Navigating Rate Hikes While Preserving Customer Satisfaction

While most of us are fortunate enough to find refuge in our homes from extreme weather conditions like heat waves and snowstorms, the immediate relief we experience once we step inside comes at a cost. Electricity prices in the U.S. are rising due to significant (and much needed) infrastructure investments, improvements in grid resilience, the integration of cleaner energy sources, and growing demand. In 2022, prices saw a year-over-year surge of 10.7%, marking the steepest increase since the beginning of the century. Though rate hikes are necessary for ensuring reliable, sustainable energy for the future, customer satisfaction often suffers when consumers get hit where it hurts - in their pocketbooks. 

Electricity Rate Hikes Dim Satisfaction Ratings

According to the J.D. Power 2023 Electric Utility Residential Customer Satisfaction Study, overall satisfaction among electric utility residential customers declined 18 points to 713 (on a 1,000-point scale) from a year ago, marking the third consecutive year of decreasing satisfaction. The average monthly electric utility bill has reached $178 in the U.S., leading to a 33-point drop in price satisfaction to 627. Undoubtedly contributing to this dissatisfaction is that more than half (58%) of electric utility customers say they were unaware of rate increases. Which is a fair reaction - who likes to receive a higher-than-expected bill?

In the following sections, we outline five strategies designed to assist utility companies in rebuilding and enhancing customer satisfaction levels, even in the face of necessary rate increases. 

Strategy 1: Be Transparent About Rate Increases

Transparency about pricing is key to maintaining customer satisfaction. Though rising bills are never welcome news, knowing it’s coming and being able to prepare accordingly helps soften the blow. As does educating customers on why rates are going up. Having a why behind it lets customers know it isn’t an arbitrary increase.  Maintaining customer satisfaction hinges on clear communication about rate changes, providing ample notice, and offering thorough explanations to build understanding and trust.

Here is a list of potential channels you can consider for these communications:

• Inserts added to the envelopes of your printed bills
• Onserts printed on the pages following the bill can be added to both physical and e-bills 
• Notifications on your mobile app
• Emails or text messages 
• Alerts and banners on your customer portal website
• Direct mail letters 
• QR codes can be added to all messaging, pointing to where customers can find more comprehensive information
• Webinars or video content posted on your website or YouTube channel
• Community meetings 
• Social media platforms
• Messages played in your IVR with options to learn more and enroll in energy assistance programs

Strategy 2: Deliver Energy Efficiency and Energy Assistance Programs to Customers

If you already have energy efficiency programs, you’re in good shape - but be sure your customers know about them with a comprehensive education campaign. If you don’t, consider developing tailored programs with clear objectives and compelling incentives. For instance, successful initiatives implemented by KUBRA clients include energy audits and rebates for efficient appliances and HVAC systems. 

Energy Assistance programs available in your region should be promoted to low-income customers needing support and subsidies to help alleviate the burden of utility costs. You can foster customer participation and understanding of these programs through proactive outreach and continuous dialogue, using the channels described in the first strategy.

Strategy 3: Stay Focused on Customer Service Quality

Keep your eye on the ball when it comes to the quality of your customer service because it is essential in driving customer satisfaction. Investing in exceptional customer service helps businesses cultivate loyalty and ensure that every interaction adds value to the customer experience. By training your staff to handle billing concerns and other high-priority customer inquiries effectively, you empower your CSRs and ensure customers feel their concerns are a top priority. 

Here are practical steps to enhance your customer service experience:

• Implement Regular Training: Conduct training sessions that cover various scenarios your customer service representatives (CSRs) may encounter. These sessions should include role-playing exercises to simulate real-life interactions and develop empathy and problem-solving skills.
• Develop a Knowledge Base: Create detailed documentation on your products and services that your staff can refer to. This knowledge base should be continuously updated and easily accessible, helping your CSRs provide accurate information quickly.
• Use Customer Feedback: Regularly collect and analyze customer feedback. Implement changes based on this data and clearly communicate any improvements back to customers, showing that you value and act on their opinions.
• Set Clear Service Standards: Define and communicate clear customer service standards to ensure consistent quality. For instance, set a policy that all emails should be answered within 24 hours and all phone calls should be picked up within three rings.
• Offer IVR Payments: Ensure that your payment provider supports the IVR (Interactive Voice Response) payment channel. This key feature allows for secure and efficient phone-based transactions, enabling customers to make payments with ease 24/7. By having Natural Language IVR payments in place, your customer service team can focus their expertise on solving more complex and nuanced customer issues.

Strategy 4: Invest in Community Engagement Initiatives

Getting active in your community through sponsorship and participation in local events is not only a gesture of goodwill but also an essential strategy for public relations and networking. It shows investment and interest in the area, helps build bridges, and fosters relationships with the residents in your service area. Taking the initiative to create workshops or seminars highlighting the importance of energy conservation and educating the public through conservation tips will help position your utility as a sustainability leader. Collaborating with community organizations, schools, and libraries can further expand your reach, increasing engagement and showcasing your contributions to the community. 

Here are a few ideas to investigate:

• Establish educational partnerships with schools to promote STEM learning with a focus on energy or environmental science.
• Participate in local fairs and festivals with interactive booths that educate on utility services and smart energy usage.
• Deliver workshops at local libraries on topics such as energy-saving technologies and smart home integrations.
• Facilitate emergency preparedness seminars to help the communities stay safe and knowledgeable in the event of a utility-related emergency. 
• Produce handy guides and checklists for energy efficiency that customers can pick up at community centers or download from the utility website.
• Connect with local non-profit organizations who provide services to low income residents so they can advertise energy assistance programs. 

Strategy 5: Leverage New Technologies for Customer Engagement

If your utility still needs to get a notification management system for personalized communications or a mobile app, 2024 may be the time to investigate these things. KUBRA’s NotifiⓇ, an alerts and preference management platform, automatically sends messages based on a customer's subscription preferences. Customers are provided with customized updates about their accounts, transactions, service disruptions, and alerts for usage limits established by the utility or the customers themselves, all in their channel of choice. The ability to interact with their utility on their terms as well as self-serve as needed is a great way to increase the happiness of today’s digital consumers.

KUBRA iMobile^TM Apps offer a seamless way for your customers to manage their accounts on the go. Combining the full functionality of your website with mobile-specific features such as biometrics and push notifications, these apps provide an enhanced user experience. With options for bill payment, paperless billing enrollment, outage reporting, and energy savings tips, our modular platform ensures personalized and convenient service. Plus, integration with news and social media keeps customers informed and connected.

Informed and Engaged Customers Are Happier Customers

Adopting these strategies can result in customers who are more knowledgeable and empowered to make energy-efficient choices and modify their behavior, which may decrease demand and cut down on their monthly bills. Supply issues and higher operating costs are turning up the heat on utilities to raise their rates. These approaches are a call to action for utilities to elevate customer satisfaction to a core company value and to create a culture that prioritizes the consumer experience. This clears a path forward for utilities to improve customer satisfaction in the face of higher energy rates.

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