Utilities, CSAT, and Rate Cases

We often talk about customer satisfaction (CSAT) and its importance in a wide variety of industries...but what if your industry has a captive audience?  If you're a utility provider, does CSAT really matter?

"It’s not a great time to be running a regulated utility," said Mark Spalinger, director of utilities intelligence at J.D. Power.  "A perfect storm of inflation, high interest rates, cuts in energy production and constantly growing compliance requirements have conspired to crimp profitability nationwide. Fortunately, there is a way to mitigate this volatility: customer satisfaction." 

J.D Power data has consistently shown that an investment in customer satisfaction will yield dividends in the form of higher rates and increased profitability. By grouping regulated electric utilities into quartiles based on customer satisfaction, that has continued to be the case. Higher levels of customer satisfaction one year prior to a rate case are associated with higher ROE.

If you struggle with connecting the dots between CSAT and return on equity, check out our recent report which dives into this topic further.