to want, while satisfaction rises more gradually after that.
For the sake of efficiently allocating your time it seems that meeting, rather than exceeding, expectations for onsite visits may often be the best strategy.
Triage your resources with a gap analysis. Here again, industry wide data cannot substitute for your understanding of your customers and the strengths of your account management department. However seeing the larger trends may help you reflect on those areas in your department that could benefits from greater focus.
Across the industry, the largest gaps between customer expectations and account representative performance are in:
- Effectively communicating during emergencies;
- Providing resources to help business customers manage their energy costs; and
- Understanding the needs and challenges of their business.
There are a number of ways to focus your utility's efforts on the needs of your large business customers. One important method is to tap into account representatives' knowledge about their customers. Business advisory panels and focus groups are also good ways to make sure that customer input guides utility initiatives. A third approach -- the one taken with the annual Gap and Priority Benchmark Survey -- is using survey research to provide tools for customer-level account plans, account representative management, and for guiding utility initiatives.
E Source conducts the Gap & Priority Benchmark annually, and is currently welcoming utilities to join the 2010 survey. Please contact Chad Garrett at E Source if you are interested in knowing more. (303) 345-9151, chad_garrett@esource.com.
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