The vast majority of US utilities are failing to optimize franchise and stakeholder value due to lagging trust levels among consumers. Only 17 out of the 125 utilities studied by Cogent Reports, a division of Market Strategies International, have achieved an Optimal Brand Trust level, that is, the point at which brand trust begins to return dividends to utilities in terms of franchise value.
The study is the first of its kind to establish a correlation between brand trust and the bottom line. Cogent Reports determined that a brand trust score of 745 out of 1,000, based upon a composite of six strategic attributes, is the point at which franchise value begins to build. At present, the average brand trust score of utilities in the study is just 685.
“Sixty points is a significant trust deficit,” says Chris Oberle, senior vice president at Market Strategies and lead author of the report. “Most utilities have a very steep hill to climb.”
Seventeen utilities achieved a score of 745 among at least 50% of its customers, eight of which met or exceeded the 745 trust threshold for the company overall.
The 2015 Residential Utility Trusted Brand & Customer Engagement study further quantified the link between brand trust and customer adoption of utility cost-cutting initiatives, customer acceptance of rate increases, and avoidance of new regulatory intervention. It also found that building trust increases customer engagement and loyalty, making it possible for traditional utilities to effectively compete with emerging technologies.
The findings are based upon a survey of over 25,000 residential utility customers served by the 125 largest electric, natural gas and combination utilities in the United States.
For operational satisfaction, electric and natural gas utilities’ customers scored their providers a healthy 754 on a 1,000-point scale. And yet, utility bond ratings and shareholder returns have been slipping for decades. In contrast, brand trust has yet to be optimized, and there is no ceiling when it comes to delivering returns once the 745 threshold is met.
“Utilities can’t just operationalize themselves out of a downward spiral,” continues Oberle. “What they can do is build their brand, build goodwill in the community and offer products customers want.”
On a positive note, brand trust edged up 29 points over 2014, the first year Cogent Reports began its holistic investigation of customer engagement, brand trust, operational satisfaction and product experience.
The study shows how top performers have built trust through their communication strategies and community outreach efforts. It also helps utilities plan for coming demographic shifts by organizing consumer responses by age.
“The utilities that want to thrive in the future must position themselves as trusted advisers to their customers,” says Oberle. “That goes well beyond just keeping the lights on.”
Utility name |
Percentage of customers ≥745 |
| TECO Peoples Gas | 60.6% |
| Southwest Gas | 60.4% |
| Piedmont Natural Gas | 59.0% |
| CPS Energy | 58.5% |
| Salt River Project | 57.2% |
| PPL Electric Utilities | 57.1% |
| Columbia Gas - South | 55.6% |
| SMUD | 55.4% |
| Alabama Power | 54.9% |
| Idaho Power | 54.9% |
| OG&E | 53.9% |
| Columbia Gas of Ohio | 53.1% |
| NW Natural | 52.3% |
| SoCalGas | 52.0% |
| Virginia Natural Gas | 50.5% |
| Florida Power & Light | 50.4% |
| Texas Gas Service | 50.1% |
