Declining Brand Trust and Higher Prices Drive Texas Customers to Shop for New Retail Electric Providers

LIVONIA, Mich., Oct. 19, 2023 (GLOBE NEWSWIRE) -- Between rising costs and an overall decline in brand trust, a remarkable 44% of Texas retail electric provider (REP) customers have indicated they plan to shop for a new REP in the next year. Pursuit of savings, negative customer experiences and moving to a new home are all contributing to customers’ desire to find a new provider. These and other findings are from the Cogent Syndicated Texas REP Trusted Brand™ study from Escalent, a top data analytics and advisory firm with extensive energy, utility and brand experience.

The study finds overall Texas REP Brand Trust has dropped a statistically significant 17 points from 2022 to 708 this year and is now at its lowest level in seven years. REPs remain near the bottom of various service providers, posting Brand Trust levels comparable to those of phone companies and cable TV companies. By contrast, companies such as banks, Amazon and streaming TV services post significantly higher Brand Trust scores. Additionally, REP ratings for competitive rates and billing/service satisfaction are down significantly from 2022 as customers reported significantly higher average bill amounts.

“Inflation and higher utility bills are driving customers to constantly be on the lookout for a lower-priced retailer,” said Suzanne Haggerty, director of syndicated research with the Energy team at Escalent. “To slow this churn, REPs have to offer ongoing value, not just quick-hit sign-up incentives.”

For example, customers of Cirro Energy, the only 2023 Most Trusted Brand among Texas REPs that also earned the designation in 2022, report significant annual increases in usage of budget/balanced billing programs, communication analyzing energy consumption, high-bill alerts, smart thermostats and online energy marketplaces.

“Value isn’t simply a question of a customer’s monthly bill amount,” Haggerty continued. “Promoting offerings and programs that continually help customers conserve electricity, improve efficiency and ultimately cut costs help boost value perceptions as well as overall trust scores. Even when savings are not substantial, the perception that a retailer is providing ways to help customers save is a value-add.”

By helping customers take advantage of programs that lower usage, enable them to manage consumption and improve their energy literacy, REPs will be able to develop a reputation as great service providers and leaders in innovation. Additionally, interest in REPs that provide renewable power options is significantly higher compared with last year, coming in just behind options that improve ease of doing business (e.g., online account management and bill pay).

However, even as customers report increased interest in options that improve ease of doing business, customers report REPs as less easy to do business with. This year sees a 6% decrease from last year in the top REP score for ease of doing business, moving from 8.63 in 2022 to 8.12 in 2023 on a 1-to-10-point agreement scale. Furthermore, only one REP, Stream Energy, scores above a rating of 8 for ease of doing business, compared with six providers last year.

Although overall REP Brand Trust scores have declined, six REPs are leading the Brand Trust Index this year. Escalent is pleased to name these six utilities as our 2023 Most Trusted Brands among Texas REPs.

“These REPs are positioned to retain their current customers and attract new customers from the 44% who plan to shop for a new provider in the coming year,” Haggerty added. “Since it is generally less expensive to keep a customer than it is to acquire a new one, focusing on building a strong brand among existing customers remains an important competitive strategy.”

About Texas REP Trusted Brand

Cogent Syndicated measures Customer Engagement and Brand Trust among customers of Texas retail electric providers by surveying 3,357 customers across providers based upon data-driven models. The study measures key performance indicators (KPIs) to provide management perspectives on how to improve REP brand positioning, sales and promotion, customer trust, effective messaging, product sales, customer experiences, service quality, customer acquisition and loyalty. Escalent’s Brand Trust Index comprises nine factors: community support, customer focus, communications effectiveness, environmental dedication, local reputation, reliable quality, competitive rates, enhanced offerings, and billing and customer service. The study collects a demographically representative sample across all Texas service territories open for retail electric competition. Escalent will supply the exact wording of any survey question upon request.

For more information on the full report, click here.