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November 1, 2004
Hearing from the Silent Majority with Customer Research, Public Power Magazine, Nov-Dec 2004
| For More Information |
Tim Blodgett
Hometown Connections
303-526-4515
tblodgett@hometownconnections.com
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Value of Spending Funds on Customer and Employee Surveys
At first blush, municipal utility officials may question the value of spending funds on customer surveys. Will the surveys tell them anything they don’t know already? Why should investing in market research be a priority? With the aid of Satisfaction Development Systems (SDS), public power managers are learning that the quality of information gathered from casual conversations with friends or visitors to the office differs greatly from carefully crafted, statistically valid research.
To improve customer satisfaction, a growing number of municipal utility managers are first measuring it.
Selected by Hometown Connections to be the official customer and employee research firm for public power, SDS has worked with more than 150 utilities in 25 states, surveying thousands of residential, commercial and industrial utility customers, and utility employees over the past seven years. A subsidiary of the American Public Power Association, Hometown Connections negotiates lower purchase prices and service arrangements from SDS and other industry suppliers on behalf of all APPA members.
SDS’ services include a number of tools designed to capture the voice of the utility’s many customers. To gather data on how customers perceive the utility, SDS conducts Customer Satisfaction Audits. The telephone or mail survey results provide a measurement to assess customer loyalty, identify areas in need of improvement and determine levels of interest in new services or products from the utility. Yet, data on what customers think and will buy is only part of the equation for utility success. Employees who are satisfied and motivated provide quality customer service. That’s why SDS also conducts Employee Perception Surveys. These surveys invite employees to give honest, confidential and constructive input on their concerns, needs and interests. They provide insight into promoting and sustaining employee morale and loyalty.
Unlike many market research firms that contract out their call center operations to the lowest bidder, SDS uses its own trained and certified agents to conduct telephone surveys. This allows SDS to retain skilled, long-term employees who are well-versed in the nuances of the electric industry. These agents are well-trained and supervised using the highest research standards, yet all SDS services are very competitively priced.
“When I first approached the City Council in 2003 about surveying customers, it was a tough sell,” said James W. Smith, director, College Park Power in Georgia. “Neither the utility nor any other city department had ever conducted market research before. But as a new employee who had come to public power from another utility, I had lots of experience conducting market research. I understood the value of what customer surveys can do and why it’s important to measure and document what customers want.”
Smith added, “SDS helped us explain to the council the wisdom of hearing from what we call ‘the silent majority.’ These are the customers who don’t bother to contact us with an official complaint. The verbal few do not represent a statistically valid sample on which we should base decisions and strategies.”
College Park Power contracted with SDS to conduct a customer satisfaction survey consisting of 352 completed surveys, which provided a 95 percent confidence level in the survey results. SDS completed the eight-minute survey by randomly selecting residential power customers. The questions included, “Overall, how do you rate the service provided by College Park Power? —Excellent, Good, Fair, or Poor.” Other questions measured such areas as likelihood of staying with College Park Power if given a choice of suppliers, ratings of customer service and installation/repair employees, quality of communication, and interest in credit/debit card payments, drop box for payments, and billing information kiosks.
SDS provided a comprehensive summary report analyzing the survey information question by question. College Park Power’s Positive Index (combined Excellent and Good ratings) for overall customer satisfaction was 90 percent, and residential customers expressed strong support and loyalty. The survey showed that customers are primarily concerned about reliability and value. Customer service representatives received positive ratings, as did the installation and repair employees. The report from SDS concluded, “Because employee-customer relations are one of the most important factors affecting customer satisfaction, improvement in this area will positively influence the overall perception of the utility. Survey results also suggest the utility should communicate with customers more often and keep them further informed about what goes into the charges they pay.”
As a direct result of the SDS survey, College Park Power is now in the process of accepting credit and debit card payments. In addition, for customer convenience, the city extended the hours for requesting service turn-on, making payments, and having electric service reconnected on delinquent accounts. The drive-through customer service window at City Hall is now open an additional 15 hours during the week, with extended hours from 5 pm to 8 pm weekdays. Customers are no longer required to go to the police station to pay their past-due accounts and arrange reconnection.
“We put the comment policy and SDS Alert Program to very good use,” Smith said. Comments made by customers during the telephone surveys are forwarded verbatim to the utility. When SDS agents receive a service complaint or identify a sales need, with customer permission, the agent communicates the concern to the utility. Smith coded the comments by other city departments and distributed them to the staff.
“Todd Morris, SDS’s marketing director, made a presentation to our City Council and did a great job of explaining the survey results and what they mean. And that’s important because our members come from a variety of backgrounds, with differing knowledge and experience with utility operations.”
Smith added, “SDS makes the project very easy. They provided a questionnaire template that required very little customizing for our utility. And we did not receive a single complaint about the phone calls.”
College Park Power views the 2003 residential customer survey as an initial “benchmark” study. SDS will conduct the same survey in 2004, to further quantify the original findings. Then, the utility plans to conduct surveys every two years. College Park Power is also having SDS conduct a mail survey with commercial customers. SDS has determined that for commercial customers, a written survey is a more effective method of getting utility leaders to respond.
In addition to research services from SDS, College Park Power purchases meter reading equipment, green pricing and online meter data services for key accounts through suppliers affiliated with MEAG Power and Hometown Connections. [MEAG Power is College Park Power’s joint action agency and the official Hometown Connections sales representative in the state of Georgia.] “We very much want to work with suppliers affiliated with Hometown Connections and MEAG Power,” Smith said. “We value the service, support and pricing. And we want to work with these suppliers because they know what small municipal electric utilities like ours are all about. There’s no break-in period. We don’t have to explain to these companies who we are, what we do, and how the approvals process works.”
Crawfordsville, Ind., Electric Light & Power (CELP) serves as a sales affiliate of Hometown Connections, promoting the Hometown Connections product suite to all public power utilities in Indiana. CELP is also a frequent purchaser of market research services from SDS, conducting quarterly customer surveys for the fourth year in a row. CELP surveys quarterly so a single power outage or other one-time event does not throw off the survey results. Every other year, on a rotating basis, the Indiana Municipal Power Agency arranges for SDS to survey half of its member cities, so in 2004, CELP is conducting its own surveys. Then in 2005, CELP will take part in the IMPA survey.
Because the IMPA project surveys customers of neighboring investor-owned utilities and rural electric cooperatives, the group purchase provides region-wide comparison of customer satisfaction and public power’s strength in the local marketplace. These projects also offer individual utilities greater insights into the strategies, priorities and operations of their public power colleagues.
CELP conducts both customer and employee surveys with SDS. It has also conducted focus groups. According to Manager Roy Kaser, the research has given CELP the confidence to launch broadband high-speed Internet and video services. Kaser added, “The three focus group discussions we held with residential customers and the one with commercial customers gave us great feedback. They enabled us to drill down deep and ask more pointed questions than the telephone survey allowed.”
Kaser also found the employee survey to be very beneficial. “It gave us good insight into what’s important to our employees: their compensation, being communicated with, being challenged by their work, being recognized for their achievements and feeling a part of the decision-making process.”
Kaser shares with Jim Smith of College Park Power the concern about the silent majority of customers. “As a utility manager, I worry about being insulated from customers. It’s the unhappy customer who doesn’t call us that’s worrisome. You can bet that customer is sharing his or her frustration with friends and neighbors. So, the surveys allow us to uncover problems we’re not going to hear about otherwise. It’s important not to be complacent.”
Columbia, Mo., Water & Light (CWL) has conducted four surveys with SDS, with the goal of completing one survey each fiscal year. Last year, the city administration conducted its own survey, so CWL was asked to wait a year before surveying customers again. According to Tina Worley, utility services manager, “We like to take the pulse of the community to be certain that we are providing the level of service we think we are.”
One primary objective of the CWL research was to determine customers’ interest in the purchase of renewable energy. The response was very favorable. The utility also wanted to measure the participation level of various programs and whether or not the utility is advertising effectively. The surveys found the participation rate of some programs was less than expected and that the advertising needs a boost.
Worley said, “Todd Morris and the rest of the SDS team are very efficient. They provide good suggestions for the questionnaire and insightful survey statistics. They are always very professional and more than willing to offer assistance. Because SDS is affiliated with Hometown Connections, the due diligence of the bid process was taken care of for us, making our ability to access SDS much easier.”
Easton Utilities is one of five municipal utilities in Maryland. It provides electric, natural gas, water and wastewater, cable television, Internet (dial-up, high-speed cable modem, and wireless) and cable television advertising sales. SDS has assisted Easton Utilities in an annual customer satisfaction survey, an employee perception survey, and employee focus groups.
According to Geoff Oxnam, director of corporate communications, “the customer satisfaction survey is a key metric of our performance as a company. Each year, one of our six corporate goals is tied directly to our score. We also use the results to track our performance on a wide-range of issues and to guide our annual work plans.”
Easton Utilities measures employee perceptions on a broad range of issues. Employees are asked about overall satisfaction, safety, communication, etc. On alternating years, the utility conducts a series of focus groups instead of a written survey. Oxnam said, “This allows us a more flexible tool to tease out key information. We have found that by using an independent, third-party moderator [SDS], we enhance the quality of the responses. All questionnaires are kept confidential and individual questionnaires cannot be linked to a specific employee.”
The telephone surveys track information about electric, water/wastewater and natural gas services. Questions cover topics from the perception of value and quality of utility service to the quality of customer service. On alternating years, the utility tracks customer perceptions about the quality of its Internet and cable television services (Internet on even years and cable on odd years). The utility then evaluates customer perceptions in a range of categories and creates an overall Positive Index score (the combination of the “Excellent” and “Good” responses to the question of overall performance) for each utility. Positive Index scores for each department are then averaged to create an overall Positive Index score for the utility.
“The end result is an excellent picture of how both our customers and our employees perceive Easton Utilities and the services we deliver,” Oxnam said. “We are very careful to emphasize to our staff that these surveys measure perception and not performance. Even when we deliver top-notch service, a host of issues that may have nothing to do with the question at hand impact perceptions of that service. Open, honest and regular dialogue with customers is essential. While we think about utility issues all day, every day, many customers only think about them when the bill arrives or when something goes wrong. That’s where these surveys are extremely valuable. They let us see ourselves through our customers’ and employees’ eyes.”
Oxnam added, “We approached SDS largely because of its affiliation with Hometown Connections. They worked closely with us to explain their approach to this process and to help us understand how to interpret and use the information in the survey. They are very knowledgeable and helpful not only in conducting the surveys, but also in analyzing the results.”
“SDS never seems to have trouble collecting meaningful responses from the required number of customers to achieve the confidence interval. Each telephone survey allows the customer to offer comments and suggestions.”
See the SDS Web site for more information.
• Satisfaction Development Systems
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