Playing the Game: J.D. Power and Utilities

Playing the Game: J.D. Power and Utilities

Customer satisfaction is a nebulous concept. And it’s particularly challenging for a sector that doesn’t exactly “feel the love” from consumers. According to an August 2013 Gallup poll, Americans rank the electric and gas utilities industry in the bottom tier of all industries, with an overall net sentiment score of -1, with 39% rating the sector negatively – just ahead of the legal industry. (At least that’s something.)

Over the years, we’ve worked with a lot of utilities. A few have their own customer satisfaction measurement and tracking tools, but most live and die by their J.D. Power scores. Utilities cling to J.D. Power (JDP) because it offers a standardized comparison to other utilities – a concept I struggle to fathom, since most utilities are monopolies, and never compete. (Few customers could take a look at utility scores and move their energy business, based on that information.) But executive teams, boards of directors and investors care about JDP. It’s a performance metric that has been embraced by the industry.

So utilities who want to improve their JDP scores must learn how to play the game … and it is a game.

First, you have to think strategically about who takes the survey. JDP shifted to an online-only format a couple of years ago. Who answers online surveys? People who are 25–64 years old – particularly social media aficionados who don’t mind “sharing” online. Dig deeply into almost any utility’s JDP demographic sample distribution and you’ll likely see a woeful under-representation of young Millennials and (often) seniors. The first group rarely checks personal email, and the second is less likely to have a computer/high-speed Internet in their home and/or feel comfortable sharing information online.

Who else is usually missing? Less-educated and low-income people. Who usually over-participates? Really well-educated people.

So while JDP might not offer a very representative sample of your customer base, it’s clear that there is a very specific target audience you should focus on if you want to try to improve scores (and it goes without saying that social media is your friend).

Next, you should think strategically about what to say. While JDP is basically about message recall, it’s critical to realize that the impact that communications can have on scores is actually pretty small. Because based on the scoring system (below), it’s quite clear that rule number one is DON’T HAVE OUTAGES! And rule number two is DON’T INCREASE RATES!

Quite frankly, if you break rule number one and rule number two in the same survey period, you’re completely sunk. There’s not much you can say or do to salvage JDP when those two components make up 50% of the score.

And to be honest, isn’t that what satisfaction with a utility is about, at its core? People want their lights to come on when they flip their switches, and they don’t want to feel like they’re being completely abused when they open their bills.

So let’s say you’re one of the (few) lucky utilities that’s had decent weather, and you’re not in the midst of a rate case. What should you say?

The diagram above shows that 26% of the score can actually be influenced by communications initiatives – affected by responses to communications and corporate citizenship questions. You can see that there are specific messages that customers should be able to recall.  For example, you should be talking about your efforts to protect the environment and ensure a reliable future energy supply.

But perhaps the best strategy to improve JDP is to promote energy efficiency programs. We’ve seen this correlation for many years in our own Energy Pulse and Utility Pulse studies. Customers who participate and/or are aware of their utility’s energy efficiency programs report significantly higher levels of satisfaction. Isn’t that great news? It’s a rare and beautiful thing when one communications initiative can help achieve two completely different goals. So make sure you’re on-air (and on social media) with energy efficiency tips and rebate offers during the next JDP survey sweep.

If you’re going to stick with JDP, you should learn how to play the game. Give me a shout if you want more coaching tips or if you’re interested in alternatives for assessing customer sentiment.

About the Author

Lee Ann Head

Lee Ann is a former contributor to Shelton Insights.

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