CAMBRIDGE, Mass.--(BUSINESS WIRE)--After 17 years of a deregulated electric market, Texas retail electric providers (REPs) have grown Brand Trust to an impressive score of 716 (on a 1,000-point scale). But Texas consumers should beware when selecting an electric provider, as many REPs have low customer trust levels. In fact, there is a huge 100-point difference between the most trusted and least trusted brands. These and other findings can be found in the 2016 Texas REP Trusted Brand Study from Cogent Reports at Market Strategies International.
“Our research shows that Brand Trust is the driving factor of customer loyalty and attraction, so being a most trusted brand directly translates into greater financial rewards,” said Chris Oberle, senior vice president at Market Strategies International. “Electric providers that we have identified as most trusted brands are considered companies that customers have confidence in to do the right thing on their behalf, which translates to higher levels of loyalty.”
The consumer switching rate is high for the Texas REP market, with almost half (44%) of customers saying they have used more than one REP at their current residence, and one in five have used three or more REPs at their current residence.
REPs with high Brand Trust have twice the customer loyalty than those with low brand trust. For instance, when offered a modest $1 savings per month, 18% of customers with low brand trust with their electric provider said they “would switch providers” while only 6% of those with high brand trust would. Another potential for lost revenue is the 29% preference for natural gas service among Texas REP customers.
“Since Texas consumers are comfortable with switching providers, it is clear that the most successful REPs are going to be those that foster trust and loyalty among their customers,” continued Oberle.
One way to increase REP customer loyalty is to provide value-add products and services. Consumers rate their REPs a low 6.73 (on a 0-to-10 scale) on “offering products and services that customers’ value.” The study allows REPs to size the market for over 40 offerings that REPs can implement to increase loyalty among customers.
The Cogent Brand Trust Index is calculated based on responses from 2,958 Texas electric consumers who rated their REPs on eight factors that impact both their “emotional attachment” and the “management performance” of each provider.
Following is a list of the Most Trusted Texas REP brands. Each has shown strong consumer loyalty and commitment. Among all retailers, StarTex Power stands out as the highest-ranked Most Trusted REP.
Most Trusted Texas REPs in alphabetic order: Ambit Energy, Amigo Energy, Bounce Energy, CPL Retail Energy, Green Mountain Energy, Reliant Energy, StarTex Power*
About the Texas Retail Electric Provider Brand Trust Study
Cogent Reports conducted surveys among 2,958 residential electric customers in deregulated service areas in Texas. The sample design uses US census data and strict quotas to ensure a demographically balanced sample of Texas deregulated market customers based on age, gender, income, race and ethnicity. Market Strategies will supply the exact wording of any survey questions upon request.
About Market Strategies International
Market Strategies International is one of the largest market research firms in the US and is a leading provider of research and consulting services to utility management. We blend primary research with data from our syndicated, benchmarking and self-funded studies as well as Big Data to help our clients grow their businesses and brands. Market Strategies’ research specialties include brand, communications, CX, product development and segmentation. Our syndicated products, known as Cogent Reports, are the energy sector’s industry-leading source and diagnostic tool designed to transform how clients can maximize revenue potential, and identify issues and topics that will shape their business models and the future direction of the industry.
Founded in 1989, Market Strategies is one of the largest market research firms in the world, with offices in the US, Canada and China and additional industry expertise in consumer & retail, financial services, healthcare, technology and telecommunications. Read Market Strategies’ blog at FreshMR, and follow us on Facebook, Twitter and LinkedIn.