The Trust Factor: Building Better Utility-Customer Relationships

Explore the dynamics of trust and respect in utility customer relationships with insights from Chartwell Inc.’s 2024 Residential Consumer Survey. In this enlightening discussion, we delve into how utilities can foster stronger customer connections, drive engagement through digital channels, and tackle the pressing financial challenges households face today. From generational differences in respect perception to innovative support programs for vulnerable customers, this episode is packed with actionable strategies and thought-provoking trends.

Listen to the full podcast episode or read the transcript below to uncover how utilities can build trust and loyalty to enhance customer experiences now and in the future. 

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The transcript has been edited for clarity and readability while maintaining the original content and intent of the speakers.

Shaun Jackson:

Welcome to Experience Better: The CX Podcast. I'm your host, Shaun Jackson, Senior Vice President of Marketing at KUBRA. Today, we are thrilled to have two folks from Chartwell Inc. as our guests: Steve Waters, Director of Councils, and Casey Collins, Senior Research Analyst. At KUBRA, we're huge fans of what Chartwell does. We love your research, and in today's episode, we will dive into insights from Chartwell's 2024 Residential Consumer Survey. At our most recent iConnect Customer Conference, we were lucky enough to have Steve present lessons from this survey to our attendees, and it was very well received. So, we're looking forward to sharing that with a new audience today. Welcome, Steve and Casey.

Steve Waters:

Thank you, Shaun. It's great to be here in the KUBRAverse.

Casey Collins:

Thank you so much, Shaun. We're thrilled to be here.

The Importance of Trust & Respect in Utility Customer Relationships

Shaun:

The theme of today's podcast is important—trust and respect in utility customer relationships. I'd love to start by hearing from both of you, what you think about the role that respect and trust play based on Chartwell's consumer survey.

Steve:

Thank you, Shaun. Our consumer survey asks consumers if they believe their utility respects them, as well as their budget, time, values, and opinions. We do that because we think respect helps create and build trust, which offers utilities some protection in times of crisis, like an outage or controversies around rate increases. 

It also allows utilities to cross-sell or upsell products, recruit and retain a loyal workforce, attract investors, build customer loyalty in the face of competition, and create advocates. Trust unlocks a whole cornucopia of opportunities for utilities. 

Many utilities say they put the customer at the center of everything. Practically, showing respect means respecting customers' time, budget, preferences, and, increasingly for younger customers, their values. This can be done by involving them in processes and using design thinking to ensure product designs incorporate customer needs, wants, feelings, and beliefs. You can collect feedback through surveys, focus groups, and complaints.

Respect for time means making processes efficient, particularly for problem resolution. Contact centers can offer callbacks or virtual holds. You want to make service fast and easy, particularly with self-service tools, plus proactive communications like outage and bill alerts.

Respect for budget means managing internal costs to keep them low, filing judicial rate case filings, and sharing ways customers can save money—one of the top things customers want. This includes offering programs to promote energy efficiency, manage bills, and provide assistance.

While we don't specifically ask if preferences are respected, we do ask about preferred communication channels and what they want to hear from their utility. Some want minimal contact, while others are open to a more significant relationship. You can respect preferences by providing service through multiple channels and understanding channel choice through preference centers.

While utilities must serve all customers and face risks of taking sides on controversial issues, a growing number of customers, particularly younger ones, want companies they do business with to reflect their values on sustainability and equity.

Shaun:

That was great, Steve. I was taking notes of things that resonated with me. The first was about complaints - it's so true that value can come when customers complain because, at that moment, they're very passionate about sharing feedback. Saving money is always at the top of my mind, and as you mentioned, sustainability and equity are topics we’ll discuss later.

From what you've shared, respect is key across every area of client interaction. Something interesting from your research is that younger generations feel more respected by utilities than older generations. What specific actions do you think utilities are taking that resonate with younger customers?

Generational Differences in Customer Respect

Casey:

When we talk about respect, we see a 20 percentage point difference. Younger customers report feeling respected as individuals—with their budget, time, values, and opinions—at a much higher rate than Gen X or Boomer customers.

We have two hypotheses. 

1. First is their ability and willingness to engage digitally with their utility. There's less friction for Gen Z and millennial consumers than older generations engaging digitally. Easy self-service boosts satisfaction for all customer groups, significantly expanding options available to customers under 50.
2. Our second hypothesis relates to how utilities communicate about sustainability and energy efficiency. Gen Z and millennial consumers are slightly more likely to be aware of their utility's environmental impact, like carbon footprint or clean energy efforts. However, Gen X and baby boomers showed greater awareness of utility efforts to promote energy efficiency and sustainability.

The terminology matters—whether we convey sustainability versus clean energy or energy efficiency. While these work toward mutual goals, customers respond differently to terms based on demographics. This can impact how they view and trust their utility during the clean energy transition.

Other factors include younger consumers' shorter utility histories, higher likelihood of being renters rather than homeowners, different perspectives on government roles in clean energy transition versus utility responsibilities, and higher satisfaction with other service providers, which influences utility relationships.

Shaun:

Your answer makes sense, particularly regarding word choice, which is important. When earning long-term trust and respect, using the right words and following through matters, especially to younger generations. Your point about younger customers using digital options resonates because it reduces friction. At KUBRA, we see reduced friction as a major driver for customers adopting digital channels and payment options.

Let's discuss the pressing issue of financial concerns. The survey data shows significant customer worries about bill payments. Where are customers financially, and how is this impacting their utility relationships?

Tackling Financial Concerns for Utility Customers

Casey:

The data shows significant financial stress—around 30-31% of consumers frequently worry about paying their utility bills. About 38% indicate their household's economic situation has worsened over the past 12 months. This appears to be a long-term trend, as financial stress typically isn't quickly resolved.

Financial stress isn't limited to low-income customers. About 23% of low-income customers received financial assistance or payment terms from their utility within 12 months, while 17% of high-income customers (household income over $100,000) also received assistance.

According to the American Council for an Energy-Efficient Economy (ACEEE), one in four low-income households spend more than 15% of their income on energy bills, compared to the U.S. average of 6%.

Shaun:

The 17% of high-income households needing assistance is shocking and heartbreaking. While changing what's causing these hardships is difficult, what actionable measures can utilities take to support financially stressed households?

Steve:

Chartwell has insights from both utility and consumer perspectives. Two years ago, we launched our Vulnerable Customer Leadership Council, named explicitly for "vulnerable" rather than just "low-income" customers since vulnerability can quickly affect anyone.

Core principles include identifying vulnerable or struggling customers through sophisticated propensity modeling and machine learning to predict risk. Understanding customers through research is crucial - panels, focus groups, and in-depth interviews help know customers collectively and individually.

Utilities should offer innovative payment solutions and flexible arrangements. For example, Enmax in Canada won our silver Best Practice Award for their load limiter program, which installs demand response equipment to limit rather than fully disconnect service for non-payment.

Building partnerships with community organizations and connecting customers to utility, state, and federal assistance such as Low-Income Home Energy Assistance Program (LIHEAP) funds are important, as are programs allowing employees or customers to gift energy. Examining billing, payment, and assistance processes to identify and fix pain points is crucial, along with providing culturally sensitive, multilingual support where needed.

Baltimore Gas and Electric won last year's Gold Best Practice Award for its program, empowering care center representatives to help customers apply for LIHEAP and utility funding. The company also created the BG Assistance Finder online tool and expanded community partnerships.

Casey:

In 2024, we asked consumers how they would prioritize engaging vulnerable customers if they ran their utility. Their top three priorities were providing more bill payment options, increasing utility-based assistance funds, and taking more steps to identify and connect vulnerable customers to assistance.

We see variation among income groups in how they perceive utility support. About 24% of Low-Moderate Income (LMI) customers feel their utility isn't doing enough to serve vulnerable customers, compared to 13% of high-income customers.

Shaun:

There's always room for improvement. These are important takeaways for our utility audience. I found the load-limiting plan example particularly interesting and new.

We see that participation in energy programs builds trust and respect and can help with cost-effectiveness. However, enrollment numbers remain low. How should utilities address the awareness and enrollment gap in energy programs

Increasing Participation in Energy Programs

Casey:

Trust/respect and program enrollment have a bidirectional relationship. While we can't definitively say which more strongly influences the other, they're positively correlated. Those who feel respected and participate in utility programs show greater satisfaction and engagement.

Communication is key, particularly in raising awareness of available programs. About 46% of consumers didn't know if their utility offered energy efficiency programs. Participation rates are low—9-10% for LMI customers and 21% for higher-income customers. The awareness gap is more significant for LMI customers, but they're more likely to participate when they see the benefit once they're aware.

Steve:

Interestingly, awareness of programs boosts customer satisfaction even if customers don't participate. Knowing the utility offers services like apps or energy efficiency programs has a positive effect.

Only 22% of those aware but not participating lack interest. About 29% don't participate because they don't see benefits or find it too expensive, particularly regarding upfront costs for home improvements. Another 27% find enrollment too difficult or confusing.

The ACEEE research shows structural impediments and psychological barriers, such as stigma or middle-income customers' unwillingness to take resources from others. Success requires raising awareness, simplifying enrollment, and addressing upfront cost barriers.

Shaun:

It’s ironic, but it makes sense that the higher income bracket can make that upfront investment and stay ahead of the game. When there's uncertainty or financial struggles, that worry can weigh heavily.

This highlights the importance of education and awareness, which are key in many ways. Competing with a vast number of messages is always a challenge and can feel like a conundrum.

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We had such an insightful conversation with Steve and Casey from Chartwell that we couldn’t fit it all into just one episode! In part two of this discussion, we’ll explore strategies for effective communication during times of crisis, tips for boosting participation in environmental programs, and much more. Stay tuned!