Ever wonder why some companies emerge from crises faster, with more of their reputation intact, while others die a death of a thousand cuts? The answer can be found in the adage, “As you sow, so shall you reap.” You can find all kinds of validation of that simple premise. Recently, I was reminded of it while writing an article for California Water & Power, the quarterly magazine of publicly owned electric and water utilities in California. It turns out that publicly owned utilities (POUs) in the Golden State are held in higher regard by their customers compared to the way customers of investor-owned utilities (IOUs) view their providers of essential services. Why? More and better customer outreach, I’d say. I blog about customer outreach, customer satisfaction, stakeholder engagement and social license to operate from time to time. Maybe it’s me, but it seems those interrelated issues are becoming more important for utilities.
Customer Outreach Increases Trust
Last August, as the pandemic and wildfires ravaged the Golden State, RKS Research & Consulting conducted its 11th biennial survey of California’s municipal electric utility customer satisfaction and communications. “We were blown away by the survey results,” said David Reichman, the market research firm’s CEO, told me. “The survey was conducted under extremely challenging conditions, yet the results were some of the best we have seen since we first began surveying California POU customers in 2001.” It wasn’t just COVID-19 upending Californians’ world. In mid-August, wildfire smoke cut into renewable energy generation during a historic heatwave, forcing the California Independent System Operator to institute rolling blackouts for some portions of the state. Despite these conditions, Reichman said he was amazed customers expressed no flood of negative views about their electric POUs. Muni customers gave high marks to their utilities on a wide range of issues. Of particular note was the high scores POU customers gave their utilities on three critical dimensions of communications: effectiveness, credibility and message relevance (see below). In all three dimensions, muni customers said their POU outperformed the communications of investor-owned utilities.
“The survey results make it clear customer communications are critical, and communications by the state’s municipal electric providers are really doing a good job keeping customers informed about essential services,” Reichman said in an interview. You can read the full article here.
Communications Tip of the Month: Don’t take a “ready, fire, aim” approach to your communications. Your work will more often succeed if you conduct customer outreach to better understand what words work and how customers prefer to receive their information.
You Can’t Reap What You Do Not Sow
Why did California POUs perform better than their IOU cousins? I think they spent more time “sowing,” in the form of expanded customer outreach. Then when crises emerged, they were able to “reap” what they had sown: POU customers deemed communications from their utilities to be more trustworthy than IOU customers deemed communications from theirs. Through heightened customer outreach, California POUs got a more detailed understanding of what customers wanted to hear and how they wanted to hear it. As the new AT&T TV advertising campaign said, “It’s not complicated.” The POUs used that customer intelligence to craft better, more relevant communications, which were better received by customers. Then, in keeping with the adage, when the crises came — COVID-19, wildfires and public safety power shutoffs — and it was time to reap what they had sown, the state’s POUs ended up with a full storehouse of customer equity that they could draw upon (see below).
There’s not a lot of mystery about why the POUs scored so well in the RKS survey:
- In the early months of the pandemic, they focused communications around the pandemic. Trying to promote energy efficiency programs or electric vehicles would have fallen on deaf ears when the public had so many questions about whether their water or power would be shut off for non-payment.
- POUs established trust and customer confidence before crises hit. Effective communication often is less about making one earthshaking breakthrough than it is about making ongoing continuous improvements. Sound processes tend to produce good results.
- Long or complicated messages were broken down into shorter and simpler messages, which customers found easier to remember.
- They provided customers with information using channels customers preferred. If you have a highly diverse community, you need to communicate with customers using their language and with respect for their culture.
More Customer Outreach Needed on Bills and Prices
This is not to say the POUs got everything perfectly right, or that the IOUs were dead wrong in their communications. In fact, the survey identified an interesting messaging challenge facing a lot of utilities: prices. Last summer was a hot one, and a lot of people spent more time than usual in their homes. Both of those factors drove up use of electricity. While most of those surveyed understood their utility bills were rising due to increased usage, nearly one in three (28%) of POU customers surveyed said bills were rising because their POU increased the price of electricity. In fact, no POUs increased their electric prices during the pandemic. Several suspended planned price increases. This misconception suggests POUs have a messaging challenge ahead of them: informing or reminding customers their electric bill is the product of two factors: electric prices and customer use. To a large degree, customer use is driven by weather, which cannot be controlled. But customers can control their behavior around energy use. I have no doubt that the California POUs will rise to the occasion. Step 1: Conduct customer outreach. Step 2: Use that to revise your communications, both the message and the way those messages are delivered. Utility communicators, it may be time to get in the field and start sowing. And if you skimp on customer outreach, you should not be surprised when you have a poor harvest.
Illustration credits: iStock unless otherwise indicated