Unleashing The Value of Customer Loyalty for Utilities

“Retention and loyalty” seems a lot like “peanut butter and jelly,” in that they almost always appear together. Customer Success and CX consultants bombard the market with schemes to optimize customer “retention AND loyalty” as if they always come in pairs. So, for markets with regional monopolies and low competition like most of the US utility industry, these advisors have to find a different solution. And, that’s a shame because customer loyalty drives a lot of value for US utilities, and I don’t think we hear enough about those benefits OR the strategies to build it.

Loyal customers pay a lot of dividends to utilities making the right investments, and it shows up across the entire operation from customer engagement to all areas of the customer journey and leading to optimal financial performance. Consider these benefits.

Advocacy - loyal customers advocate for the brands they trust, and utilities benefit just like any other service provider. Loyal customers promote the utility and its programs across multiple channels, including the new digital “word of mouth,” social media. They tell stories about the great rebate they just used or a special rate program that lowered their bill, and snap pictures of lineworkers making repairs during outages that go viral and enhance the public reputation of their utilities. Loyal customers evangelize the best features of the utility to the public for free, but its the kind of marketing that delivers invaluable returns.

Program Engagement and Enrollment - loyal customers are far more likely to engage with utilities and participate in a wider variety of special programs. Loyal customers sign up for newsletters AND read utility emails more readily, resulting in more awareness of utility programs. Loyal customers take advantage of rebates AND register their thermostats for demand response programs. Loyal customers pay better attention to their bills AND enroll in payment assistance programs that utilities recommend if they get behind in their accounts. Loyal customers embrace new technology like smart meters AND register for programs that benefit energy efficiency, load management, and grid resilience because they trust their utility.

Smoother Operations - loyal customers stay informed through mobile apps and outage notifications, check their accounts and pay their bills online with customer portals, leverage more self-service features digitally, and give their utility the benefit of the doubt during outages that last longer than usual, which reduces strain on the customer service system overall and balances the stress of surge cycles in the contact center.

Beyond the Meter Success - loyal customers take advantage of more offers and programs from their utility, so purchase new and different products and services Beyond the Meter. Loyal customers trust the utility, so purchase more repair and protection plans. They prefer to buy bulbs or thermostats and replace appliances through their utility, which increases traffic to the utility marketplace and adds to its financial success. Loyal customers seek out advice from their utility about new appliances, electric vehicles, charging options, and energy management, opening up new categories for the utility to deliver BTM products and services.

Enriched Financial Performance - loyal customers have higher lifetime value and remain less price sensitive because they pay attention to utility education about the cost of commodity delivery. They participate in surveys for CSAT like JD Power, which rewards high scoring utilities with greater return on equity. Higher scores and lower price sensitivity reduces resistance to rate increases and surcharges, which helps utilities deliver consistent returns.

Nurturing a loyal customer base delivers genuine lasting value to utilities, so should be a core component to customer service and support programs. Loyal customers make all areas of customer operations easier to manage, provide big reputational advantages especially in new channels like social media, and deliver stronger financial performance directly to the bottom line. And, it’s not hard to measure loyalty or cultivate it for these advantages. To learn more about how to evaluate and enhance your customer loyalty strategy, give us a call.