By Tina Casey
Utility companies began practicing corporate social responsibility long before the movement took hold in other economic sectors. That’s partly due to the legal and social obligations that come with being a regulated monopoly, and partly due to the localized nature of water, gas and electricity service.
There are important differences between utilities and other companies, but one area in common is the need to satisfy customers and build loyalty. Practically any business, from the corner laundromat to a global brand, can gain important insights by looking at the elements that factor into customer satisfaction.
For a closer look at the topic, CR Magazine spoke with Andrew Heath, Senior Director for Utilities Practice at the leading market research firm JD Power.
(The following remarks have been edited lightly for flow.)
Tina Casey: How do you measure customer satisfaction?
Andrew Heath: For utilities, there are six factors in customer satisfaction: power quality, reliability, billing and payments, communication, customer service, and then also corporate citizenship.
These factors all have a direct impact on customer satisfaction. If you get a higher performance in any one of those areas, you’re going to get higher performance in overall satisfaction.
Obviously the biggest and most important area when you think about electric service is going to be power quality and reliability. The biggest thing that customers care about is having their utility keep the lights on.
Whether it’s water, natural gas or electricity — safe, affordable, reliable utility service is what people are after.
TC: How does corporate citizenship impact customer satisfaction?
AH: Corporate citizenship is not the only driver, but it is an important driver in customer satisfaction.
In particular, we look at how well people remember or know about a company’s corporate citizenship and community engagement.
Questions examine respondent’s awareness of the company’s performance. For example is the respondent aware of the work the utility does to increase the safety of the system, things they may do to help customers become energy efficient or conserve energy, things they do directly to plan ahead, things they do to impact the environment?
We even ask a question, “Do you know what your utility does to protect or restore wildlife?” One of the things that is most influential is whether or not the customer is aware of what a company is doing to protect wildlife within its service territory.
I can think of examples where a utility has had wildlife caught in its infrastructure. For example at one utility, workers rescued a baby otter caught in some water infrastructure. People hear these stories and they reflect positively on the company.
The organization did a good job getting the word out about their wildlife efforts. That positively impacted their corporate citizenship score, which then impacted their overall customer satisfaction score.
There are other instances where it’s very proactive. For example, a lot of of electric companies will do things to help birds nesting. A number of utilities have webcams of birds of prey nesting at their power stations, things of that sort.
It’s a case of ‘are people aware of what utilities do to help wildlife and protect the natural environment?’ That does have an impact on customer satisfaction.
TC: How can companies improve? There are definitely opportunities for organizations to do a better job of communicating what they’re doing.
The highest awareness level we have is 40 percent. Forty percent of people said they were aware of that work. The average is about 14 percent. There is a lot of room to improve with customer awareness.
TC: Is it more important to engage locally or globally?
Each utility has a very specific local footprint. They are serving a particular town or community. The way customers think about that is, if you’ve got the privilege of being a monopoly serving a community, then it’s important that you return that favor by being a good corporate citizen and doing good things for the community that you’re serving.
Some of the drivers of being a good citizen for utilities also apply to national brands quite clearly. They apply even more so when you’re a local brand. People think of your brand as a member of the community in relation to their friends and their families.
At the end of the day, people value when businesses behave well and respond well, and that might be even more satisfying than the service they get.
Examples in Action
For utilities, good citizenship has a significant impact on the level of satisfaction. Heath made it clear that wildlife conservation is part of a much broader approach to corporate social responsibility that fosters customer satisfaction.
Coincidentally, though, on the day this interview was conducted, the North Carolina power companyDuke Energy announced some company news that underscores the importance of tending to every element that drives customer satisfaction.
In a press release, Duke described how its Top of the World wind farm in Wyoming has been working with the company IdentiFlight to fine-tune a high-tech system for preventing wind turbines from injuring or killing eagles and other birds.
The new equipment is part of an elaborate program of raptor protection strategies at the wind farm, developed after a 2013 legal case against Duke over bird deaths. Notably, the good citizenship expressed in the program is not simply a statement of caring. It consists of concrete, measurable steps, and its effectiveness will be clear and quantifiable.
If the system improves bird safety at the site, it could have a far-reaching impact across the wind energy industry, globally as well as in the US, and it will also reflect positively on companies that rely on wind energy to enhance their corporate social responsibility profile.