Lower-Income Customers are Feeling the Economic Pinch from Utilities

Household economies are being hit hard by inflation. From the price of eggs to the cost of a housing, people are feeling the effects of elevated costs, and none more so than lower-income* customers when it comes to their utility bills.

In 2022, we saw a pronounced declining trend on customer satisfaction with Price among lower-income customers, a segment that is already the lowest scoring on overall CSI. This trend is important for utilities to address as the lower-income segment is of significant size (22% of customers) and carries a heavier bill burden, so the problem will not resolve unless utilities step in to help these customers make ends meet.

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The data shows that lower-income customers are having a difficult time managing their energy consumption and bill amounts. In fact, energy prices are cited as a main household concern for 20% of lower-income households. These bill management issues are in turn causing an increase in utility costs. For instance, lower-income customers are calling their utility more than other income segments.

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What Can Utilities Do To Help?

Lower-income customers are more satisfied when they are aware of utility energy consumption management programs or on programs targeting the lower-income segment, like budget/fixed billing. Publicizing bill assistance programs like budget billing, choose-your-own payment due dates, and billing alerts also have a significant positive impact on satisfaction.

Overall, customers in this segment don’t think their utility is doing enough to help them and that is resulting in lower YTD 2023 Customer Satisfaction Index scoring (13 points below average) and Brand Appeal Index scoring (6 points below average). This is likely due to lower-income customers reporting that they receive fewer utility communications and have lower awareness of utility programs like energy consumption management offerings. Good to note that, while utilities are using more digital communications, this segment prefers direct mail.

Being a proactive energy advisor can help customers with bill management issues and will lead to increased satisfaction and fewer costly service interactions, bill collections, and turn-offs.

Learn more about the needs of this segment and how to position your utility to excel at serving lower-income customers through the J.D. Power Electric Utility Residential Customer Satisfaction Study.

*Lower-income is defined at <$30K annual household income