As energy costs continue to fluctuate, energy providers must be proactive to inform and educate customers. However, the right approach to communicating this message can go a long way to improve customer satisfaction and reduce energy burdens.

“It's a combination of awareness and education,” says Sarah Sharp, consultant at Questline Digital with nearly three decades of experience leading the customer engagement efforts at Entergy. “Awareness is essential so that customers are aware when they see a rate change on their bill, as well as education so they understand why that rate change is occurring.”

According to the U.S. Bureau of Labor Statistics, consumers paid 14.3% more for electricity in 2022 compared to 2021. And this trend isn’t going away any time soon. The U.S. Energy Information Administration (EIA) recently released its Short-Term Energy Outlook that finds residential electricity prices will slightly increase to 15.78 cents per kWh in the next two years. Utilities need the right strategy to communicate these foreseeable rate changes.   

Customers appreciate transparency

Brian Lindamood, Vice President of Marketing and Content Strategy at Questline Digital, explained in a recent American Public Power Association (APPA) webinar how it’s easier to communicate difficult information, like rate increases, when utilities have built long-term digital customer relationships. If customers are already engaged with their utility’s digital communications, they are more likely to pay attention.

“When customers are engaged in this way, it’s easier to communicate with them about energy issues, connect them with programs and support, and help them take control of their energy usage,” Lindamood said. “When we look at an issue like rising energy costs, we think this approach of connecting with customers is extremely important.”

Beyond informing customers about a rate change, utilities should be transparent on why costs are rising. While customers are never happy about increased costs, they respect when their energy provider is transparent with them. According to Sharp, utilities should use simple language to make it easy for customers to understand the “why” behind changing costs.  

“I think the most important thing is to not make it too complicated,” Sharp said. “Rate increases are a very complex process. Help customers understand without using industry jargon. This goes a long way to reduce customer frustration.”

When possible, utilities should also take advantage of personalization, Sharp notes. Whether including a customer’s name or mentioning the industry or business type, personalization speaks directly to the message recipient and improves engagement.

Getting the message out there

When it comes to communication platforms, utilities should use as many avenues as possible to reach customers. This might include email campaigns, direct mail, newsletters, website landing pages, social media and even webinars or in-person events.

To communicate two rate increases impacting customers last year, Duquesne Light Company decided to be proactive with messaging. Since they knew customers would be comparing their bills to the previous year’s bills, the utility created a resource hub on its website, along with a multichannel campaign to explain the changing prices.

The campaign included website banners, social media posts and newsletter features. “The honesty and transparency piece played a major role in this campaign,” said Morgan Kriley, Customer Experience Associate at Duquesne Light Company, in a Questline Digital webinar.

Sharp noted how Entergy leveraged neighborhood association meetings in their service territory to communicate rate changes. Customer service managers, as well as key account managers, attended the events to provide transparent information and answer customers’ questions. “These meetings were great opportunities to meet with customers face to face,” Sharp said. 

Reducing energy burdens

Many customers nowadays face a significant energy burden: the percentage of gross household income spent on energy costs. In fact, 20 million households (one in six homes) are currently behind on their energy bills by an average of $788.

Low-income customers face disproportionally higher energy burdens – three times higher on average – than medium or high-income customers. In fact, the American Council for an Energy-Efficient Economy finds that the median energy burden is 43% higher for Black households, 45% higher for Native American households and 20% higher for Hispanic households. These communities are more likely to experience systemic inequalities, barriers and limited access to public and private resources.

To help ease the energy burden for these customers, utilities should provide resources like budget billing and financial assistance programs. Many customers are unaware these programs even exist. Sharp emphasized the importance of showing empathy.

“Customers are already concerned about higher energy costs, so they are approaching any communication in a more negative way,” Sharp said. “It’s critical that utilities be a resource of transparent information and guidance when it comes to energy efficiency and financial assistance programs. Showing customers empathy and understanding is key.”

Questline Digital helped produce a series of webinars for National Grid to educate customers about their financial assistance programs in the wake of rising energy costs. The webinars also included live translations in Spanish and Portuguese, as well as an American Sign Language interpreter.

“The webinar format lends itself to education because of the interactivity,” Lindamood said. “You can answer customer questions live during the event, and you can also reach a lot of customers at the same time. For the four webinars in this series, almost 9,800 customers registered.”

Energy efficiency education

With energy costs increasing, it only makes sense for utilities to share energy efficiency advice to help customers take control of their usage. Many customers benefit from energy efficiency improvements, especially those in disadvantaged communities.

Duquesne Light Company found through research that half of its customers actively monitor their electric usage. That’s why the energy utility makes educational content about energy efficiency a priority, including in newsletters, targeted emails and social media posts.

“They’re closely monitoring their thermostat and using lights and electronics very cautiously,” Kriley said. “Customers really want to know how to best use their energy and when.”

Lindamood cautions energy utilities to not rely solely on energy efficiency advice. “There is some risk of that coming across as blaming the victim,” Lindamood said. “It’s not the customer’s fault that energy costs are rising. Their bills may be going up, even if they use the same amount or less energy than before.”

Information meets education

While customers will never be happy about rising energy costs, they do appreciate transparency, empathy and education from their energy provider. With the right message and communication platform, utilities can reach as many customers as possible. In addition to announcing rate changes, education about energy efficiency and financial assistance programs is vital to help reduce energy burdens.