Brand trust is critical for strengthening the overall relationships that utilities have with their customers, according to the 2014 Utility Trusted Brand & Engagement study.
The report, released by Cogent Reports, a division of Market Strategies International, reveals there is a significant monetary value that can be linked directly to trust. Market Strategies International measures customer engagement with electric and natural gas utilities.
The study is based on a survey of 19,000 residential utility customers served by the 125 largest natural gas, electric, and combination utilities in the United States. It is the first study for the utility industry to provide a holistic view of the complex relationship consumers have with their utility providers by including measurements for brand trust along with operational satisfaction and product experience.
What’s more, Cogent Reports released a list of the 52 utilities categorized as most trusted brands in each of 12 regional and industry segments. Florida Power & Light is the nation’s most trusted electric utility and received the highest overall brand trust score (724 points out of a possible 1,000 points) of any utility. Oklahoma Natural Gas ranks first in trust among gas utilities nationally, while MidAmerican is the most trusted combination utility provider. Overall performance and tier structure vary by region and type of utility, with all companies named achieving a minimum threshold score of 650.
“By earning the trust of their customers, these companies are creating financial value in their brands,” Chris Oberle, a senior vice president for Market Strategies and the lead author of the report, said in a release. “While about four in 10 utilities in our survey are designated as Most Trusted Utility Brands, an even more select group of just 15 manages to achieve brand trust scores of at least 700 out of a possible score of 1,000.”
According to the report, greater incentives would be required to induce a change among customers of utilities with high trust.
“Based on these findings, we estimate the current goodwill value for scoring high on trust to be over $8 billion,” Oberle added. “This shows a significant financial benefit for the industry to focus on raising trust levels.”
Customers of utilities with strong brand trust tend to enroll in more programs and are more prone to making positive comments on social media and elsewhere about their provider.
“The bottom line is trust pays,” Oberle said. “By focusing on brand trust and getting it right, a utility can and will increase its franchise value.”
The sample design uses U.S. Census data and strict quotas to ensure a demographically balanced sample of each evaluated utility’s customers based on age, gender, income, race, and ethnicity. Utilities within the same region and of the same type (e.g., electric-only providers) are given equal weight to balance the influence of each utility’s customers on survey results.