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Utilities providers and the customer satisfaction challenge

Source: Roy Morgan Single Source (Australia), October 2015-September 2016, n=14,416

Generally ranking in the lower reaches of Roy Morgan’s overall Scale of Customer Satisfaction, Utilities Providers do not tend to stir their customers’ imaginations. But they’re a necessary fact of life, and with that in mind, Roy Morgan Research pays tribute to those electricity and gas providers currently setting the pace in customer satisfaction. (Meanwhile, the complete September Customer Satisfaction results can be seen at CustomerSatisfactionAwards.com)

Satisfying a higher proportion of customers in both the electricity and gas categories is Lumo Energy. With 72% of its electricity customers and 77% of its gas customers reporting that they’re satisfied with the company, Lumo has come from behind and toppled last month’s double-utilities Customer Satisfaction leader, Energy Australia.

Red Energy—winner of last year’s Annual Customer Satisfaction Awards for Electricity Provider and Gas Provider—came second, satisfying just under 72% of its electricity customers and 74% of its gas customers in September. Energy Australia (69%) and Kleenheat Gas (70%) took out third place for electricity and gas respectively.

Customer Satisfaction Awards: Top 6 Electricity and Gas Providers, September 2016

utilities-satisfaction-chart

Source: Roy Morgan Single Source (Australia), October 2015-September 2016, n=14,416


What about customer dissatisfaction?

While more than half of utilities customers report being satisfied with their provider, 24% of electricity customers and 26% of gas customers say they’re neither satisfied nor dissatisfied, while 8% and 10% respectively can’t say. These figures speak volumes about the ambivalence many people feel about utilities in general, but what of the 7% of electricity customers and 6% of gas customers who are outright dissatisfied?

True, dissatisfied customers are in the minority, but they are an important group for utilities providers to monitor: not only are they less likely to recommend their provider to others, but there is always the danger their dissatisfaction may prompt them to switch to another company.

Using Roy Morgan’s in-depth consumer profiling tool, Helix Personas, to identify which segments of the population are most likely to feel dissatisfied with their electricity and gas providers gives these companies the insights necessary to work on improving their standing with their less happy customers.

With a dissatisfaction rate of 14% (twice as likely as the average electricity customer) the Persona known as Humanitarians stands out. Generally well-educated and high-achieving, these well-paid professionals expect others to be as competent as them, and may be inclined to judge less-than-perfect service harshly.  Tellingly, they are also the Persona most likely to be dissatisfied with their gas supplier (11%)!

The house-proud, outer-suburban Castle & Kids (12%) is another group more dissatisfied than average with their electricity provider. Despite earning high incomes, these people are financially stretched (what with their mortgage and/or home improvements, the kids’ education, and so on), which makes them extremely budget conscious. Their dissatisfaction is likely to be price-related.

When it comes to dissatisfaction among gas customers, folks from the older, low-income Still Working Persona (10%) are more likely than most others to be dissatisfied with their gas supplier.  Despite being old enough to retire, these predominantly rural Aussies simply can’t afford to pack it all in yet—not surprisingly, some feel they’ve got a rough deal out of life. This could very easily translate into a sense of being ripped off by their utilities suppliers.

Norman Morris, Industry Communications Director, Roy Morgan Research, says:

“Lumo Energy has been among the five top-performing gas and electricity providers every month so far this year, but September marks the first time it’s satisfied a higher proportion of its customers than any other company. Lumo was acquired by power giant Snowy Hydro Ltd a couple of years ago: it will be interesting to see if it can replicate the success of fellow Snowy Hydro-owned Red Energy. Currently in second place for gas and electricity satisfaction, Red Energy was the winner for both categories in last year’s annual Roy Morgan Customer Satisfaction Awards.

Utilities suppliers are at something of a disadvantage when it comes to customer satisfaction. Unlike the retail, automotive or tourism categories, gas and electricity do not provide any obvious fun or satisfaction for their customers – they’re a necessity rather than a pleasure. To make their customers happy, they really have to pull out all the stops; to make their customers unhappy, all they have to do is raise their prices or attract negative media attention.

“As we have seen, certain kinds of people are more likely to express their dissatisfaction than others. But with an in-depth understanding of these unhappy customers, energy providers can then devise a strategy tailored to improve relations with them. For some, their dissatisfaction may be symptomatic of their personality type rather than a specific grievance: for example, Roy Morgan data shows that consumers who report being ‘very dissatisfied’ with their utilities providers are dramatically more likely to be ‘very dissatisfied’ with other services such as mobile phone service provider and home internet service provider.

“Only with the most detailed and holistic consumer data can utilities providers hope to meet the challenge of improving their customer satisfaction scores and avoid the ever-present threat of switching.”


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About Roy Morgan

Roy Morgan is the largest independent Australian research company, with offices throughout Australia, as well as in Indonesia, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan has over 70 years’ experience in collecting objective, independent information on consumers.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

Percentage Estimate

40%-60%

25% or 75%

10% or 90%

5% or 95%

5,000

±1.4

±1.2

±0.8

±0.6

7,500

±1.1

±1.0

±0.7

±0.5

10,000

±1.0

±0.9

±0.6

±0.4

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2