C&I customers happy with their existing electricity providers
The survey indicates that U.S. customers are satisfied with their existing provider and few intend to change their provider at the end of their contract
Frost & Sullivan conducted a customer survey to determine customer perception and purchase criteria for electricity and energy service management among commercial & industrial (C&I) companies. The survey indicates that U.S. customers are satisfied with their existing provider and few intend to change their provider at the end of their contract.
New analysis from Frost & Sullivan, surveyed 250 medium and large C&I companies across five verticals: manufacturing, data centers, hospitals, small franchises and education.
Highlights of the survey include:
· Among customers with five-year contracts, financial viability and line of credit were more important purchase criteria than power reliability.
· On average, electricity accounts for 9 to 11 percent of yearly operating costs, and up to 20 percent for select customers.
· About 40 percent of C&I customers expect their electricity consumption to increase in the next 24 months.
· About 80 percent of C&I customers are concerned about the future costs of energy.
“Nevertheless, the majority of customers do not plan to switch providers to lower energy costs, as they perceive little product differentiation among the utilities,” said Frost & Sullivan Energy & Environmental Principal Consultant Farah Saeed. “Therefore, vendors that focus on product development and enhanced offerings, particularly in the area of energy management, will win new customers.”
Energy providers can offer customer value and differentiation through services such as supply management, energy efficiency management, facility optimization and demand response.
However, most customers conduct these functions in-house and do not seek to outsource them to third-party vendors.
Nearly 70 percent of those who did outsource energy management services preferred utilities as the primary vendors. They may be persuaded to collaborate with a third-party energy management solution provider if it can clearly demonstrate operational cost savings.
“Currently, customers do not comprehend the difference between distribution utility and competitive electricity retailer,” noted Saeed. “Therefore, appropriate marketing campaigns that promote the benefits of deregulations will go a long way in increasing participants’ market shares and brand awareness.”